Economics

Question 1

What is economic growth

Answer 1

An increase in the amount of goods and services produced in a population over a period of time.

Question 2

What is sustainable growth?

Answer 2

Sustainable growth development occurs when the economy grows at a pace which enables people to satisfy more of their material wants and increase their non-material well being while not compromising the living standards of future generations. 3-4% growth is aimed for each year.

Question 3

How to measure it?

Answer 3

By using GDP, defined as the total market value of all final goods and services produced in a country during a period of time (usually a year), Is used to measure economic growth.

Question 4

Issues of just using GDP to measure economic growth?

Answer 4

GDP does not measure economic activity that is paid for such a work done at home. GDP does not take into account any damage to the environment, GDP does not measure leisure time, failure to recognise income distribution, failure to consider value judgments.

Question 5

How is economic growth shown on a PPF model?

Answer 5

If the growth of an economy increases, then it will display a shift to the right on the PPF model.

Question 6

Why is 3-4% ideal in Australia

Answer 6

Under 3% will cause a increase in unemployment and jobs cannot be created and also there will be a lack in demand in the economy. Over 4% will result in high inflation, high demand for g&s leads to shortages, environmental problems can occur more frequently and resource depletion and pollution will rise.

Question 7

How improvements in GDP per capita is better for people:

Answer 7

The rise in the GDP per capita can allow people to satisfy their wants, it allows nation to produce more for consumers and allow people to have a higher living standard.

Question 8

What causes economic growth?

Answer 8

Economic growth is caused by the increase in productivity in an economy, the increase in the employment and the change in living standards, workers receive a higher income and the increase in production of G&S, increase in population and consumer behaviour and e.g: Job security and money savings.

Question 9

What causes chinas rapid economic growth?

Answer 9

Since China is a communist economy, the government decides how much to produce and what to produce, to reduce inflation. China since 1978 opened their foreign trade policy which caused China’s economy to rapidly grow throughout the years.

Question 10

Benefits of china’s economic growth?

Answer 10

China is now the first leading trade nation in the world, car ownership has soared to 300 million, China’s living standards increased, since 1978 the average life span moved from 66 to 76, education has increase to 95% since 2010, meat consumption has significantly increased.

Question 11

Costs of China’s economic growth?

Answer 11

Since there has been rapid growth, environmental depletion and pollution increased over the years, more demand for G&S has increased causing shortages. Frequent traffic around China due to cars, buses etc.

Question 12

Unemployed definition

Answer 12

Someone who is 15 years or older who are willing able to work but cannot find a job. Actively seeking for work.

Question 13

Current rates of unemployment?

Answer 13

The current unemployment rate in Australia is between 4-6%

Question 14

Why is youth employment higher than average?

Answer 14

Since firms look for more qualified people, the rise in youths looking for work has increased higher than the average employment rates.

Question 15

What is the labour force, Who is excluded?

Answer 15

The number of people who are employed or who are actively seeking a job. People who are not looking for work or are under the age of 15 are excluded from the labour force.

Question 16

What is the participation rate, how can we work it out?

Answer 16

The participation rate are the people who are 15 years or older who are in the labour force. To work out the participation rate you must: labour force divided by population 15+ x 100

Question 17

What is the unemployment rate, how do we work it out?

Answer 17

To work out the unemployment rate you must: unemployed divided by labour force x100

Question 18

What is hidden unemployment and underemployment?

Answer 18

Hidden employment refers to the proportion of people who have given up looking for a job as they believe they will not find or get a job. Underemployment refers to the proportion of people working part time but would like to work full time.

Question 19

Cyclical?

Answer 19

Occurs due to fluctuations in the level of economic activity. When there is a low level of spending in the economy the level of demand in the economy falls resulting in a reduction in production, as a result less workers are required to produce goods and services.

Question 20

Frictional?

Answer 20

Frictional Unemployment is short term and voluntary. This is the situation where a person is between jobs. When moving from one job to another it is possible that a person may go through a short period of unemployment.

Question 21

Structural?

Answer 21

Structural Unemployment occurs when there is a mismatch between skills and job vacancies. Structural Unemployment occurs partly as a result of improvements in technology, many jobs are lost as their functions are taken over by machines that can do the job more efficiently and cheaper.

Question 22

Seasonal?

Answer 22

Some workers are unemployed during particular seasons, mainly due to factors relating to climate that cause some workers to be out of work.

Question 23

Hard core?

Answer 23

These are people who have been out of work for 12 months and struggle to find jobs, possibly due to a lack of education, skills, age or because of personal problems.