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PATHWAYS

2019

 
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Year 10 | IB | VCE | Learning Areas | Other Curriculum | Student Development |

VCE Business Studies

Economics Unit 2: Contemporary Economic Issues

Prerequisites

There are no prerequisites for this unit but previous experience in the subject is preferred.

Course Description

Students contemplating a tertiary course in commerce or business should note that courses may require students to undertake some study in economics. Prior experience of economics at secondary school can be an advantage.

As a social science, economics often looks at contemporary issues where there are wide differences of opinion and constant debate. In most instances the decisions made by consumers, businesses and governments may benefit some stakeholders but not others. Trade-offs, where the achievement of one economic or public policy goal may come at the expense of another, are the subject of much debate in economic circles.

Students focus on the possible trade-off between the pursuit of growth in incomes and production and the goal of environmental sustainability and long-term economic prosperity. They investigate the importance of economic growth in terms of raising living standards and evaluate how achievement of this goal might result in degradation of the environment and the loss of key resources. Students examine whether the goals of economic growth and environmental sustainability can be compatible and discuss the effect of different policies on the achievement of these important goals.

Economic growth is generally associated with improvements in living standards as real incomes grow over time. Students explore how the benefits of economic growth are shared in an economy and begin to appreciate that efforts to increase economic efficiency might lead to a more inequitable distribution of income. They evaluate the role of government intervention in markets and discuss whether achieving greater equality causes a decline in economic growth and average living standards. Through the analysis of specific policy measures, students analyse and question the nature of this key trade-off and evaluate whether there is a degree of compatibility between equity and efficiency.

Students consider the influence on the world’s living standards of the decisions made and the actions taken in the global economy by investigating one or more contemporary global issues and the trade-offs involved. Through an examination of the issue, students gain a greater appreciation of additional factors that can affect living standards in both Australia and in other nations. They consider the perspectives of relevant stakeholders and evaluate the validity of individual and collective responses to global issues.
 

Areas of Study

Economic growth, long-term economic prosperity and environmental sustainability

In this area of study students consider the meaning and importance of economic growth and its effect on material and non-material living standards. The Australian Government generally pursues policies that are focussed on at least maintaining, and in some cases, increasing the rate of economic growth. Economic growth is generally thought to promote improvements in living standards as it is associated with increasing incomes, literacy rates and health outcomes. Students evaluate the effect of an ever growing economy on other aspects of modern life. Does economic growth make life better or are there some costs involved?

Students investigate the nature of key economic trade-offs; situations where the achievement of one goal may come at the expense of another. There may be a trade-off between the goal of economic growth and the goal of environmental sustainability. Students consider the effect of economic growth on future generations and begin to appreciate some of the current environmental challenges that have been created from past and current economic decisions. They consider the role of alternative economic indicators and evaluate some Australian Government responses from both an economic and environmental perspective.
 

Economic efficiency and equity

Economists frequently talk about the importance of efficient allocation of resources and how fairly income and opportunity are distributed between individuals and groups within society. In this area of study students consider the nature of the potential trade-off between equity in the distribution of income and the efficiency of resource allocation in Australia.

Students analyse the factors that may lead to income disparity in Australia and one other nation, and why the income of some people is below the poverty line. They examine the effect of poverty and income inequality on individuals and the wider economy and explore the idea of intergenerational poverty.

Students investigate the factors contributing to, and the effects of, increasing economic efficiency. They examine the effect of efficiency on income distribution and the incidence of poverty. Are the two mutually exclusive goals or can an economy strike the right balance? To develop their application skills in this area of study, students evaluate contemporary budgetary policy initiatives and how these may have affected the goals of equity in the distribution of income and efficiency of resource allocation.
 

Global economic issues

In this area of study students investigate one or more contemporary global economic issue/s. Students examine the selected economic issue/s from the perspective of the relevant stakeholders and evaluate decisions that may have been made with regard to these issue/s. Students consider the economic costs and benefits associated with greater levels of international trade, movement of capital and economic integration. They investigate whether Australia’s prosperity depends upon economic events in the rest of the world and whether the decisions made by Australian economic agents have any effect on the global economy. They observe trade-offs in the wider economy and undertake cost-benefit analyses to evaluate the effect of decisions made to address current global economic issue/s.

Assessment

Outcomes
Assessment Tasks
(school-assessed coursework)
On completion of this unit the student should be able to explain the factors and policies that may influence economic growth and environmental sustainability, and analyse the potential trade-off. Problem-solving tasks or essay or folio or presentation.
On completion of this unit the student should be able to explain the factors and policies that may influence equity in the distribution of income and efficiency of resource allocation, and analyse the potential trade-off. Problem-solving tasks or essay or folio or presentation.
On completion of this unit the student should be able to explain the factors that may influence a global economic issue/s and evaluate potential consequences associated with actions to address the issue/s. Problem-solving tasks or essay or folio or presentation.

Overall Final Assessment

End of Semester Examination – 1.5 hours.

Information can be obtained from the Victorian Curriculum and Assessment Authority, Victoria, Australia: www.vcaa.vic.edu.au