Economics & Business

Question 1

Explain how the Australian Government measures ‘Economic Growth’

Answer 1

Economic Growth Rate is the percentage change of GDP from one year to the next, it is measured through the total production of goods and service within an economy known as GDP.

Question 2

Explain how the Australian Government measures ‘Inflation’

Answer 2

Inflation rate is the rate of increase in prices in a given amount of time. It is typically measured through Consumer Price Index (CPI) which is the percentage change of goods and services consumed by households.

Question 3

Explain how the Australian Government measures ‘Unemployment’

Answer 3

Unemployment rate is the percentage of the labour force that is currently unemployed.

Question 4

Define ‘Gross Domestic Product’ (GDP)

Answer 4

The total market value of all goods and services produced in an economy within a year.

Question 5

Explain why GDP is often seen as an insufficient way as a measure of economic well-being

Answer 5

GDP is seen as an insufficient way to measure economic development as it excludes non-market transactions such as household and underground production.

Question 6

Describe the difference between the 2 types of GDP - Nominal and Real

Answer 6

Real GDP measures output for inflation, showing actual growth or contraction, it is vital for long-term trends and accurate comparisons.
Nominal GDP measures at current market prices, it is valuable for short-term analysis and budget alignment.

Question 7

Define ‘Inflation’

Answer 7

In economics, inflation is a general increase on price and the value of money falls. When inflation is low, it is difficult for workers to obtain wages. When inflation is high, it reduces the country’s competitiveness.

Question 8

How do we measure ‘Inflation Rate’

Answer 8

Inflation rate is measured through ‘Consumer Price Index’ (CPI) which measures the percentage change in the price of goods and services consumed by households.

Question 9

Define ‘Human Development Index’ (HDI)

Answer 9

Human Development Index is a statistical measure of expected lifespan, education, and the average income within a country. The higher the HDI, the higher the standard of living.

Question 10

Define ‘Better Life Index’

Answer 10

Better Life Index allows you to compare wellbeing across countries. The index looks at 11 different measures of wellbeing including the GDP per person, job security, air quality, and work-life balance.

Question 11

Define ‘Sustainability Indexes’

Answer 11

Sustainability Indexes measures business’ sustainability across environmental and social factors such as air quality, access to clean water, and biodiversity.

Question 12

Describe the impact on Inflation and Unemployment when economic activity decreases.

Answer 12

When economic activity decreases, firms start dismissing their workers and refrain from pushing up prices this means the main indicator, unemployment rises and inflation falls in times of recession.

Question 13

Describe the impact on Inflation and Unemployment when economic activity increases.

Answer 13

When economic activity increases, usually its a strong growth in GDP and employment which leads to the unemployment rate declining and inflation rising.

Question 14

Define ‘Price’

Answer 14

Price is the amount of money required in order to purchase a good or service.

Question 15

Define ‘Price Elastic’

Answer 15

‘Price Elastic’ are products that fall in demand due to an increase on the price, typically having substitute availability.

Question 16

Define ‘Price Inelastic’

Answer 16

‘Price Inelastic’ refers to products whose consumers demands remain the same after an increase or decrease on the price.

Question 17

Define ‘Law of Demand’

Answer 17

The Law of Demand is the fundamental principle stating the inverse relationship between price and the quantity demanded.

Question 18

Identify and Explain some of the factors that influence consumers when they are making purchasing decisions

Answer 18

1. Price
   Price influences the perceived value of a product, a product with lower price compared to its substitutes can make consumers feel like they are getting good value.
2. Finance
   Consumers may not have the money required to purchase a good or service. However, if other options such as credit or afterpay consumers are more likely to purchase.
3. Consumer Preference
   Through personal taste

Question 19

Explain why there is a negative relationship between price and quantity demanded of goods and services.

Answer 19

There is a negative relationship between price and quantity demanded as it is the consumers logic and behaviour in response to the price changes.

Question 20

Define ‘Productivity’

Answer 20

Productivity is the amount of output that can be produced through a given amount of input.

Question 21

Define ‘Capital’

Answer 21

Capital are financial and physical assets used to produce value within an economy.

Question 22

Define ‘Capital Investment’

Answer 22

Capital Investment is the process of investing financial and physical assets for long term benefits and improve productivity.

Question 23

Define ‘Inventory’

Answer 23

Inventory refers to the assets, materials, and goods held by a business for market selling or production use.

Question 24

Discuss the benefits of a business improving their productivity

Answer 24

Through improving productivity, it allows businesses to produce more goods and services resulting in economic growth, financial stability, and employee satisfaction.

Question 25

Examine the benefits for a business undertaking in-service training such as further study for formal qualifications

Answer 25

When an employee undertakes in-service training it benefits the business through an increase in productivity, employee motivation, and consumer satisfaction.

Question 26

Define ‘Research and Development’

Answer 26

Research and Development is when businesses gather knowledge to create new products or improve existing products and services.

Question 27

Define ‘Expanding Market Share’

Answer 27

Expanding Market Share allows companies to achieve a larger scale than its competitors to increase share within the industry.

Question 28

Define ‘Mergers and Acquisitions’

Answer 28

‘Mergers’ refer to two separate entitles combining forces to create a new, joint organisation. ‘Acquisitions’ refers to one taking a proportion or all of another’s company shares and assets.

Question 29

Describe the benefits of researching new product and technology

Answer 29

When a business researches new products and technology , it allows them to differentiate from competitors while appealing to consumers.

Question 30

Explain how a business can expand its market share

Answer 30

There are a variety of ways businesses can expand their market share such as pricing goods and services efficiently, improving innovations, and employing a dedicated, talented workforce.

Question 31

Define ‘Standard of Living’

Answer 31

Standard of Living is the quantity and quality of goods and service available to a given population.

Question 32

Define ‘Foreign Investment’

Answer 32

Foreign Investment refers to a domestic investor choosing to purchase ownership within a foreign country.

Question 33

Define ‘Employment Patterns’

Answer 33

Employment Patterns refers to the trends and characteristics in labour market to show how employment is distributed and changes over time.

Question 34

Discuss the role that economic productivity has in improving a nations standard of living

Answer 34

Generally, the higher the productivity, the higher the standard of living which means individuals get their wants faster, supply and productivity increase while real prices decrease and real wages increase.

Question 35

Explain why productivity is the most significant factor in influencing a nations standard of living

Answer 35

The level of productivity is the most significant factor in influencing a nations standard of living as maintains economic welfare and contributes to the increase on wages.