S4 | S5 | S6

S6 Economics Subject Structure
Cycle No.	Contents / Key Points
1 -2	1.      Money & Banking -          Barter -          Money -          Banking -          Hong Kong as a financial centre
3 – 4	2. Money supply and money creation -          The issue of notes and coins in Hong Kong -          Money supply -          Money creation -          The process of money contraction
5 – 6	3. Money demand and money market equilibrium -          Factors affecting the allocation of wealth -          Cost of holding money -          Demand for money -          Money market equilibrium and determination of equilibrium nominal interest rate
7	4.   Monetary policy and quantity theory of money -   Monetary policy -   Quantity theory of money
8 – 9	5.         International Trade (I) – free trade and principle of comparative advantage -          Absolute advantage and comparative advantage -          The principle of comparative advantage -          Distribution of gains from specialization and trade -          The presence of transport costs and transaction costs -          Other reasons for international trade
9 – 11	6.         International Trade (II) – trade barriers and external trade of Hong Kong -          Free trade vs restricted trade -          Types of trade barriers -          Effects of tariffs and quotas on a small economy -          External trade in Hong Kong
X’mas holidays	7.         International finance – exchange rate and balance of Payments -          Exchange rate -          Effects of change in exchange rates on international Trade -          The linked exchange rate system in Hong Kong -          The balance of payments account
X’mas Holidays + 12	8. Extension of Trade Theory, Economic Growth and Development (elective part) -          Illustration of comparative costs and gains from trade with the aid of production possibilities frontier -          Comparative advantage and its relation to Globalization -          Measurement of economic growth and development -          Factors affecting growth of an economy -          The desirability and costs of economic growth -          International / regional comparison