Glossary of economic terms

Question 1

Allocation

Answer 1

The way scarce resources are distributed among producers, and how scarce goods and services are divided among consumers.

Question 2

Consumer

Answer 2

An individual who purchases goods or services fro a personal use

Question 3

Capital resources

Answer 3

Inputs from manmade goods, such as machines or computers, that are used to produces further goods and services

Question 4

Debt

Answer 4

Sum or money that is still owed

Question 5

Depression

Answer 5

When economic activity is in decline over a long period of time

Question 6

Economics

Answer 6

The study of how people produce, consume and share wealth

Question 7

Globalisation

Answer 7

The process that involves all countries in the world being linked together, resulting in an exchange of views, ideas, products and culture

Question 8

Good and services tax (GST)

Answer 8

A tax added to the value of some goods and services. In Australia, the tax is 10%

Question 9

Gross domestic products (GDP)

Answer 9

The total market value of all goods and services produced within one country

Question 10

Inflation

Answer 10

When the general level of prices paid for goods and services over a certain period of time increases

Question 11

Interest rates

Answer 11

The amount a borrower must pay to a lender for the use of assets such as money

Question 12

Investing/Investments

Answer 12

Putting money into shares, property or other financial schemes in the hope of making a profit

Question 13

Labour resources

Answer 13

Inputs from human effort (physical and/or mental) used in the production of goods and services

Question 14

Living standards

Answer 14

The level of wealth, material goods, comfort and life necessities available to people living in a geographical area

Question 15

Market capitalist economy

Answer 15

An economic and political system where private individuals are the producers who exchange goods and services with consumers and in return keep the profit

Question 16

Market socialist economy

Answer 16

An economic and political system where the exchange of goods and services takes place via a market where consumers and producers exchange goods and services.

Question 17

Planned capitalist economy

Answer 17

An economic and political system where individuals own the resources to produce goods and services but the government or state dictates what, how and who it will be distributed to

Question 18

Planned socialist economy

Answer 18

An economic and political system where the government or state predominantly owns the resources and also decides what, how and who it will be distributed to

Question 19

Specialisation

Answer 19

Having limited resources to achieve unlimited needs or wants

Question 20

Scarcity

Answer 20

Having limited resources to achieve unlimited needs and wants

Question 21

Subsistence economy

Answer 21

An economic system where people produce enough for their own needs through methods such as hunting, gathering and farming. Money is not used

Question 22

Surplus budget

Answer 22

When government spends less than their allocated revenue

Question 23

Unemployment rate

Answer 23

The percentage of people who are in the labour force who are unemployed. The labour force includes both employed and unemployed