Economic Preformace & Standard Of Living

Question 1

Definition of — Economics

Answer 1

Explores how individuals, groups, businesses and governments interact with each other in markets.

It focuses on how resources are allocated to satisfy needs and wants.

Question 2

Definition of — Business

Answer 2

Explores how producers interact with consumers by providing goods and services that meet their needs and wants.

It focuses on the skills that contribute to the business success.

Question 3

Definition of — Standard of living

Answer 3

Refers to the level of material comfort individuals, groups or nations enjoy. Living standards are often measured by the size of income and wealth of the individuals, groups or nations.

Question 4

What is the Overseas sector

Answer 4

• relies on trade with other economies to help boost national income and also gain access to a wider range of products
• Australian producers sell goods and services to global economies as EXPORTS (X)
• Australian consumers buy goods and services from overseas producers as IMPORTS (M)

Question 5

What are the corresponding names for these letters;

Y=
O=
C=
S=
T=
I=
G=
M=
X=

Answer 5

• Income and wages
• Outputs (Goods and Services)
• Consumption spendings
• Savings
• Taxation
• investments
• Government spending
• Imports (payment)
• Export (incomes)

Question 6

What is a Peak(BOOM)

Answer 6

A peak or boom is characterised by full employment and inflationary pressures due to the level of demand (expenditures) being in excess of supply

Question 7

What is a Contraction ( Downswing )

Answer 7

Is characterised by rising unemployment, declining inflationary pressure and low business and
consumer confidence

Is when the whole economy begins to slow down

Question 8

What is a Trough (recession)

Answer 8

Lowest levels of income and output

Unemployment it is at its highest levels

Consumption demand and cells are at the lowest levels

Question 9

What is a Recovery (upswing)

Answer 9

Rising economic activities including income, output and employment

Consumer demand rises and sales increase

Question 10

What are LEADING indicators

Answer 10

Leading means future

• Dwelling approvals
• Housing loan application
• property prices
• GDP growth rates

Question 11

What is a Coincident Indicator

Answer 11

Current indicator

• retail sales
• new motor vehicle sales
• job advertisement

Question 12

What is a lagging indicator ?

Answer 12

Past (lagging behind)

• unemployment rates
• inflation rates (consumer price index/CPI)
• business investment

Question 13

Recommend GDP Growth Rates

Answer 13

Sustainable rates between — 3.5% and 4.5%

Question 14

Recommended Dwelling Approvals rates

Answer 14

Indicator that the economy is growing

No greater or less than 1%

Question 15

Recommend Retail sale Rates

Answer 15

Indicates the level of demand in the economy

Question 16

Economic Growth

Answer 16

The most widely and used indicator of economic performance

A sustained increase in the productive capacity of an economy usually indicated by the increased availability of goods and services

Question 17

Measuring living standards

Answer 17

Living standards refer to the level of material comfort individuals, groups or nations enjoy/have.

Living standards are often measured by the size of income and wealth of individuals, groups and nations

Question 18

Lorenz Curve

Answer 18

Measures relative living standards within a nation. It is a graph that depicts the level of inequality in the nation

• The greater the curve from the diagonal line and the greater the degree of inequality
• The small the curve from the diagonal line this more than degree of inequality

Question 19

Gini coefficient (value)

Answer 19

• measures relative living standards within a nation using a numerical value to measure inequality

•is measured on a scale between 0-1
0= perfect equality
1= perfect inequality

Smaller = more even distribution