factors that can cause variations in economic performance

Question 1

explain why there are variations in economic performance

Answer 1

The economy is complex and constantly changing, which leads to variations in economic performance over time.

Question 2

what are the 3 factors can cause Variations in Economic Performance

Answer 2

1. Foreign Ownership Levels
2. Employment Levels
3. Levels of Debt

Question 3

Foreign Ownership Levels

Answer 3

• Foreign ownership is when a person or business owns property in a country that they are not citizens of.

For example, multinational corporations, such as McDonalds, operate in nearly every country. McDonalds will be considered a ‘foreign’ business in Australia as their headquarters are located in USA.

Question 4

Employment Levels

Answer 4

• Full employment can be defined as the percentage of the labour force that is employed in a job (usually more than two hours per week in Australia).
• Full employment generally means people:
• Have more disposable income to buy goods and services
• Can afford housing
  -Don’t have to rely on government for social security

Question 5

Levels of Debt within government

Answer 5

The level of debt accumulated by the government and households can influence living standards

Government Debt:
- The government will occasionally spend money to stimulate the economy (such as funding roads, etc).

• If the government spends more than it recieves, then it may run a budget deficit.
• The government will then need to borrow money, which can result in debt and interest payments.

Question 6

Levels of Debt outside of government

Answer 6

Household Debt:
- If a person is not able to work due to unemployment or has a lack of disposable income and high levels of debt, then this can have a negative impact on their living standards.

• It can also impact the economy if a number of people are not able to manage their personal debt.