Unit 2

After completing your study of Unit 1 Economics you should now have a sound understanding of the basic models that economists use every day. Throughout the rest of your study you will continue to use supply and demand graphs, the five sector model, the production possibility frontier and the many terms that you have already learned.

In particular, the skills that you have learned in Unit 1 are transferable. By now you will be very familiar with the economic skill of analysing a supply and demand factor to examine its impact on the economy. So far you have looked at some of the domestic economic goals of the Australian government. In Unit 2, you will shift your attention to the external sector.

We live in a globalised world. The Australian economy is dependent on many other countries around the world for food, clothing, electronic goods and much more. If you have ever stopped to wonder why Australia can’t exist independently of other countries, ask yourself this simple question – how would you be reading these words if it wasn’t for our willingness to trade? There are no Australian made computers, and even if there were the infrastructure of the internet was all developed in other countries. We could not do the things that we do today if it wasn’t for our willingness to trade.

This unit is broken down into two halves. In the first section you will look at Australia’s trading patterns, and the composition of our trade. You will also begin to examine the way in which Australia’s external relationships are measured. If you have ever wondered why the dollar changes in value every day, you will find out all about it here. (You might also learn how to predict the changes before they happen….)

Following this, you will look at economic globalisation. This has been a controversial topic for many years, and there have been protests all over the world. During this unit you will develop your own, informed opinion about economic globalisation.