Economics

Question 1

legal tender

Answer 1

a payment allowed by the law or recognized by the legal system to be valid for meeting financial obligations

Question 2

characteristics of money

Answer 2

• portable: easy to move around and exchange with other currencies
• durable: able to withstand wear and tear
• relative scarcity: its not easy to get, ensures that money has its value
• difficult to counterfeit: unable to be forged or imitated
• divisible: able to be broken down into smaller values

Question 3

the functions of money

Answer 3

• a medium of exchange: money is readily accepted to trade for goods and services
• a unit of account: allows for price to be placed on goods and services using an established rate of exchange
• a store of value: money can be saved without it losing value
• a standard differed payment: money can be used as credit.

Question 4

investment

Answer 4

any mechanism used for the purpose of generating future income with the key aim of ‘growing’ your money

Question 5

credit

Answer 5

• a supply of money now in return for the promise of paying back later
• therefore allows for you to access your desired goods/services immediately with payment postponed.

Question 6

bugeting

Answer 6

the process of creating a plan for how you’ll spend your money

Question 7

economy

Answer 7

the larger set of inter-related production, consumption, and exchange activities that aid in determining how scarce resouces are allocated in a country for a short period of time.

Question 8

economics

Answer 8

the study of how economies and societies best satisfy their populations’ needs and wants through the allocation of scarce resources

Question 9

Microeconomics vs macroeconomics

Answer 9

• microeconomics: the study of individuals and business decisions
• macroeconomics: the study of decisions made by countries and governments

Question 10

Fundamental economic problem

Answer 10

• relative scarcity: individuals and groups cannot satisfy their unlimited wants (and needs) using the limited resources available to them -> this occurs because DEMAND (unlimited needs and wants) outweigh SUPPLIES available (limited resources)

Question 11

what does the theory of consumerism state?

Answer 11

• Increasing consumption of goods is economically desirable
• consumers have a naturally increasing inclination towards the purchase of goods and services.

Question 12

opportunity cost

Answer 12

• the second best option or alternative option which you gave up
• the option you gave up in order to have the option you considered the most desirable.

Question 13

cost-benefit analysis

Answer 13

a systematic approach to estimating the strengths and weaknesses of alternatives used to make a decision with the highest benefit to an individual

Question 14

factors that influence Demand

Answer 14

• consumers: impact demand through the consumption of goods and services.
• producers: impact demand because in order to produce goods and services, they must buy the resources

Question 15

Law of Demand

Answer 15

when prices increase, less consumers are willing to purchase

Question 16

Law of Supply

Answer 16

when prices increase, more producers are willing to sell in the market

Question 17

economic resources that influence ability to supply

Answer 17

• natural land: raw material that’s unprocessed (plants, animals, water, minerals)
• labour: physical skill required to produce the goods and services
• capital: the human-made resources used in manufacturing goods and services
  -management/entrepreneurship

Question 18

who is an entrepreneur?

Answer 18

• who is willing to seize opportunities to start and opperate a business
• who on risks in hopes for profit

Question 19

entrepreneurial characteristics

Answer 19

• highly motivated
• risk takers
• critical and creative
• financial and digital literacy
• strong communicators, planners, and leaders

Question 20

what does it mean for a good or service to be innovative

Answer 20

Has to be something completely different or be a significantly improved version of an existing good or service

Question 21

what links exist between entrepreneurial behaviour and economics?

Answer 21

an entrepreneur’s behaviour may increase a business’s success. this success will increase the business’s revenue. the revenue would be shared with the Australian economy via:
- taxation system
- that revenue being spent on the Australian economy
with growing success over time. the business will expand, thus employee numbers would increase. employees contribute to the Australian economy via:
- taxation system
- them spending their salary in the Australian economy.

Question 22

stakeholders.

Answer 22

people or groups who have a vested interest in the business’s activities and performance

Question 23

internal & external stakeholders

Answer 23

• internal stakeholders: found in the business’s internal environment, such as owners and employees, manager
• external stakeholders: found in the business’s external environment, such as customers and suppliers, competitors, government

Question 24

competitive advantage

Answer 24

is something that sets a business apart from its competition, and this makes consumers want to choose the business’s goods and/or services over these of their competitors.

Question 25

How does a business create competitive advantage?

Answer 25

• innovation
• an increase in productivity
• “filling gaps in the market”
• increasing advertising and marketing
• investing money into research and development

Question 26

why do businesses seek competitive advantage?

Answer 26

to stay in business and increase profits

Question 27

what is inflation?

Answer 27

• the average rise in the price of goods and services over a period of time
• it can ve a good metric to measure economic growth
• a governments goal is generally to maintain inflation within 2-3% to control cost of living
• March 9th 2023, inflation was up to 7.8% representing an increase to previous years
• petrol prices

Question 28

What is unemployment rates?

Answer 28

• the percentage of a population willing and able to work but and activly seeking but unable to find employment
• it’s a goal for governments to ensure all able bodies have work

Question 29

inflation is rising… why? what does it mean to you?

Answer 29

inflation is high in 2022-2023 due to a number of reasons:
- distruptions in global supply chains
- pent up consumer demands for goods and services
- invasion of russia in Ukraine
if inflation rises more than wage increases, this will mean an increase in the cost of living for everyday australians