mc Flashcards
role of apra?
responsible for maintaining the integrity of the Australian financial system by supervising institutions
APRA promotes financial system stability
role of asic?
ASIC regulates the conduct of Australian financial bodies.
role of accc?
protecting the interests and safety of consumers, and supporting fair trading in markets affecting consumers and small business. promoting the economically efficient operation of, use of, and investment in infrastructure, and identifying market failure.
role of rba?
The Bank conducts the nation’s monetary policy and issues its currency. It seeks to foster financial system stability and promotes the safety and efficiency of the payments system. It also offers banking services to government.
what is participation rate in labour market
The percentage of the working age population in the labour force
difference between apra and asic
While the Australian Prudential Regulation Authority is responsible for ensuring that Australia has a stable, efficient and competitive financial system, the Australian Securities and Investments Commission (ASIC) has responsibility for market integrity and misconductconsumer protection
define labour force
also known as the Australian workforce, all the members of Australia who arelooking+ able to work, including the willing but unemployed individuals.
define participation rate
(employed + unemployed) / working age population
if you were able to work but are not looking for fork you are part of working age population but not unemployed
list and explain some factors affecting supply of labour
Wage rate – the higher the wage rate offered by employers, the more likely workers
will be to work for that employer.
Working conditions – firms that offer attractive employment conditions (e.g. flexible
work hours, child care facilities, recreational facilities, etc.) are more likely to attract
and retain labour.
Education and training qualifications – more qualified positions which require higher
levels of education, training, qualifications, experience and skills will attract a lower
supply of labour. The supply of semi-skilled and unskilled labour to a firm or
industry will be larger.
Size of the population – countries with larger populations will have larger potential
workforces.
With reference to the diagram, explain how market equilibrium price and equilibrium
quantity could be achieved in the virtual reality headset market.
At the price of $150 the quantity demanded exceeds the quantity supplied
by 5,000 VRHs. Given that the supply of virtual reality headsets is limited, consumers will start to
compete against each other and price will start to rise. The rise in price will mean that demand will
start to contract, upwards to the left along the demand curve. Supply will start to expand, upwards
to the right along the supply curve. The interaction between demand and supply will continue until
there is no excess demand relative to supply. This will occur at the market equilibrium point for
virtual reality headsets at the equilibrium price of $250 and the equilibrium quantity of 6,500
VRHs.
factors that can affect price elasticity of demand for a product
The availability of substitutes
The proportion of income spent on the good
Complementary nature of the good
The length of time since a price change
Whether the good is a necessity or luxury
Distinguish between primary markets and secondary markets.
Primary: markets in which firms raise funds by selling financial assets to investors. It is for the trading of newly listed financial securities. (initial public offerings)
Secondary: markets in which individuals buy and share existing financial assets with other investors
Outline TWO factors affecting the demand for funds.
Transactionary motive – holding money for the purpose of buying goods and
services.
Precautionary motive – set aside some funds for unforeseen events, e.g.
accident, illness or loss of income or saving for an expensive purchase in the
future (e.g. house or car).
Speculative motive – holding money to exploit investment opportunities which
may yield real returns on funds, e.g. buying shares, bonds and real estate.
Financial innovations – technologies such as EFTPOS, Afterpay, bitcoin, etc.
have reduced the need for people to hold cash.
Other factors – rate of economic growth, changes in real incomes, investment
expectations, asset prices, interest rates.
Outline the role of the Australian Securities and Investments Commission.
Responsibility for market integrity, consumer protection and dispute resolution across the entire financial system including investment, futures, insurance and
superannuation products.
Issues Australian company numbers and certificates of incorporation, processes annual company returns, enforces the Corporations Law dealing with corporate activities including finance, accounting, takeovers and prospectuses.
Regulates companies and financial markets.
Regulates Australian companies and financial markets, with the aim of protecting investors and consumers and improving the performance of the financial system.
Supervises company behaviour (information, regulation and reporting).
Monitors securities industry and security markets (stock exchange).
Investigates and acts when illegal or unethical behaviour occurs.
Regulates the share market.
Distinguish between the structural component and the cyclical component of the
Federal Budget.
Structural component refers to explicit changes in government spending or taxation
policies, while the cyclical component refers to changes in government spending and/or
revenue which are caused by changes in the level of economic activity according to the
business cycle.
