Commerce definitions Flashcards
What is economic growth?
An increase in the size of a country’s economy over a period of time.
What is unemployment?
Refers when someone is willing and able to work but does not have a job.
What is inflation?
When the price of goods and services increases over a period of time.
How is economic growth measured
GDP (gross domestic product)
How is inflation measured?
CPI (consumer price index)
What is a recession
When the level of economic activity is at its lowest.
What is a contraction?
When the level of economic activity is decreasing.
What is a peak/boom?
When the level of economic activity is at its highest.
What is an expansion?
When the level of economic activity is increasing.
What is GDP?
The total value of all goods and services produced in a country during a specific period of time.
What is CPI?
Measures how prices of everyday goods and services increase or decrease (it helps measure inflation).
What is aggregate demand?
The total level of spending in an economy
What is the equation for aggregate demand?
AD= C + I + G + (X - M)
What are the 5 sectors in the circular flow of income?
Household
Firms
Financial
Government Spending
Overseas
What is the cost-push factor?
When production costs increase (causing businesses to raise prices of G+S.
What is the demand-pull factor?
When the demand for G+S is more than the supply
What is the overseas factor?
When higher prices overseas cause prices to increase in Australia.
