Macroeconomics

Question 1

Material living standards

Answer 1

Tangible Living standards measured by access to goods and services

Question 2

Non-material living standards

Answer 2

Aspects of a persons quality of life that can not be measured by monetary factors

eg: air quality, crime rate

Question 3

Economic growth

Answer 3

Economic Growth in an economy is defined as the rate at which economic activity grows over time.

Question 4

GDP

Answer 4

GDP is the final value of the goods and services produced during a specified period of time, normally a year.

Question 5

GDP per capita

Answer 5

GDP divided by the size of the population

Question 6

Nominal GDP

Answer 6

Nominal GDP measures a country’s gross domestic product using current prices, without adjusting for inflation.

Question 7

Real GDP

Answer 7

Real GDP is a measurement of economic output that accounts for the effects
of inflation or deflation.

Question 8

5 Limitations of GDP

Answer 8

1. excludes non-marketed production
2. Uses inaccurate guesses of some types of production
3. Does not account for negative externalities
4. Does no measure quality of goods and services
5. Does not measure the way goods services and incomes are distributed

Question 9

Alternate measures of national growth / living standards

Answer 9

MAP (measurement of Australia’s progress)

GPI (genuine progress indicator)

HDI (human development index)

GNH (gross national happiness)

Question 10

MAP ( Measures of Australia’s progress )

Answer 10

Collection of measures published periodically by the ABS

four main categories: Society, Economy, environment m and governance

Question 11

HDI ( Human development index )

Answer 11

Index created by combining range of economic and social indicators but DOES NOT COUNT ENVIRONMENTAL EFFECT

1= highest 
0 = lowest

-GDP per capita, life expectancy, education standards, adult literacy rates

Question 12

Productivity

Answer 12

The volume of output (Real GDP) produced from a given input

Question 13

Monetary policy

Answer 13

RBA decisions to manipulate interest rates to encourage or discourage saving/ borrowing money

Question 14

Budgetary / Fiscal policy

Answer 14

Government decisions on taxation and spending ( expansionary or contractionary stance)

Question 15

Economic prosperity

Answer 15

Having high incomes per person and being able to consume more goods and services now and into the future avoiding inflation

Question 16

Issues with economic prosperity / growth

Answer 16

Can lead to structural unemployment

Can accelerate inflation and reduce purchasing power

can limit future economic growth

Question 17

Environmental sustainability

Answer 17

Preservation of natural environment into future using sustainable and renewable practices to mitigate environmental harm.

Question 18

Sustainable economic growth

Answer 18

Expanding an economy’s production levels without impairing ability of future generations to meet their own needs

Question 19

Common access resources

Answer 19

Resources we all share and depend on

Eg: air, oceans, climate, ecosystems

Question 20

Inter temporal efficiency

Answer 20

Development that meets the needs of the present without comprising the ability of future generations

Question 21

Environmental policy + examples

Answer 21

Any policy designed to protect the physical or natural environment from damage and depletion

• regulation + legislation
• market based approaches
• direct action

Question 22

Regulation and legislation

Answer 22

Environmental protection and biodiversity conservation act (1999)

-laws and guidelines to asses environmental impacts of developments

projects require proof that benefit > cost

Question 23

Market based approaches

Answer 23

involves gov action to provide businesses / consumers

financial incentives and subsides to support environmental sustainability
or taxes and fines to penalise unsustainable practices

-Eg: carbon tax, subsidies, ETS

Question 24

Direct action

Answer 24

Direct action by government to promote or fund projects which minimise impact on environment

Eg: investment in planting trees or environmental funds