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Economics > AOS 1 - Economic growth, Long-term economic prosperity and Environmental sustainability > Flashcards

AOS 1 - Economic growth, Long-term economic prosperity and Environmental sustainability Flashcards

1
Q

Aggregate demand

A

Total expenditure on the goods/services produced in the economy over a period of time

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2
Q

Components of aggregate demand

A 
AD=C+I+G+X-M
C= consumption expenditure 
I= private investment expenditure 
G= government expenditure 
X= exports
M= imports
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3
Q

Aggregate supply

A

The total volume of goods/services that producers are prepared to supply to the market

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4
Q

Trade-offs

A

Foregoing the opportunity to gain something of value with our time and/or money once we use it on some other activity

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5
Q

Real GDP

A

The statistical measure of production without the influence of inflation or deflation of price. (Yr 1 price ✖️Yr 2 quantity)

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6
Q

Real GDP per capita

A

Is a material living standard measurement that shows the GDP per person. (GDP ➗Population)

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7
Q

Material living standards

A

The aggregate welfare of the population measured in terms of monetary access to goods/services

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8
Q

Non-material living standards

A

The aggregate welfare of the population measured by aspects of quality of life that cannot be measured by monetary factors

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9
Q

The economic benefits of economic growth

A

Growth in living standards, employment opportunities and economic development

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10
Q

Limitation of using GDP per capita to measure living standards

A
  • excludes non-marketed and home based goods/services
  • excludes quality of goods/services
  • excludes the environment
  • based on estimates
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11
Q

AD/AS factors

A 
Consumer confidence= AD
Business confidence= AD
Interest rates = AD/AS
Economic growth overseas= AD
Disposable income= AD
Exchange rates= AD/AS
The terms of trade= AD
Productivity= AS
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12
Q

The Labour force

A

All people aged 15+ who are willing and able to work, it includes the employed and unemployed

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13
Q

The Labour force participation rate

A

Is the ratio of the labour force relative to the size of the working age population

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14
Q

The ageing population

A

The median age is increasing meaning that more of the population are too old to work and the labour force participation rate is decreasing

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15
Q

Budgetary policy

A

An injection or extraction of money into the economy to manipulate economic growth

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16
Q

Monetary policy

A

The manipulation of key financial variables primarily interest rates by the RBA in order to achieve economic goals

17
Q

Aggregate supply polices

A

Any government initiative that is designed to reduce the costs of production and/or improve supply conditions for businesses

18
Q

Economic prosperity

A

Primary focuses on the national improvement of incomes, this then enables Australians to accumulate wealth and afford a more prosperous lifestyle

19
Q

Environmental sustainability

A

The perseveration of our natural environment into the future by ensuring that current practises don’t contribute to environmental harm and depletion of our natural resources

20
Q

Sustainable development

A

The development of a nation at a pace that doesn’t erode the ability for future generations to enjoy the same quality of life

21
Q

Climate change

A

Unstable changes to the earths climate as a result of excessive use of carbon and other green house gas emissions to produce goods/services

22
Q

Deterioration of common access resources

A

Natural resources like fisheries, forests and clean air, which are likely to be exploited and degraded overtime unless the government intervenes to safeguard them for long term use

23
Q

Depletion of natural resources

A

The consumption of resources faster than they can be replenished. If this isn’t minimise it will lead to unsustainable development

24
Q

Economic growth vs Environmental sustainability

A

Given that economic growth requires the use of resources there is an unavoidable trade-off. The more governments/businesses pursue economic growth the more the environment suffers and vice versa. However, new methods such as renewable energy are allowing economic growth to be compatible with environmental sustainability

25
Q

Alternative measures of living standards

A

Genuine progress indicator (GPI): takes into consideration the social costs associated with expenditure of goods/services

Measures of Australia’s progress (MAP): focuses on the overall changes in the domains of society, economic, environment and governance

Human development index (HDI): measures living standards (gross national income), health (life expectancy) and education (average years of schooling + minimum expected schooling) scaled from 0.00 to 1.00

26
Q

Market based approaches

A

Governments provide financial incentives to businesses and consumers to encourage methods that consider the impact on the environment. These incentives can be positive such as subsidies and rebates or negative such as taxes and fines

27
Q

Regulations and Legislation

A

The environmental protection and biodiversity conservation act (EPBC) protects flora, fauna, ecological communities and heritage places. This act ensures that prior to any development the environmental impact is assessed

28
Q

Emissions Trading Scheme

A

Involves a government determining a limit of carbon emissions it will tolerate in the economy. Businesses must have a permit to release carbon emissions into the atmosphere and these permits can be sold to other businesses

29
Q

Carbon Tax

A

Requires businesses to pay a set amount of tax for carbon released into the atmosphere when producing goods/services

30
Q

Direct actions

A

Involve governments investing directly in projects which are designed to achieve environmental outcomes

31
Q

National Landcare Programme (NLP)

A

Promotes biodiversity conservation, environmental rehabilitation, sustainable agriculture and tackling feral animals/weeds

32
Q

Leakage

A

Occurs when some of the income earned is redirected away from expenditure in the form of savings, taxes and imports

33
Q

Injections

A

Occur when some of the income earned is directed back to expenditure in the form of private investment, government spending and exports

34
Q

Economic growth

A

An increase in the amount or level of national production that has occurred over a period of time. Most commonly measured by change in real GDP

35
Q

Environmental impact studies

A

Studies that seek to weigh up the costs and benefits of any proposal in terms of the impact on the environment

36
Q

The economic costs of economic growth

A

Inflation: excessive demand for the nations resources (labour/raw materials) leads to higher prices

Wealth effect: ^shares and property prices leads to less saving and more spending and excessive demand on resources

Financial instability: ^borrowing and debt

Net foreign debt: ^debt to other countries

Economics (4 decks)

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