VCE Economics is the study of how resources are allocated to meet the needs and wants of society. It attempts to explain how and why individuals behave the way they do, and the consequences of their decision-making.
Studying Economics as a social science enables students to gain valuable insight into the economic problems they may face on an individual basis and collectively as a society to meet the needs and wants of citizens. It may therefore assist them in making more informed and responsible decisions.
In this unit, students explore their role in the economy, how they interact with businesses, and the role of the government in the economy. Students are introduced to and explore fundamental economic concepts. They examine basic economic models where consumers and businesses engage in mutually beneficial transactions and investigate the motivations behind both consumer and business behaviour. They examine how individuals might respond to incentives. Students are encouraged to investigate contemporary examples and case studies to enhance their understanding of the introductory economics concepts.
Students use demand and supply models to explain changes in prices and quantities traded. Through close examination of one or more markets, they gain insight into the factors that may affect the way resources are allocated in an economy and how market power can affect efficiency and living standards. Students consider the insights of behavioural economics and how those insights contrast with the traditional model of consumer behaviour.
A core principle of economics is maximising the living standards of society. This is done through economic decisions that optimise the use of resources to produce goods and services that satisfy human needs and wants. Economic activity is therefore a key consideration for economics.
Students consider the link between economic activity and economic growth and investigate the importance of economic growth in raising living standards. They evaluate the benefits and costs of continued economic growth and consider the extent to which our current measurements of living standards are adequate.
In this unit, students investigate the role of the market in allocating resources and examine the factors that affect the price and quantity traded for a range of goods and services. Students develop an understanding of the key measures of efficiency and how market systems might result in efficient outcomes.
Students consider contemporary issues to explain the need for government intervention in markets. Students develop an understanding of the macroeconomy. They investigate the factors that affect the level of aggregate demand and aggregate supply in the economy. Students investigate the importance of international economic relationships and the effect of these on Australian living standards.
This unit focuses on the role of aggregate demand policies in stabilising the business cycle to achieve the domestic macroeconomic goals. Students develop an understanding of how the Australian Government can alter the composition of budgetary outlays and receipts to directly and indirectly affect the level of aggregate demand, the achievement of domestic macroeconomic goals and living standards.
Students also examine the role of the Reserve Bank of Australia (RBA) with a focus on its responsibility to conduct monetary policy. Students consider how the Australian Government utilises selected aggregate supply policies to pursue the achievement of the domestic macroeconomic goals and living standards over the long term.
