The unit covers the explanations of Australia's economic problems provided by economists so that appropriate solutions can be appraised. The role of monetary and fiscal policy and structural reform in resolving these problems is the prime focus of the unit.

Problems addressed include: sustaining economic growth and reducing unemployment while maintaining a low inflation rate and reducing Australia's foreign debt. An understanding of macroeconomics is promoted by studying Australia's macroeconomic performance and by analysing the impact on business of volatility in key macroeconomic variables such as interest rates, the exchange rate and inflation.