Unit 4 Topic 1:
Macroeconomic Objectives and Theory
Useful learning resources for this topic
Develop your understanding of fiscal policy, discretionary spending and automatic stabilisers.
Reserve Bank of Australia.
Videos, explainers and interactives to develop your understanding of inflation.
Josh Verlin is a Victoria based teacher who has produced a great video series covering the topics in this unit.
Gross Domestic Product
(Interactive Practice)
Interactive practice activities developed and owned by Marginal Revolution University. Published here for educational purposes.
Unemployment
(Interactive Practice)
Interactive practice activities developed and owned by Marginal Revolution University. Published here for educational purposes.
Inflation and Money
(Interactive Practice)
Interactive practice activities developed and owned by Marginal Revolution University. Published here for educational purposes.
Subject matter
Topic 1: Macroeconomic objectives and theory
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In Topic 1, students study the primary macroeconomic objectives of the Australian Government and economic theory. They connect this knowledge to a variety of economic concepts, principles and models.
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Comprehend and describe key concepts using economic terminology, including basis point and percentage point changes; consumer price index; deflation; labour force underutilisation; average propensities to consume and save; non-accelerating inflation rate of unemployment; participation rate; percentage change; stagflation; structural deficit.
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Distinguish nominal and real gross domestic product, wages and interest rates, and use calculations to identify change and scale.
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Comprehend and explain
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cyclical and structural factors affecting movements and shifts of short- and long-run aggregate demand and supply
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the factors affecting the production possibility curve
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the concept of the multiplier effect and calculate the value of the simple Keynesian multiplier, in terms of the marginal propensity to consume and save
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the four phases of the economic cycle, in the context of macroeconomic objectives
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the macroeconomic objectives of sustainable economic growth: full employment; price stability; external stability; sustainable development; and improved living standards
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how interest rates and federal budget decisions are policy tools that influence economic growth.
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Comprehend the circular flow of income model and the components of aggregate demand, focusing on economic policy decisions.
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Comprehend, explain and apply the aggregate demand/aggregate supply model to determine the overall price level and equilibrium level of real output in an economy.
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Comprehend and explain causes, effects, benefits and costs of the following to different groups and economic agents
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sustainable economic growth
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unemployment, including cyclical, structural, frictional, seasonal, natural, hidden, long-term and underemployment
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inflation, including headline, underlying, demand-pull, cost-push, imported and inflation expectations.
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Comprehend and explain the role in fiscal policy of automatic stabilisers and the role of discretionary spending in influencing aggregate demand and stabilising the economic cycle, and apply using diagrams.
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Reproduced from Queensland Curriculum and Assessment Authority, Economics 2025 v1.2 General senior syllabus October 2024
Internal Assessment 3
Extended Response to Stimulus: Exam Specifications
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Assessment objectives
Specifications
The teacher provides an examination that:
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Comprehend features and economic concepts, principles and models of macroeconomic objectives, theories, economic indicators and budget stances.
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Analyse an economic issue that involves economic indicators and budget stances .
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Evaluate an economic outcome relevant to economic indicators and budget stances.
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Create a response that communicates economic meaning to suit the intended purpose in an analytical essay.
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relates to Unit 4 Topic 1 and Unit 4 Topic 2
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is focused on a contemporary economic issue that is of national, state and/or regional significance to Australia
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requires an analytical essay in response to an unseen question with seen and unseen stimulus
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allows students to choose two economic criteria for their evaluation
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must elicit a variety of possible responses.
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Stimulus specifications
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The teacher provides seen and unseen stimulus that:
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enables a selection of current, accurate and relevant data and information from a variety of sources, e.g. government and other institutional websites, published reports, media articles and expert commentaries
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is a minimum of nine sources that include data and information in visual and written forms that fit on both sides of four A4-size pages or equivalent
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facilitates both the analysis and evaluation components of the task
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allows for unique responses.
The teacher provides unseen stimulus that:
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fits on both sides of one A4 page or equivalent
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is succinct enough for students to engage with during planning time
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includes information that is critical to the item, so that students cannot write pre -prepared
responses or predict the focus of the unseen question.
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Reproduced from Queensland Curriculum and Assessment Authority, Economics 2025 v1.2 General senior syllabus October 2024