economics and business

Question 1

Material Living Standards

Answer 1

Material living standards is the access to physical goods and services. People in Australia have a high material living standards due to us having access to food or services that allow us to fulfil our wants and needs

Question 2

Non-material living standards

Answer 2

Non-material living standards are factors that affect a person’s quality of life irrespective of income. Includes things that may contribute to our happiness, such as freedom, low crime rates, access to facilities.

Question 3

Gini coefficient

Answer 3

Using the Lorenz curve, the ABS calculate the Gini coefficient (a number between 0.00 and 1.00). Inequality on the Gini scale is measured between 0, where everybody is equal, and 1, where all the country’s income is earned by a single person.

Question 4

Progressive taxation

Answer 4

Income tax where those on higher incomes are taxed at a higher rate than those on lower incomes.

Question 5

Cyclical UE

Answer 5

• usually 1-12 months
• occurs when the level of spending falls
• consumers / businesses tend to save rather than spend as they are feeling less confident about the economy
• This leads to a decrease in spending on G and S and then a decrease in production of G and S
• This then leads to less need for labour or workers, so UE increases

Question 6

Structural UE

Answer 6

• usually 12 + months
• Structural UE occurs as a result of changes in the way G and S are produced
• Occurs when production methods change and there is a mismatch of skills
• Structural UE occurs due to technological change e.g. bank tellers due to on line banking or factory workers due to robots
• Structural UE can also occur due to outsourcing. This is when one section or department of a business (usually customer service) is performed overseas with overseas workers instead of domestic workers.

Question 7

Frictional UE

Answer 7

• less than 1 month
• Frictional UE occurs when people are unemployed between finishing one job and starting another
• This is common in the building trades
• Can also be when people move in and out of the labour force e.g. school leavers / university grads looking for work

Question 8

Seasonal UE

Answer 8

• Seasonal UE occurs due to the ending of jobs at the same time each year due to the seasons.
• Common examples include fruit picking, tourism jobs, working in ski fields and sheep shearing.

Question 9

Underemployment:

Answer 9

When people are employed but would like to work more hours

Question 10

Hidden UE

Answer 10

occurs when people are not officially counted as unemployed but have given up looking for work but would still like to work