Mastery of Applied Economics

Compare macroeconomics and microeconomics to understand national income, GDP, unemployment, inflation, and price indices. Examine how market supply and demand shape price levels and economic growth.

Explore the aggregate supply and demand model (AS-AD) to analyze real GDP, inflation, and the effects of shocks on equilibrium driven by consumption, investment, government purchases, and net exports.

Explore how gross domestic product (GDP) measures a country's economic activity, including consumption, government spending, investment, and net exports, and examine the product, income, and expenditure approaches.

Measure economic growth by the percent change in real GDP and GDP per capita, and distinguish intensive from extensive growth while noting the long-run trend versus the business cycle.

Explore how employment ties to GDP and productivity, and how hiring, firing, and retirement drive labor markets, wages, and full-time equivalent job creation across public and private sectors.

Explains full employment as the efficient use of all labor resources, notes frictional and structural unemployment, contrasts official and true unemployment, and examines the inflation–unemployment trade-off via the Phillips curve.

Identify the natural rate of unemployment as the equilibrium rate of unemployment in a healthy economy, shaped by frictional, structural, and surplus unemployment.

Inflation is a sustained rise in the general price level that reduces purchasing power over time. Deflation contrasts with inflation and prompts central bank action when prices swing.

Deflation lowers purchasing power and income, shrinking demand and triggering unemployment as prices fall. The lecture contrasts deflation with inflation and explains the CPI as a key price index.

Monetary policy uses central bank actions to steer money supply and interest rates, aiming to two to three percent inflation on average while supporting currency stability, employment, and sustainable growth.

Cash rate changes in Australia pass through to money market rates, bond yields, and deposit and lending rates, influencing aggregate demand and inflation with time lags.

Explore how the reserve bank maintains independence from government, pursues long-term monetary policy goals, and sustains accountability through public policy announcements, minutes, four annual statements, and governor appearances before parliament.

Fiscal policy guides the nation's economy by adjusting spending and tax rates, complementing monetary policy set by a central bank that influences the money supply.

Explain how fiscal policy uses taxes and government spending to influence GDP, aggregate demand, and employment, contrasting expansionary and contractionary approaches.

Fiscal policy affects different groups based on policymakers' goals, with tax cuts and spending benefiting specific populations, influencing employment and the economy's overall level of government involvement.

Explore the sources of market failure and how government intervention can improve welfare by addressing externalities, imperfect information, merit and demerit goods, monopolies, and public goods.

Explore how externalities generate positive external benefits or negative external costs for uninvolved parties, driving overproduction or underpricing, and examine market power, monopoly, and oligopoly as inefficiency sources.

Analyze how structural market failure and ownership advantages create rents and barriers to entry, with acquisitions and internalization reducing information asymmetry, risk, and costs in multinational markets.

Information asymmetry arises in markets, and disclosure and regulation address it, while bounded rationality and time constraints shape decisions and opportunistic behavior.

Compare fixed and floating exchange rates and how central banks use reserves to influence currency values. Explore how supply and demand, market interventions, and black markets shape stability and inflation.

Define interest rate as the principal's percentage paid by a borrower to a lender per period, usually yearly, while central banks target it to influence investment and inflation.

Discover the five components of the rate of return: real risk-free rate, inflation premium, liquidity premium, default risk premium, and maturity premium; how each affects expected return across time.

Analyze how government measures create trade barriers that restrict overseas trade and investment through customs duties, procedures, standards, technical regulations, health and safety rules, intellectual property protections, shaping domestic competitiveness.

Examine how tariffs tax imported goods—specific and ad valorem—to shape trade policy, raise revenue, and affect consumers, domestic producers, and potential trade wars.

Analyze how taxes and subsidies shift supply or demand, changing consumer and producer prices and quantities, with elasticities determining who bears the burden.

Understand dead weight loss as allocative inefficiency from monopoly pricing, externalities, taxes, subsidies, or binding price ceilings or floors. See how producer surplus declines more than any consumer gain.

Financial economics analyzes monetary activities and the interrelation of prices, interest rates, and shares in financial markets, focusing on asset pricing, investment theory, corporate finance, and financial econometrics under uncertainty.

Apply core economic analysis to international economics, highlighting sovereign states, quotas, exchange rates, gains from trade, balance of payments, trade protectionism, policy coordination, and comparative advantage.

Trace the origins of transaction costs from early monetary economics and Coase's work, through Williamson's framework, and explore definitions, contracts, and new institutional economics.

Labor economics studies the labor force as a productive input, including employees, employers, the self-employed, and the unemployed, and analyzes efficiency, deployment across industries, and pay in contemporary industrialised economies.

Explore how environmental economics uses regulations, pollution quotas, and property rights to address market failure, manage public resources like lakes and rivers, and promote social well-being.

Explore how energy economics integrates engineering, geology, and policy to analyze climate change, energy markets, and sustainability, with emphasis on demand and supply elasticity, deregulation, and energy policy.