economics. Flashcards
economic problem.
having unlimited needs and wants, but limited resources to satisfy them.
scarcity.
the economic problem of having unlimited needs and wants, but limited resources to satisfy them.
opportunity cost.
the next best alternative given up whenever a choice is made.
factors of production.
capital, enterprise, land, and labour.
interdependence.
the mutual dependence between partners in an economy; that is, the reliance of consumers, workers, businesses, and governments on each other.
the 3 economic questions.
- what to produce
- how to produce, and
- who to produce it for.
subsistence economy.
an economy directed in subsistence concerning the provision of food, clothing, and shelter, rather than to a market.
planned economy.
a type of economic system where investment, production, and the allocation of capital goods takes place according to economy-wide economic plans and production plans.
market economy.
a system in which production of goods and services is determined by supply and demand.
mixed economy.
an economic system that combines elements of a market economy and planned economy that accepts private property, freedom, self-interest, competition, and minimum government intervention.
gdp.
stands for gross domestic product, is the value for all goods and services produced within a country in a given period, usually discussed in terms of gdp per capita (total gdp divided by the total population of the country).
recession.
a technical term referring to two consecutive quarters of negative growth in an economy.
cyclical unemployment.
overall unemployment resulting directly from the business cycle’s downturn.
structural unemployment.
overall unemployment from when the economy is getting out of lower points of the business cycle, when innovation replaces employment, and is referred to as long-term unemployment.
frictional unemployment
is the result of workers searching for new employment or transitioning from their old jobs to new ones.
cpi
the consumer price index is a measure of the average change over time in the prices paid by consumers for a representative basket of consumer goods and services.
demand inflation
price increases that result from an excess of demand over supply for the economy as a whole
cost inflation
a sustained increase in the price of goods and services caused by producers passing on increased production costs to consumers.
material living standards
refers to the number of goods and services we can afford to buy.
non-material living standards
value-based elements of human wellbeing that are not connected to material possessions.
gdp per capita
the sum of gross value added by all resident producers in the economy plus any product taxes (less subsidies) not included in the valuation of output, divided by mid-year population.
gini coefficient
statistical measurement of economic inequality in a population.
hdi
human development index, measures the standard of living and wellbeing by measuring life expectancy, education, and income.
quality of life index
the measure of the quality of life or wellbeing of a country based on basic literacy rate, infant mortality, and life expectancy at age one.
fiscal policy
a macroeconomic or aggregate demand management strategy involving the government’s estimates of the expected value of its receipts and the expected value of its outlays.
monetary policy
a major category of government aggregate demand management or macroeconomic policy. it is implemented by the rba and is designed to influence the cost, availability, and demand for credit and money.
rba
the reserve bank of australia.
taxation
a government levy or revenue measure that can be used as part of the budget to affect the level of prices, the growth rate, and the distribution of income.
interest rates
the term used to describe the cost of borrowing money or the return of the owner of the funds which are invested or lent out.
trade liberalisation
the removal or reduction of restrictions on the free exchange of goods between nations.
labour market reforms
critical policy aimed at increasing the efficiency and flexibility of the labour market
market regulation
the reduction or elimination of government power in an industry.
