Economics Stage 6 Syllabus (NSW) – Key Points Review

These flashcards cover the foundational aims, structure, major topics and key concepts of the NSW Economics Stage 6 syllabus, preparing students for both Preliminary and HSC course requirements.

List the six key economic issues highlighted in the syllabus’ ‘problems and issues’ approach.

Economic growth & quality of life, unemployment, inflation, external stability, distribution of income, environmental sustainability.

Define ‘opportunity cost’.

The value of the next best alternative forgone when a choice is made.

What diagram is used to illustrate opportunity cost and economic growth potential?

The Production Possibility Frontier (PPF).

In the circular flow of income model, which sector represents foreign trade?

The overseas sector (international trade and financial flows).

What is ‘consumer sovereignty’?

The idea that consumer preferences ultimately determine what goods and services are produced.

Name three factors that influence individual consumer choice.

Income, price of the good, prices of substitutes or complements, tastes/preferences, advertising.

State two goals commonly pursued by firms.

Maximising profits, maximising growth, increasing market share, meeting shareholder expectations, satisficing.

Define ‘internal economies of scale’.

Cost advantages that a firm gains due to its own expansion, leading to lower average costs.

Give two reasons governments may intervene in markets.

To correct market failure (e.g., externalities, public goods), achieve equity, control prices (ceilings/floors), or reduce market power.

Write the formula for the price elasticity of demand using the total-outlay method.

Elasticity is inferred by observing whether total revenue rises, falls, or stays constant when price changes (no numeric formula required by syllabus).

List the four principal market structures studied.

Pure competition, monopolistic competition, oligopoly, monopoly.

Why is the demand for labour described as ‘derived’?

Because it depends on the demand for the goods and services labour helps produce.

Give two factors affecting the SUPPLY of labour.

Remuneration levels, working conditions, skills/education (human capital), mobility, participation rate.

Define ‘participation rate’.

The proportion of the working-age population that is in the labour force (employed or actively seeking work).

Identify one current labour-market trend listed in the syllabus.

Examples: rising part-time work, casualisation, outsourcing, use of contractors and sub-contractors.

Distinguish between primary and secondary financial markets.

Primary markets issue new financial assets; secondary markets trade existing assets.

Name TWO regulators of Australia’s financial system besides the RBA.

Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC).

What is the ‘cash rate’?

The interest rate on overnight funds in the interbank market, set by the RBA as the key monetary policy instrument.

Give one limitation of an unregulated free market highlighted in the syllabus.

Provision of public goods, income inequality, externalities (environmental damage), monopoly power, business cycle fluctuations.

Differentiate between progressive and regressive taxes.

Progressive taxes take a higher proportion of income as income rises; regressive taxes take a smaller proportion as income rises.

What are the three possible Federal Budget outcomes?

Surplus, balanced, deficit.

List three drivers of globalisation named in the syllabus.

Trade in goods/services, financial flows, transnational corporations (investment), technology/communications, transport, international labour movement.

State TWO major international economic organisations students must study.

World Trade Organization (WTO), International Monetary Fund (IMF), World Bank, United Nations, OECD (any two).

What are the main METHODS of protection against imports?

Tariffs, subsidies, quotas, local content rules, export incentives.

Define ‘Gross World Product’.

The total value of goods and services produced worldwide in a given period.

Name the two broad components of Australia’s Balance of Payments.

Current Account; Capital and Financial Account.

Explain the Trade Weighted Index (TWI).

An index measuring the value of the Australian dollar against a basket of currencies of our major trading partners.

What is meant by ‘terms of trade’?

The ratio of export prices to import prices; it indicates the purchasing power of exports in terms of imports.

HSC Topic 3 examines economic issues such as unemployment. Give two TYPES of unemployment defined in the syllabus.

Cyclical, structural, frictional, seasonal, underemployment, hidden, long-term (any two).

Provide the formula for the simple Keynesian multiplier (k).

k = 1 / (1 – MPC) where MPC is the marginal propensity to consume.

What graphical tool measures income distribution inequality?

The Lorenz curve (with Gini coefficient as its numerical measure).

List two primary causes of demand-pull inflation.

Excess aggregate demand, strong consumer spending, rapid private investment, expansive fiscal or monetary policy.

Define ‘ecologically sustainable development’.

Development that meets present needs without compromising the ability of future generations to meet their own needs.

HSC Topic 4 analyses economic policy. What are the THREE main macroeconomic policy tools in Australia?

Fiscal policy, monetary policy, (and exchange-rate policy is implied but the syllabus emphasises fiscal and monetary; microeconomic reform is the third broad class often listed separately as microeconomic policy).

Explain the stabilisation role of fiscal policy.

Using government spending and taxation to influence aggregate demand, smoothing business cycle fluctuations.

Give two methods of financing a budget deficit.

Borrowing domestically, borrowing overseas, selling assets, drawing on savings, creating money (though RBA financing is uncommon).

State one argument FOR decentralised wage determination.

It can increase labour market flexibility, link wages to productivity, and improve competitiveness.

Identify TWO limitations that can reduce the effectiveness of economic policies.

Time lags, global influences, political constraints.

What is the opportunity cost in government decision-making?

The benefits foregone from the next best alternative policy or spending choice not undertaken.

Define ‘microeconomic policy’.

Government actions aimed at improving efficiency and productivity in individual markets and industries, often by shifting aggregate supply.

Name one market-based policy tool for environmental management.

Carbon pricing/emissions trading schemes, pollution taxes, tradable permits.

What is NAIRU an acronym for, and what does it represent?

Non-Accelerating Inflation Rate of Unemployment; the unemployment rate at which inflation is stable.

Which competency involves ‘collecting, analysing and organising information’ and is embedded in Economics Stage 6?

Key Competency of information collection, analysis and organisation (one of several generic competencies).

For what reason does the Board of Studies allow schools to reproduce the syllabus?

For bona fide study or classroom purposes, provided copyright acknowledgement is included.

What requirement must students meet before commencing the HSC Economics course?

Successful completion of the Preliminary Economics course.

Which document outlines internal assessment components and HSC exam specifications for Economics Stage 6?

‘Assessment and Reporting in Economics Stage 6’.