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Unit 2 Topic 2: Inequality On this page: Lorenz Curve and Gini Coefficient :: interactive model Subject matter for Unit 2 Topic 2: Inequality Lorenz Curve and Gini Coefficient :: interactive model How to use the interactive model and calculator: press the "try a country" button at the bottom to view the Lorenz curve and Gini coefficient for a nation. you can also access the database (created 2026) to see data for most nations, and then use the sliders to create a unique Lorenz curve for that nation and determine the Gini coefficient. Why is this stuff important to know? Read below the interactive for more information on the measurements used, and possible government policy responses. Check out inequality data from all around the world :: click here to access the database Lorenz Curve, Gini Coefficient and Palma Ratio These three tools measure income inequality within an economy, providing governments and economists with evidence to evaluate distributional outcomes and design policy responses. What they are: The Lorenz Curve plots the cumulative share of income received against the cumulative share of the population, ranked from poorest to richest. A perfectly equal society produces a 45-degree diagonal line. The further the Lorenz Curve bows away from this line, the greater the inequality. The Gini Coefficient quantifies this inequality by measuring the area between the Lorenz Curve and the line of perfect equality, expressed as a value between 0 (perfect equality) and 1 (perfect inequality). Higher values indicate greater income concentration among top earners. The Palma Ratio compares the income share of the richest 10% against the poorest 40%, reflecting evidence that middle-income groups tend to receive a relatively stable share across countries, making top-to-bottom comparisons more meaningful. Why measuring inequality matters: Persistent inequality reduces social mobility, undermines economic participation, increases poverty, and weakens social cohesion. High inequality correlates with poorer health outcomes, higher crime rates, and reduced intergenerational opportunity. Policy responses: Progressive taxation — higher income earners paying proportionally more Transfer payments — welfare, pensions, and unemployment benefits redistributing income Investment in public services — universal healthcare, education, and housing reducing effective inequality Minimum wage legislation — lifting incomes at the bottom of the distribution Real-world examples: Scandinavian countries recording Gini coefficients below 0.30, reflecting strong redistribution South Africa recording one of the world's highest Gini coefficients above 0.60 Australia's Gini sitting around 0.34, moderate by developed-nation standards The Palma Ratio highlighting extreme concentration of income in nations like Brazil and Chile Subject matter Topic 2: Inequality Describe key concepts using economic terminology, including absolute and relative poverty, egalitarian society, income, transfer payments, wealth, and the welfare state. Describe a range of measures and indicators of inequality, e.g. the Lorenz curve, Gini coefficient, Henderson poverty lines, household income, mean and medium income, and equivalence scales. Explain the causes of inequality of income and wealth in Australia (e.g. educational attainment, employment status, gender, age, occupation, ethnic background, uneven distribution of factors of production, and family structure) and other factors that impact particular groups in society, e.g. Australian Aboriginal peoples and Torres Strait Islander peoples, migrants, and people living with disabilities. Select data and information from sources that offer evidence of the consequences of inequality in Australia and examine these sources to appreciate their underlying assumptions and perspectives. Analyse and evaluate inequality issues, e.g. - the private and social costs and benefits of pursuing a redistribution of income and wealth, e.g. taxation, transfer payments, subsidisation of merit goods and other assistance - government strategies and/or interventions to address inequality and measures aimed at alleviating inequality and improving living standards, e.g. taxation, transfer payments, subsidising of merit goods and other assistance. Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose.

Unit 1 Topic 2: Economic Flows On this page: Circular Flow of Income :: interactive calculator The Circular Flow of Income, Aggregate Demand and Government Intervention in Economic Cycles :: video explainer The Business Cycle :: interactive model Overview of Unit 1 Topic 2: Economic Flows :: video explainer Circular Flow of Income :: interactive calculator How to use the calculator: use the sliders to change the relative values for leakages, injections and consumption you can then determine the level of Aggregate Demand (AD), as well as whether the economy is in a blanked, contractionary, or expansionary phase. Why is this stuff important to know? Economies are in constant states of change. As economists, it's important that we can determine the level of cyclical economic activity. Understanding the changes in the level of AD in the economy helps decision-makers to make informed choices in regards to big decisions, such as: whether to invest in new capital for a business, or whether governments should increase or decrease expenditure. There are lots of other informed decisions that households, firms and government may make when they have a clear understanding on the cyclical nature of the economy. What are some other examples? The Circular Flow of Income, Aggregate Demand and Government Intervention in Economic Cycles The Business Cycle :: interactive model By now you likely have a good idea that economies work in cycles - expansion and contraction, peaks and troughs. And getting your head around economic cycles is REALLY important. Your studies in economics will be much easier when you can discern cyclical changes and structural changes in the economy. this is foundation stuff - so pay attention! The interactive model below lets you to see what is happening to the levels of our 'big 3' economic indicators - GDP, inflation and unemployment - at each phase of the business (or economic) cycle. Remember to click on the buttons to view government policy response at each phase, as well as read a bit about the Australian examples. Later on in unit 4 you take a deep dive into the data on economic cycles in the Australian economy, and government responses. Also remember to try the quiz, and importantly, write your own physical notes - writing helps build knowledge! Unit 1 Topic 2 Overview

I am currently on a three year sabbatical from classroom teaching in Australia, and residing in Amsterdam, Netherlands (returning to Australia early 2028). About Brettonomics I began posting Brettonomics videos on YouTube in 2023, with a primary focus on unpacking the questions from the past papers of Queensland Certificate of Education final external exam in Economics. These videos have had some very positive effects on student outcomes: students who were using past papers as practice exams an opportunity to get into the detail of the marking guide, and from there, to develop comprehensive writing structures and response strategies; students can work independently, at their own pace, and review concepts multiple times; students can pre-learn topics for lessons, which contributes to deeper engagement in class activities; students develop skills in grading their own work, and providing feedback to other students using rubrics. This website is built to create an engaging sequence of interactive activities for students built around the Queensland Certificate ofEducation (QCE) Economics curriculum. My primary focus on this website is to switch economic theory, models and data from the static to the dynamic through interactive economic models, data explorer tools, calculators and simulations. These activities bring the changes that occur in the economy to life. For example: instead of theoretical models (eg. price mechanism) drawn in books, students can see the changes happen in real time on the screen. students can use calculators and simulators to determine changes that occur from a change in government policy. data analysis is supported by examination of historical economic events and government policy responses. I also post teaching activities using experiential learning techniques to engage students in classroom learning. Brettonomics has always been an individual project, enacted outside of my normal teaching duties. I hope that you find some useful stuff here. About Brett I am a registered secondary school teacher in Queensland, Australia, with qualifications to teach Economics, Business, and Legal Studies. I hold a Bachelor of Commerce degree from University of Western Sydney, and Master of Teaching (Secondary) from Australian Catholic University. Prior to teaching I worked in the private sector, where I successfully led a small organisation involved in design, manufacture and sales to retail customers (in-store and online), as well as government and private sector organisations. After a successful sale of that business in 2014, I spent some time on creative projects and study. I began my teaching career in 2020. Outside of teaching, I am very involved in outdoor activities (cycling, skiing, kayaking). I've had side gig playing percussion in bands for many years. I speak English and Spanish and hope to become fluent in Dutch over the next few years. Please note All resources are made available free of charge. All resources on this website remain intellectual property of the author. All third-party resources or links are open-source and freely available to access. Contact I'm always looking for new and exciting opportunities. Let's connect. brettonomics@gmail.com

Unit 3 Topic 2: Global Economic Issues On this page: Tariffs: explainer video Tariffs on imports :: interactive model Trade tariffs :: interactive practice Quotas on imports :: interactive model Free Trade Agreements: useful websites Economic effects of Free Trade Agreements Assessment IA2: Help with data, research report structure, and report layout The three levels of economic data Subject matter for Unit 3 Topic 2: Global Economic Issues Tariffs - effects on trade and welfare :: interactive model How to use the interactive model: use the sliders (or drag curves) to shift the global supply curve and tariff value or press the 'try a scenario' button Why is this stuff important to know? When global trade occurs at the point of global allocative efficiency (equilibrium of D and S global), the most units are sold at the lowest price, and maximum consumer surplus is achieved. However domestic producer surplus is less than the levels attainable if only domestic trade takes place. Tariffs distort markets by imposing an additional cost to consumer who purchase imports. Some additional domestic producer trade may be realised, and the government can also grab some extra revenue. Ultimately however, there is a decrease in trade, and an increase in price. Source: Marginal Revolution University Tariffs - effects on trade and welfare :: interactive model How to use the interactive model: use the sliders (or drag curves) to shift the 'S global' curve and the 'S domestic + Quota' curve or press the 'try a scenario' button Why is this stuff important to know? Import quotas are a method used by governments to restrict the quantity of international goods entering domestic markets. In this interactive model, if an economy does not allow any entry of foreign goods, trade would occur at equilibrium point A ($120 and 3m units). However, if international trade were to occur without any import limits, trade equilibrium would shift to point X ($100 and 5m units). Import quotas give governments a method to have a controlled import of goods whilst still supporting domestic industries. The Australian car market benefitted from import quotas back in the day - for example, one car could be imported for every four made in Australia. The controlled method gives some additional choice for consumers at lower prices, whilst also providing a degree of protection for domestic producers. However, quotas are considered a market distortion and are not economically efficient. Free Trade Agreements: useful websites Australia's trade through time (interactive): https://www.dfat.gov.au/publications/minisite/tradethroughtimegovau/site/index.html About Free Trade Agreements: https://www.dfat.gov.au/trade/about-ftas/about-free-trade-agreements Australia's Free Trade Agreements: https://www.dfat.gov.au/trade/agreements/trade-agreements Source: Department of Foreign Affairs and Trade Economic effects of Free Trade Agreements When examining FTA's, it is important to distinguish between outcomes and economic effects. The outcomes listed on the DFAT website are the changes to trade barriers between nations as a result of the enacted FTA. Generally this is the removal of trade barriers such as tariffs, quotas etc. The bigger question to analyse is: what have been the economic effects as a result of nations enacting the FTA? So we can do some intertemporal analysis to determine the nature and size of trade before the FTA and after the introduction of the FTA. Let's workshop an analysis example of through examining the FTA between Australia and Indonesia: Australia entered an FTA with Indonesia in 2020. Prior to the FTA (2007 - 2019), total trade between the two nations grew at an annual average of about 5%. The dip around 2020 is likely a result of economic downturn of COVID pandemic, so let's start next analysis at 2021. After the implementation of the FTA, total trade between the two nations grew at an annual rate of 27% (2012 - 2024). It is important to recognise that correlation doesn't always equal causation, so it is important to deepen analysis by looking at different aspects of trade and relationships to determine the connections and economic effects. However, in this instance, the significant change in annual growth of trade can very likely be attributed to the improved market access (for both nations) introduced by the FTA. How could I deepen my analysis to evaluate the economic effects of the FTA? Step 1: Review the specific industry sectors where nations have sought to improve access to markets by the removal of trade barriers (eg. beef exports to Indonesia). Step 2: Develop your own analysis of the intertemporal changes within those industries (before and after FTA) to determine the relative effects of the FTA. Try to find examples where there is a positive effect, as well as examples where the FTA has had a limited (or negative) economic effect. Use your examination of the positive versus negative effects to create your 'on balance' evaluation. Assessment IA2: Research Report Research report structure Here is a video that provides a clear structure for a research report in economics. It can be difficult to know where to start, so the outline provided helps you to: Link your comprehension of economic theory to an economic issue in society. Understand how to analyse the issues from the perspectives of various stakeholders. Develop a logical and persuasive evaluation and balanced judgement. Internal Assessment (IA2) for this topic is a REPORT. Here is a video giving some guidance on report structure and layout, using MS Word. Remember: 4 of the 25 marks for this IA relates to "creating a response", so spend some time getting your report up to an excellent professional standard, and grab four easy marks. Useful data tools for your research. Here is a video explaining how to use the data visualisation tools at the International Monetary Fund website. This website has the most comprehensive range of economic data sets available. Go to https://www.imf.org/en/Data THE THREE LEVELS OF ECONOMIC DATA A big challenge in writing an economics research report is figuring out how to connect the data to demonstrate elements such as cause and effect relationships - how do we create a path of analysis from the microeconomic issues through to macroeconomic outcomes? So let's have a look at how we can create a three level system to deepen our analysis. LEVEL 1 DATA Data relating to a stakeholder or individual sector of the economy (eg.firms and industry sectors, consumers or government) Examples: data on industry trade with foreign customers foreign investment activity into an industry sector (eg. mining investment) LEVEL 2 DATA Data relating to an overall (aggregate) aspect of trade or investment Examples: total export or import trade values or volumes total foreign investment Balance of Trade Currency valuations LEVEL 3 DATA The macroeconomic indicators: Gross Domestic Product Inflation Employment Balance of Payments Applying the three levels of economic data :: Australia / China trade example In 2021, China enacted a range of trade protection on imports from Australia. Most of these barriers were removed in 2023. The three level model helps us to analyse and evaluate outcomes during this period of export trade constraints. LEVEL 1 Australia coal exports to China LEVEL 2 Australia- China bilateral balance of trade LEVEL 3 Australia Current Account Creating connections between data and economic information presents a significantly more complete picture: At level 1 , the negative effect of China trade protection on Australia's coal exports is clearly evident. This then flows through to level 2 , where a downturn in bilateral trade balance is evident in 2022. At level 3 , the effect is also evident in Net Goods and Services (top line) and Current Account Balance (red line). I think you'll agree that this method provides some significant insight into the issue, and yields a deeper analysis than just focussing on a dataset in isolation. Some final ideas: Remember: Correlation doesn't always equal causation , so make sure you do further research to determine cause-and-effect. The Analysis criteria in the marking guide requires "discerning meaning drawn from patterns and trends ..." as well as "... explanation of economic relationships ...". I reckon that this three level model will give you some targets to achieve "discernment". Subject matter Topic 2: Global economic issues In Topic 2, students study three major factors affecting Australia’s trade relationships with the rest of the world. Firstly, the factors that have contributed to globalisation are explored from Australia’s viewpoint. Secondly, economic ideas and models are used to examine the impacts of different barriers to trade, and the economic tensions they create. Finally, the impacts of international trading agreements are considered. Describe key concepts using economic terminology, including methods of trade protection, economic integration, economic union, globalisation and trade liberalisation. Explain, analyse and evaluate the factors that have contributed to the growth of multi-company and multinational supply chain integration, e.g. the location of natural factor endowments; digital and other innovation; infrastructure (including logistics); and government incentives factors that have contributed to globalisation and current international trade patterns, including technology; multi-national corporations; regional trading blocs; and deregulation of financial capital markets and of non-government institutions, e.g. the World Trade Organization, International Monetary Fund and World Bank Explain the methods of protection employed by nations, and construct supply and demand diagrams to demonstrate the effect of methods of trade protection, including tariffs and non-tariff barriers (e.g. subsidies, quotas and bureaucratic requirements). Analyse and evaluate the economic arguments for and against protectionism and trade liberalisation responses from different viewpoints using economic criteria (e.g. economic efficiency, economic growth, living standards or resource allocation) to make a decision about the past, present or future regarding the relative merits of trade policy alternatives. Explain bilateral, regional and multilateral trade agreements that involve Australia the contemporary role of ‘free trade’ agreements and their impact on Australia’s international trade, including trade creation and trade diversion. Analyse and evaluate the economic outcomes of international trading bloc agreements (e.g. Australia–New Zealand Closer Economic Relations Trade Agreement (CER), European Union (EU), North American Free Trade Agreement (NAFTA), ASEAN–Australia–New Zealand Free Trade Agreement (AANZFTA)) on Australian economic growth, and decide on the net benefits using economic criteria, e.g. economic efficiency, economic growth, living standards or resource allocation. Create responses that communicate economic meaning using data, information, graphs and diagrams in paragraphs and extended responses to suit the intended purpose. Reproduced from Queensland Curriculum and Assessment Authority, Economics 2025 v1.2 General senior syllabus October 2024, page 43

Price mechanism :: interactive model How to use the interactive model: use the sliders or drag the curves to view changes in supply of demand use the sliders to visualise changes in price elasticity. the interactive will calculate the new equilibrium positions, as well as determine consumer surplusand producer surplus Why is this stuff important to know? Price equilibrium is a foundational concept in economics that demonstrates market efficiency. This is characterised by: optimum quantity of trade at a price, and where the benefits of trade (welfare) for both consumers and producers are at maximum levels. Economists consider this outcome to reflect the most efficient allocation of scarce resources (allocative efficiency). Graphing Demand and Supply Curves :: Interactive Practice Click here to access the videos, notes and practice quizzes for Supply, Demand and Market Equilibrium created by Marginal Revolution University Interactive practice activities developed and owned by Marginal Revolution University . Published here for educational purposes. Change in Demand versus Change in Quantity Demanded (Interactive Practice) Interactive practice activities developed and owned by Marginal Revolution University . Published here for educational purposes. Change in Supply versus Change in Quantity Supplied (Interactive Practice) Interactive practice activities developed and owned by Marginal Revolution University . Published here for educational purposes. Shifts in Supply or Demand :: Interactive Practice Interactive practice activities developed and owned by Marginal Revolution University . Published here for educational purposes. Shifts in Supply and Demand :: Interactive Practice Interactive practice activities developed and owned by Marginal Revolution University . Published here for educational purposes. Graphing Elasticity :: Interactive Practice Interactive practice activities developed and owned by Marginal Revolution University . Published here for educational purposes. Price Elasticity :: Interactive Practice Interactive practice activities developed and owned by Marginal Revolution University . Published here for educational purposes.

Student Resources for Economics Brettonomics.com is an interactive website for high school students of economics. My goal is to help you to better understand economics through actively doing stuff - drive your own learning rather than just being a passenger. There are lots of interactive activities on the website: interactive models, simulations, data explorers, videos and quizzes. The resources are organised to follow the Queensland Certificate of Education (QCE) syllabus for Economics and they present economics from the Australian perspective .... but they are all equally useful for high school economics students around the world. All the best with your studies! Click on the links in the menu below to access all the resources Unit 1 Topic 1 The Basic Economic Problem Button Unit 1 Topic 2 Economic Flows Button Unit 1 Topic 3 Market Forces Button Unit 2 Topic 1 Markets and Efficiency Unit 2 Topic 2 Inequality Unit 3 Topic 1 International Trade Unit 3 Topic 2 Global Economic Issues Unit 4 Topic 1 Macroeconomic Objectives and Theory Button Unit 4 Topic 2 Economic Indicators and Past Budget Stances Button Unit 4 Topic 3 Economic Management Button QCE External Exam for Economics Get in Touch brettonomics@gmail.com

Teaching Resources for Economics In these links you will find some of the useful resources that I have developed for teaching economics. I have a particular interest in the use of experiments and games to develop intuition in understanding, and to create 'sticky' learning. This section began construction in 2025, and is a work in progress. 1 Unit 1: Markets and Models Teaching resources for: Topic 1: Economic problem Topic 3: Market forces 2 Unit 2: Modified Markets Unit 2 Topic 2 Inequality : A game to teach income inequality, the Lorenz curve and Gini coefficient 3 Unit 3: International Economics Unit 3 Topic 2 : A taxonomy for economic data 4 Unit 4: Contemporary Macroeconomics Unit 4: Study and summary guides Useful websites Interactive games for students Marginal Revolution University : u nit plans, courses, great videos and explainers, and interactive practice games. Next Gen Personal Finance : a selection of online games and challenges International Monetary Fund EconEd : interactives and explainers. Escape from Barter Island : a fun cartoon trading interactive game. The Fiscal Ship : fiscal policy online game. Meme games : don't take these too seriously! Teaching resources Marginal Revolution University : Unit plans, courses, great videos and explainers, and interactive practice games. Reserve Bank of Australia : Explainers, chart packs, digital interactives, and teacher and student workshops. Ross Gittins : weekly articles unpacking current Australian economic issues. Core Econ : open source textbooks (undergrad level) and visualisation tools (inflation, inequality). EconEdLink : teaching resources and lesson plans. Models and data International Monetary Fund Datamapper : all the data you will need, available in downloadable spreadsheets Interactive Economics : tools to develop models and graphs to understand economic concepts. Econ Graphs : interactive economic models. Visual Capitalist : excellent infographics and data visualisations Get in Touch brettonomics@gmail.com

Teaching Resources QCAA Economics Unit 3: International Economics On this page: Unit 3 Topic 2 : A taxonomy for economic data analysis THE THREE LEVELS OF ECONOMIC DATA BACKGROUND: A critical issue that I see students face in developing their IA2 research reports is how to create links in data to demonstrate how changes in one sector of the economy (or dataset) can be evidenced in another sector (or dataset). So my question then became: how can I create a sequence of targets to help students to analyse data and economic information at a deeper and more perceptive level? Subsequently, I have been using a three level taxonomy with students. The intention is to create an understanding of how to connect information from the granular to the big picture - the idea being that they can create a path of analysis from the micro to the macro . In terms of the marking guide, it will likely help shift students' work closer towards that 'perceptive' end of the ISMG. Importantly, it has also created a meta-language in economics data analysis - for reflection on the quality and quantity of the research information that the student has collected, to identify information gaps, and to give some targets for the structure of the analysis presented in the report. This explainer is also published on the student resources page . Below is the explainer for students. I would encourage you to give it a try with your classes! A big challenge in writing an economics research report is figuring out how to connect the data to demonstrate elements such as cause and effect relationships - how do we create a path of analysis from the microeconomic issues through to macroeconomic outcomes? So let's have a look at how we can create a three level system to deepen our analysis. LEVEL 1 DATA Data relating to a stakeholder or individual sector of the economy (eg.firms and industry sectors, consumers or government) Examples: data on industry trade with foreign customers foreign investment activity into an industry sector (eg. mining investment) LEVEL 2 DATA Data relating to an overall (aggregate) aspect of trade or investment Examples: total export or import trade values or volumes total foreign investment Balance of Trade Currency valuations LEVEL 3 DATA The macroeconomic indicators: Gross Domestic Product Inflation Employment Balance of Payments Applying the three levels of economic data :: Australia / China trade example In 2021, China enacted a range of trade protection on imports from Australia. Most of these barriers were removed in 2023. The three level model helps us to analyse and evaluate outcomes during this period of export trade constraints. LEVEL 1 Australia coal exports to China LEVEL 2 Australia-China bilateral balance of trade LEVEL 3 Australia Current Account Creating connections between data and economic information presents a significantly more complete picture: At level 1 , the negative effect of China trade protection on Australia's coal exports is clearly evident. This then flows through to level 2 , where a downturn in bilateral trade balance is evident in 2022. At level 3 , the effect is also evident in Net Goods and Services (top line) and Current Account Balance (red line). I think you'll agree that this method provides some significant insight into the issue, and yields a deeper analysis than just focussing on a dataset in isolation. Some final ideas: Remember: Correlation doesn't always equal causation , so make sure you do further research to determine cause-and-effect. The Analysis criteria in the marking guide requires "discerning meaning drawn from patterns and trends ..." as well as "... explanation of economic relationships ...". I reckon that this three level model will give you some targets to achieve "discernment".

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