Unit 3

In Unit 3 you will study the economic goals of the Australian government. The goals that you will need to understand are:

Low Inflation
Sustainable Economic Growth
Full Employment
External Stability
The Equitable Distribution of Income

These are not the only economic goals that are pursued by the government. For example, the Federal Government also aims to ensure that the distribution of federal funds to the States is achieved in a fair manner, and that the distribution of wealth in the community does not become any more inequitable than it already is. However, for our purposes these are the only goals that you will need to study.

To analyse these goals, and to make predictions about the way in which these goals will change, you will need to have a strong understanding of The Market Mechanism. As such, your study of this unit will begin with an introduction to this very useful tool. You will also need to be able to distinguish between microeconomic activity and macroeconomic activity.

Finally, it is vital that you understand the way in which the goals of the Australian government interact. It is impossible for any economic policy maker to target just one goal. As the economy is made up of a tightly-knit group of interacting factors, changing one economic outcome will necessarily affect many others. In understanding these links you will be able to make predictions about the way in which a change in any factor will go on to affect not only the goal that you are considering at the time, but also the related goals which will also be affected.