Economics vocabulary

Question 1

Barter

Answer 1

The swapping/exchanging of goods and services

Question 2

Biodiversity

Answer 2

Plant/animal variety in a habitat

Question 3

Business Cycle

Answer 3

Cyclical fluctuations in the level of economic activity

Question 4

Consumption

Answer 4

Purchasing goods/services to satisfy needs/wants

Question 5

Corporate social responsibility

Answer 5

When businesses consider the interests of stakeholders, society and the environment when making business decisions

Question 6

Depression

Answer 6

A severe contraction in economic activity, results in business failure, unemployment and falling prices.

Question 7

Economy

Answer 7

All activities undertaken for the purpose of production, distribution and consumption of goods/services within a region/country

Question 8

Exports

Answer 8

Goods/services sold from local businesses to overseas consumers

Question 9

Fiscal policy

Answer 9

Th use of the Federal government’s budget to control the economic cycle

Question 10

Globalisation

Answer 10

The process of people/goods/money/ideas moving around the world faster and more cheaply

Question 11

Global sourcing

Answer 11

Seeking out the cheapest materials and supplies internationally as if there was only 1 large market

Question 12

Imports

Answer 12

Goods/services bought by local consumers from overseas businesses

Question 13

Inflation

Answer 13

A general rise in prices across all economy sectors - money loses its value

Question 14

Innovation

Answer 14

Adding a new product or improving an existing product/process in a product line

Question 15

Interdependence

Answer 15

A joint dependence between participants in the economy - the reliance of consumers/businesses/financial institutions/governments on each other

Question 16

Interest

Answer 16

The price of having money belonging to someone else

Question 17

Labour market

Answer 17

The buying and selling of employees’ labour

Question 17

Investment

Answer 17

Using money to buy equipment/premises to establish/expand a business

Question 17

Law of Supply

Answer 17

States that the quantity supplied of a good/service varies directly with price

Question 17

Law of demand

Answer 17

States that the quantity demanded of a good/service varies inversely to price

Question 17

Market

Answer 17

Where the exchange of goods and services between buyers and sellers takes place

Question 18

Market equilibrium

Answer 18

The point where the supply and demand curves intersect

Question 19

Monetary policy

Answer 19

The reserve bank using interest rates to control the economic cycle

Question 20

Price mechanism

Answer 20

The interaction of demand and supply forces that determine the price of a good/service

Question 21

Production

Answer 21

The creation of goods/services

Question 22

Recession

Answer 22

2 consecutive quarters of negative economic growth, relatively mild compared to a depression - results in reduced spending, unemployment and slow economic growth

Question 23

Saving

Answer 23

Regularly putting aside money for the future