1. Money and man kind ECONOMICS TUTORIAL ONE
Surf Coast Secondary Year

2. Learning Intention
To understand the difference between macro and micro economics.
To be able to identify the main types of personal investments
To become more aware of how money makes the world go around.
To understand how banks make their money.

3. MICROECONOMICS VS MACROECONOMICS
Ask students what they think the difference maybe? How have they come up with this?
Hopefully somebody will say they know micro is small and macro is big - but if not it isn’t a big deal as explained on next slides

4. MICROECONOMICS versus MACROECONOMICS
The study of individuals, households and firms' behavior in decision making and allocation of resources. Description - Microeconomic study deals with what choices people make, what factors influence their choices and how their decisions affect the goods markets by affecting the price, the supply and demand.
Click word microeconomics will come up - ask students again what they might think the word means before clicking and the definition coming up.
Good answer - “small” decisions about allocation of resources (individual, business or singular industry)

5. MICROECONOMICS versus MACROECONOMICS
Macroeconomics studies the behavior and performance of an economy as a whole. It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation. Description - Macroeconomics analyzes all aggregate indicators and the microeconomic factors that influence the economy. Government and corporations use macroeconomic models to help in formulating of economic policies and strategies.
Importance is that we are no longer looking at individual decisions, but how the whole economy works and impacts on the nation. GDP is an important concept we will revisit, particularly what can impact it (see formula below)
Gross Domestic Product is the sum of all spending on goods and services in a nation's economy in a year.
The formula for GDP is: GDP = C + I + G + (Ex - Im), where “C” equals spending by consumers, “I” equals investment by businesses, “G” equals government spending and “(Ex - Im)” equals net exports, that is, the value of exports minus imports. Net exports may be negative.
A good example if you need it is to look at the disintegration of the Greek GDP. Little investment because rating is so bad (I), government spending down (G) because no one will lend them more money, spending down (C) and already really bad net exports (Ex - Im).

6. Ask selected students about the difference between, or an example.

7. TASK 1 - COMPARING MICRO AND MACRO ECONOMICS (20 MINUTES)
You need to make an information text explaining the difference between micro- and macro- economics.
Within this text there must be an example of how they are both used by individuals or economies (countries).
Hint: An information text could be a poster, infographic, tutorial, movie trailer etc… It could be electronic, it might be handwritten.
This is not meant to be a huge task - 20 mins top so if they are doing movie trailer need to do quickly or complete for homework. This is a part of the task cards for stage 1.

8. FOCUS STAGE 1
MICROECONOMICS and
PERSONAL FINANCE

9. TUNE IN : MONEY MAKES THE WORLD GO ROUND

10. How can you make money? BRAINSTORM
What are different ways that you could make money?
You need to think about more than selling different products!
Brainstorm on whiteboard
Working (salary, commission)
Selling (lots of different things)
Investing in shares
Owning property
Having money in bank and getting interest
Loaning money to other people
Buying something that will appreciate (increase in value) over time
Games of probability/chance (if they don’t mention this one all good)
Lots of others

11. What are the 4 main types of investments for your money?
Cash
Physical cash, Savings accounts
Fixed Interest
Term Deposits, Government and corporate bonds
Shares
A unit of ownership in a company
Property
Residential, Commercial, Retail, Industrial
TASK 2 (ANSWER IN YOUR BOOKS) - WHy would you invest your money in different ways and not just leave it in the bank? If you had $ , what PERCENTAGE (%) of each investment type would you have? Why?
Cash and fixed interest are both defined as defensive assets - why?
Defensive investments focus on generating regular income, as opposed to growing in value over time.
Shares and property are both defined as growth assets - why?
Growth investments aim to increase in value over time, as well as potentially paying out income. Because their prices can rise and fall significantly, growth investments may deliver higher returns than defensive investments. However, you also have a stronger chance of losing money. (INCREASED RISK)
Answer to question in book needs to reflect their individual view of risk - it is a good discussion to have about students who are more risk averse than others. Who would do better when the stock market is high, who would do well if the stock market crashed?

12. What makes shares more “risky” than cash
What makes shares more “risky” than cash? Are some shares more “risky” than others?
Knowing which investments are more risky, would you change your mind about where you invested your money.

13. BANKING AND BANKS
Most cash assets in Australia are held by the BIG 4 banks (NAB, CBA, ANZ, WBC).
These banks make A LOT of money by holding our money, how do they do it?
Before going on to next slide and showing video, students work in pairs to answer the following questions.
Name as many institutions you could put your money in and then transact day/day?
Bendigo, St George, Bank of Melb. etc...
Why do we use banks and not just keep our money under the mattress?
Are their other financial institutions that are not “banks”?
Yes - mutual banks, credit unions
What do banks do with our money when we give it to them?
Various answers - go to next page and show video explanation with this one

14. Link to video
How banks make money?

15. TASK 3: BANKING AND INVESTMENTS
Answer the following questions in full sentences in your book.
Why do people use banks?
How do banks make money from their customers?
Research how much interest is charged on a credit card with one of the big 4 banks. Research what interest is paid on their savings accounts. What is the difference between these two rates?
Why if credit cards charge high interest do people use them?
EXTENSION: Imagine you have $1 million dollars, research which of the big 4 banks you would put your money in. Make sure you explain why you made this decision.