11–12Economics 11–12 Syllabus (2025)

Economic objectives of the Australian Government, including higher quality of life, economic growth, full employment, price stability, equitable distribution of income and wealth, and environmental sustainability

Constraints on the government’s ability to simultaneously achieve economic objectives

Fiscal policy as a macroeconomic, demand-side, counter-cyclical tool for economic management

Budget outcomes, including balanced, surplus and deficit

Fiscal stance, including neutral, contractionary and expansionary

Identify budget outcomes and fiscal stance

Discretionary (structural) and non-discretionary (cyclical) components of the budget

Limitations of financing a budget deficit through debt financing, monetary financing and asset sales, including servicing costs, the crowding-out effect, inflation and loss of future revenue

Construct and interpret a loanable funds graph to demonstrate the crowding-out effect

Uses of a budget surplus, including contributing to sovereign investment funds and retiring Australian Government debt

Effects of the budget on the stabilisation of the business cycle, including automatic stabilisers and discretionary adjustments to government expenditure and taxation, especially during significant economic downturns

Effects of the budget on the redistribution of income and wealth, including progressive, regressive and proportional taxation, bracket creep and welfare spending

Effects of the budget on the reallocation of resources between industries in the economy

Effects of budget outcomes and fiscal stances on Australian Government debt and fiscal sustainability, including Australian Government debt as a proportion of GDP

Effectiveness of fiscal policy in achieving Australia’s economic objectives, including reference to relevant data

Limitations to the effectiveness of fiscal policy, including policy lags, political considerations, global influences, the relative size of Australian Government debt and credit ratings

Monetary policy as a macroeconomic, demand-side, counter-cyclical tool for economic management

Economic objectives of the Reserve Bank of Australia (RBA), including price stability and full employment, and the role of monetary policy in achieving these objectives

Features of the inflation target, including flexibility and its role in anchoring inflation expectations

Role of the RBA’s Monetary Policy Board and factors influencing its decisions on setting the target cash rate

Effects of monetary policy on the economy, including the saving and investment channel, cash-flow channel, asset price and wealth channel and exchange rate channel

Rationale for using unconventional monetary policy

Effectiveness of monetary policy in achieving the RBA’s economic objectives of price stability and full employment, including reference to relevant data

Limitations to the effectiveness of monetary policy, including policy lags, the zero lower bound and inability to target specific areas of the economy

Role and nature of microeconomic policies, including raising productivity and improving outcomes on social issues to enhance quality of life

Microeconomic reform to improve productivity in Australia in the areas of competition policy, regulation and deregulation, infrastructure development and taxation

Microeconomic policies to reduce inequality and improve wellbeing in the areas of health and housing in Australia

Effects of microeconomic policies on households, businesses, the government and the economy

Effectiveness of microeconomic policies in achieving Australia’s economic objectives

Limitations to the effectiveness of microeconomic policies, including policy lags, political considerations and regulatory capture

Features of main wage-setting mechanisms in Australia, including individual arrangements, enterprise bargaining agreements and industry awards

Advantages and disadvantages of centralised and decentralised wage determination

Costs and benefits of non-standard work arrangements for individuals, businesses and the economy

Purpose of the industrial safety net, including the minimum wage

Effects of changes in union representation on bargaining power and wages in Australia

Role of education and training funding and migration policy to improve the size and skills of the Australian workforce

Effectiveness of labour market policies in achieving Australia’s economic objectives

Limitations to the effectiveness of labour market policies, including policy lags and political considerations

Role of Aboriginal and Torres Strait Islander Peoples' land and water management Practices in economic environmental policy, including caring for Country

Environmental command-and-control instruments, including bans, restrictions, efficiency standards and technical specifications for products

Environmental market-based instruments, including price-based instruments (taxes and subsidies) and quantity-based instruments (permit schemes)

Identify the optimal size of a tax on producers from a negative externalities graph

Advantages and disadvantages of market-based instruments relative to command-and-control instruments

Role of Australia’s international agreements and national targets for greenhouse gas emissions, including the extent of their influence on domestic government policy

Effectiveness of Australia’s policies in achieving greenhouse gas emission targets

Limitations to the effectiveness of environmental policies, including policy lags, political considerations, global free riders and carbon leakage

Need for a coordinated mix of macroeconomic and microeconomic policies to achieve Australia’s short-term and longer-term economic objectives and to respond effectively to economic shocks

Propose and evaluate policy options to achieve the economic objectives of higher quality of life, economic growth, full employment, price stability, equitable distribution of income and environmental sustainability in hypothetical and contemporary Australian contexts