Year 10 Economics

Central theme

·       Understand the economic logic underpinning human evolution and social development

·       Understand that economics is a subject that grows in response to the changing challenges of human society

 

Invisible hand

  • Understand and able to explain what invisible hand means and how it works

  • Able to identify real-life examples of invisible hand working and failing

  • Understand conditions for the invisible hand to function properly

  • Understand the three fundamental questions of economics

 

Laissez faire

  • Know what laissez faire economy means

  • Able to distinguish laissez faire economy from modified market economy and central-planning economy

 

Market failure

  • Understand and able to explain what market failure means

  • Able to identify market failure situations in real life and explain why they are market failures (inefficiency and/or inequity)

  • Understand the role of government in the context of market failure

 

Business cycle

  • Know the stages of a typical business cycle

  • Able to identify a stage of business cycle based on GDP graph (particularly depression and recession)

  • Understand why The Great Depression and The GFC are market failures

 

Circular flow of income

  • Able to draw the 2-sector and 3-sector models

  • Know factors of production (land, labour, capital and enterprise) and their compensation (rent, wage, interest rate, profit)

  • Understand the connections among sectors (households, firms, banks, government, foreign) based on the 5-sector model

  • Able to identify injections (investment, government spending, export) and leakages (saving, taxation, import) in the model

  • Understand Keynesian explanation of recession and depression (especially the high unemployment) based on the circular flow of income model (insufficient total spending caused by leakages greater than injections)

  • Able to analyse the positive and negative impact of saving, and evaluate whether saving is good for an economy (paradox of thrift)

  • Able to analyse the impact of economic event/change (e.g., unemployment) based on the model

 

Role of government (government policies)

  • Understand what monetary policy (adjustment of interest rate) and fiscal policy (adjustment of tax and government spending) mean

  • Able to explain how government can help economic recovery by increasing budget spending

  • Able to determine budget position based on data (balance, surplus, deficit)

  • Know the main sources of budget revenue and main items of government spending for Australia

  • Understand and able to explain multiplier effect