business and economics (chapter 3 - 5) Flashcards
How can high levels of unemployment impact the Australian economy?
When there are not enough workers, the price of everyday expenses and necessities will go up. Everything from groceries to building supplies. The demand for these things will never change, yet the supply will be lower due to high unemployment in these fields.
Explain the Consumer Price Index (CPI)
The CPI is measured by calculating the average percentage/change in prices paid by consumers for goods and services over time.
How is inflation measured in Australia?
The inflation is measured by the Consumer Price Index. That tracks the change of prices in goods and services.
Frictional unemployment:
When it takes time to transition from one job to another job.
Cyclical unemployment:
When the whole economy is in a period of downturn or economics recession, the demand of goods and services fall.
Structural unemployment:
When workers are available but do not have the skills nor experience required for the job that is available.
Seasonal unemployment:
The demand for certain types of employees changes according to the season (gumbuya world, fruit pickers).
What is an interest rate?
Interest rates can be the cost of borrowing money or money being received for depositing money into a savings account. In Australia, interest rates have been increasing.
What is the business cycle?
It is a level of economic activity that changes through different periods of growth. Could change due to excessive spending or decrease in sales.
What are the 4 stages of the business cycle?
Peak = increase
Trough = decrease
Expansion = the rise of increasing
Contraction = the fall of decreasing
How do you measure living standards?
You can measure that through rates of economic growth, income per person and the amount of goods and services consumed by a country.
The relationship between living standards and economic performance:
The more income you make = more access to goods and service which then increases your living standards.
Less income you make = less access to goods and services meaning a lower living standard.
Employment rates:
People have more disposable income to buy goods and services that they need and want. Can afford housing, don’t have to rely on government for social security.
What is a Gross Domestic Product (GDP)?
GDP is a measure that shows the total value of goods and services made in a country.
Methods to measure living standards:
Where to be born index
The better life index
Happy plant index
Human development index
