Course Title: Apply economic principles to work in the financial services industry

Part B: Course Detail

Teaching Period: Term2 2014

Course Code: ECON5049C

Course Title: Apply economic principles to work in the financial services industry

School: 650T TAFE Business

Campus: City Campus

Program: C6113 - Advanced Diploma of Accounting

Course Contact : Arie Herrnstadt

Course Contact Phone: +61 3 9925 5897

Course Contact

Name and Contact Details of All Other Relevant Staff

Course Coordinator
Arie Herrnstadt 03 9925 5897
Contact time: by appointment
Level 5 Staff Room

Name and Contact Details of All Other Relevant Staff
Claudio Marasco,

Nominal Hours: 60

Regardless of the mode of delivery, represent a guide to the relative teaching time and student effort required to successfully achieve a particular competency/module. This may include not only scheduled classes or workplace visits but also the amount of effort required to undertake, evaluate and complete all assessment requirements, including any non-classroom activities.

Pre-requisites and Co-requisites


Course Description

This unit describes the performance outcomes, skills and knowledge required to apply broad principles of financial economics that underpin a range of tasks and functions in the financial services industry. It includes understanding how financial instruments are priced in markets and techniques and processes government and organisations use to manage financial risk demonstrating broad knowledge of economic theories and related decision-making in a national and organisational economic context.

No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement.

Ideally each student group should have access to a laptop. It is however recommended that you have access to a mobile computing device to allow greater flexibility in terms of where you can work on campus both in and outside class times.


National Codes, Titles, Elements and Performance Criteria

National Element Code & Title:

FNSINC601A Apply economic principles to work in the financial services industry


1. Identify economic principles and theories related to financial services functions and tasks

Performance Criteria:

1.1 Knowledge of economic principles that apply to the industry is developed and applied
1.2 Microeconomic theory of markets and how this influences financial products and services is understood
1.3 Capital adequacy regulation and requirements as they apply to work functions are accessed and considered.


2. Evaluate economic aspects that apply to decision making

Performance Criteria:

2.1 Relevant financial modelling techniques are applied to economic data to inform decision making
2.2 Appropriate asset pricing models and their application are known and used
2.3. Models of determining organisational value in relation to capital structure are applied.


3. Review own work

Performance Criteria:

3.1 Own work is evaluated in the context of relevant economic principles
3.2 Ways to improve performance through understanding of how economics applies to own decision making are considered.


4. Maintain a personal understanding of economic policies

Performance Criteria:

4.1 Current economic theories and their impact on the industry are researched to ensure relevant knowledge is current
4.2 Contemporary economic principles are integrated into work practices.

Learning Outcomes

Learning Activities
In-class activities will account for 51 of the 60 nominal hours allocated to this course and will include lectures, tutorial exercises and class discussion. The remaining 9 hours of self-directed learning will be taken up with work on the assignment outside scheduled class.

Details of Learning Activities

In-class activities will account for 51 of the 60 nominal hours allocated to this course and will include lectures, tutorial exercises and class discussion. The remaining 9 hours of self-directed learning will be taken up with work on the assignment outside scheduled class.

Teaching Schedule

Students are expected to check their student email and myRMIT online at least weekly for messages. If absent from class you are also responsible for keeping up with any changes and for downloading, reading notes and completing class exercises that you have missed.

Students are expected to either bring a computer to class to access the course notes and exercises for each topic, or to print the relevant notes and exercises before coming to class so that class time is effectively used. To enable you to print the course material before attending class, the notes and exercises will become available on the myRMIT Blackboard site the week before starting each new topic.

During each class you will be directed which exercises to complete. These exercises will be in the form of multiple choice questions, case studies, short and longer answer questions.

The nominal hours and topic sequence below is are a guide only and represent the total teaching time and student effort required to successfully complete the course. This may include not only scheduled classes but also the amount of effort required to undertake, evaluate and complete all assessment requirements, including any non-classroom activities.

Full time and part time students please note:

1.  There may be a slight variation in topic or assessment timing as deemed necessary by your teacher.
2.  Due to time limitations during classes you are expected to follow and reinforce up class topics with supplemetary exercises, as well as check your answers, in your own time.
3.  The exercises specified are the minimum deemed necessary to support your learning. Other exercises are available to further assist your learning, or may also be given.


Week Commencing Weekly topics Elements Assessment Relevant topic exercises
1 7 Jul Economics: relevance to accountants                                                                                                               1, 2   Topic 1 Exercises                                             
2 14 Jul Effect of demand factors on prices 1, 2   Topic 2 Demand Exercises Exs 1,2,4-7, Text Chapter 2 self test and review questions
3 21 Jul Effect of supply factors on prices 1, 2  

Tut 3 Supply Exs 1,2,4-6Text Chapter 2 self test and review questions

4 28 Jul Price equilibrium, demand and supply 1, 3   Topic 4 Equilibrium Price Qs Exs 1,3,4, Text Chapter 2 self test and review questions
5 4 Aug Effect of simultaneous Demand and Supply changes 1, 3 Task 1 Phase 1

Topic 4 Equilibrium Price Qs Exs 1,3,4, Questions as above

6 11 Aug Effect of market structures and competition on pricing 2   Topic 5 Market Structures Part 2 Ex 3,4. Text Chapter 4 exercises
7 18 Aug Factors determining macroeconomic activity: circular flow of income. 2  

Topic 6 Circular Flow MCQ 11, Applied Qs 2,3,4.

8 25 Aug Measuring economic activity for decision making: the business cycle 2   Topic 7 Agg Demand/ Nominal GDP Applied Exs 1-4.
  1 - 7 Sept MID SEMESTER BREAK      
9 8 Sept Business cycle phases and their distinguishing features 2,3   Topic 8 Business cycle features notes, Tut Qs 1-8, Text Chapter 6 exercises
10 15 Sept Australian financial industry: regulations and capital requirements 1,2 Task 1 Phase 2 Tut 9 Financial system Part 1 on Reg authorities and gen financial system MCQs 1-10, Text Chapter 6 exercises
11 22 Sept Reducing business cycle fluctuations using monetary policy 1,2,4  

Tut 9 Financial system and monetary policy (Part 2 on Monetary Policy) Qs 1-10, Text Chapter 7 exercises

12 29 Sept Reducing business cycle fluctuations using fiscal policy 1,2,4  

Topic 10 Fiscal policy Exs 1,2, Applied Exs 1-5 all MCQs 1-12, Text Chapter 7 exercises

13 6 Oct Revision 1-4 Task 1 Phase 3

 Revision exercises

14 13 Oct Test  1-4 Test  
15 20 Oct Feedback      
16 27 Oct Retests if applicable      

Learning Resources

Prescribed Texts

Di Stasio & Georgeson, Apply Economic Principles (2nd/2012 ed), Better teams Publications



Other Resources

Course website on Blackboard

Newspapers and media articles and programs

Relevant websites

Overview of Assessment

Assessment may incorporate a variety of methods including technical requirements documentation, homework, assignments, group and/or individual projects, in class exercises, written and practical tests, problem solving exercises, presentations, direct observation of actual and simulated work practice, presentation of a portfolio of evidence which may comprise documents, and/or photographs and/or video and audio files, review of products produced through work-based or course activities.

Students are advised that they are likely to be asked to personally demonstrate their assessment work to their teacher to ensure that the relevant competency standards are being met. Students will be provided with feedback throughout the course to check their progress

Assessment Tasks

You must successfully complete the two tasks to be deemed competent in this unit, with greater weighting given to the test answers than to the assignment.

TASK 1 Individual assignment 1200 words covering Weeks/topics 1-12

Presentation and assessment will be broken into three phases:

Phase 1 due COB 8 Aug covering Topics 1 to 4
Phase 2 due COB 19 Sept covering Topics 5-8
Phase 3 due COB 10 Oct covering Topics 8-9

Students will select and "buy" one comapny’s shares for a total of $10,000, compare the change in the value of their portfolio with the change to the All Ords Index. They will also value the share based on ratios such as the Price Earnings Ratio to determine whether the current value is a sheap or expensive buy.

They will also explain micro and macroeconomic reasons for the company’s profitability, due to underlying causes of changes in market affecting the demand for and supply of one of the company’s products. To do this they will also demonstrate that they can correctly use a combined demand/supply graph to explain how the equilibrium price and/or quantity sold of one of the of the company’s products changed.

Finally they will determine the current phase of the business cycle, discuss appropriate counter-cyclical measures taken by authorities, and discuss how these measures would affect the business decisions of the company.

TASK 2 Closed book test

Closed book test, maximum duration 1.5 - 2hours, consisting of multiple choice and/or short answer questions covering up all topics.

Assignment submission Requirements

Task must be submitted via Blackboard and through Tunitin, a plagiarism checking tool. Turnitin will assess your work in approximately one minute, and return a colour coded response for the originality of the text. For information on Turnitin see:

Student FAQ,
Student procedures and account setup (pdf),
Turnitin student information page,

• Always retain a copy of your assessment tasks (hard and soft copy)
• Ensure that you submit assessments on or before the due date. If your performance is affected by unexpected circumstances, you should consider applying for Special Consideration. Information on the process and application forms is available at;ID=ls0ydfokry9rz .
• When submitting any individual or group work for assessment at RMIT University you must complete, sign and submit a cover sheet in which sheet you declare that the work you are presenting for assessment is your own work. An assignment cover sheet is available on blackboard.
• Each page of your assessment should include a footer with your name, student number, the title of the assessment, unit code and title and page numbers. For example, Julie Macpherson, s324567, Task 2, ECON5049C Apply economic principles, Page 1 of 10.
Please note that to confirm your competency you may be questioned on any aspect of an assignment you submitted, either as an individual or as part of a group. In the case of a group assignment you may be questioned about any aspect of the assignment, even parts of it you may not have directly prepared.

Marking Guide (competency):

Vocational Education and Training (VET) is based on current industry needs and the focus on preparing you for the workplace. Because VET courses are informed by practical application of knowledge and skills, they are based on a system known as ‘competency based training’ (CBT). So when you are assessed in VET it is about whether you are competent to do the job, as well as having a firm grasp of the knowledge and skills required to do that job, as opposed to traditional curriculum based education settings that are often based on knowledge retention.

You need to demonstrate you are competent in each element of the unit of competency you are studying. While completing the assignment is a hurdle requirement for this course, your results will be primarliy based on the result of your test, not the assignment.

You will receive feedback on each assessment task that will state whether you are competent or not and how well you are performing. Once competent in all elements of the unit you receive a competency grading.

Please refer to the Final Grades table below.

Marking Guide (Grading)

After achieving competency we then grade your performance in the unit; this gives you the opportunity to have the level of your performance formally recognised against industry standards and employability skills.

The grading is according to the following criteria:

Demonstrates a high level of ability to complete all tasks independently as per the specifications, a high level of initiative in applying economic principles.

Demonstrates depth of understanding of the key concepts and knowledge required in applying economic principles.

Shows understanding of the kinds of problems that can arise in applying economic principles and how these may be addressed.

Demonstrates effective planning, manage and organise time through appropriately using a diary, submitting their assessments within deadlines.

Contribute constructively and clearly to relevant group and class discussions. Also demonstrating good techniques in collecting and providing information in order to appropriately applying economic principles. .

Final Grades Table:

CHD Competent with High Distinction
CDI Competent with Distinction
CC Competent with Credit
CAG Competency Achieved – Graded
NYC Not Yet Competent
DNS Did Not Submit for assessment

Further information regarding the application of the grading criteria will be provided by your teacher.

Assessment Matrix

Other Information

Late Submission Procedures
You are required to submit assessment items and/or ensure performance based assessment is completed by the due dates.
If you are prevented from submitting an assessment item on time, by circumstances outside your control, you may apply in advance to your teacher for an extension to the due date of up to seven calendar days.
More Information:
Form to use:
Where an extension of greater than seven days is needed, you must apply for special consideration. Applications for special consideration must be submitted no later than two working days after the assessment task deadline or scheduled examination.
More Information:;ID=g43abm17hc9w
Form to use:
Resubmissions (VET Programs):
If you are found to be Not Yet Competent in a Course Assessment Task you will be allowed one resubmission only. Your teacher will provide feedback regarding what you need to do to improve and will set a new deadline for the resubmission. The highest grade you will receive if your resubmission is successful is “CAG”.
If you are still not meeting the assessment requirements you must apply to your Program Manager in writing outlining the steps you will take to demonstrate competence in your course. Your submission will be considered by the Program Team and you will be advised of the outcome as soon as possible.
Adjustments to Assessment
In certain circumstances students may be eligible for an assessment adjustment. For more information about the circumstances under which the assessment arrangements might be granted please access the following website:
More Information:;ID=7usdbki1fjf31

Course Overview: Access Course Overview