Economic Indicators Flashcards
What are the three economic problems
- What are how much to produce
- How to produce
- How to distribute
What does (what and how much to produce mean?
What goods and services are to be produced and in what quantities
What does (how to produce) mean ?
How are these goods and services to be produced
What does (how to distribute) mean?
Who will receive and consume these goods and services?
What prices will be set
What is ‘The Market’
Private enterprise economy
What is economic freedom
- Entrepreneurs are free to produce almost any good they want
- Wage earners are free to select any employment that they wish
- consumers are free to spend and save as they wish
What is consumer sovereignty
The desire and needs of consumers control the output of producers
Do we have complete economic freedom in Australia
No
What is economic management
Government intervention / management
What are the 6 government objectives
- Sustainable economic growth
- Internal stability
A. Price stability
B. Full employment - External stability
- High standard of living
- Ecological sustainable development
- Equitable distribution of income and wealth
What are economic indicators
Indicators that tell us all about different sectors of the economy
What is the first key indicator
GDP (and economic growth)
What is economic growth
An increase in the size of a country’s economy over a period of time
What is GDP
The total production of goods and services in the economy, which is called gross domestic product
What is nominal economic growth
Increase in the dollar value of production over time. This includes changes in both the volume of production and the prices of goods and services produced
What is real economic growth
Increase in the volume produced
Better reflects how a country is producing at a given time, compared with other points in time
How is gdp measured
GDP = C + G + I + NX
C = consumption
G = government spending
I = investment
NX = net exports
What is aggregate demand
- Size of the economy
- total demand in the economy
Aggregate demand = GDP
What is the second key indicator
Unemployment
What is unemployment
Persons 15 or above, not employed, but actively seeking work
What are the 4 types of unemployment
- frictional
- cyclical
- seasonal
- structural
What is the third key indicator
Inflation
What is inflation
An increase in the prices of the goods and services that households buy.
How is inflation measured
- consumer price index
- measured the changes in prices of a typical basket of goods and services consumed by households
