Size and material Flashcards
Medium size and was made out of marble showing prestige
What Does Market Forces Mean When there is a surplus
Market Forces is 3 sentences
- At the Old price Surplus
-Consumers will bid up price
-Continue until equilibrium
What Are The Factors Of AD
C+G+I+(X-M)
Factors of AS
Cost of Production
Resources
Productivity/Tech
What is Marginal Analysis
M-M Where M and M Meet, this is the best place to operate as they will make max profit, if they were to work above this they wouldn’t make profit on the last output, if they were to make one less output, they would lose out on profit.
How to Find Consumer Surplus
Above the Price Below Supply curve
How to find Producer Surplus
Below Price Above Demand curve.
What Happens if Real GDP Falls
Price will increase
What is GDP, and why is it important for understanding the New Zealand economy?
GDP (Gross Domestic Product) measures the total value of all goods and services produced in a country over a specific period. It’s important as it indicates the economic health and growth of New Zealand.
What Happens if real GDP increases
Price will decrease
How do interest rates impact consumer spending in New Zealand?
Lower interest rates typically encourage borrowing and spending, boosting economic activity, while higher rates can discourage spending and lead to reduced economic growth.
What role does inflation play in the purchasing power of New Zealanders?
Inflation reduces purchasing power, meaning consumers can buy less with the same amount of money. High inflation can erode savings and affect living standards.
How does the exchange rate affect New Zealand’s exports and imports?
A stronger NZD makes exports more expensive and imports cheaper, potentially reducing export competitiveness. Conversely, a weaker NZD boosts exports and makes imports more costly.
How does government fiscal policy influence economic growth in New Zealand?
Fiscal policy, through government spending and taxation, can stimulate economic growth by increasing demand or can contract it through austerity measures.
What are the effects of international trade on New Zealand’s economic performance?
International trade allows New Zealand to specialize in certain goods, leading to increased efficiency, job creation, and economic growth, but also exposes the economy to global market fluctuations.
What is the significance of the Reserve Bank of New Zealand’s monetary policy?
The Reserve Bank sets interest rates and controls money supply to manage inflation and stabilize the economy, influencing borrowing, spending, and investment.
How do changes in unemployment rates affect the overall economy in New Zealand?
Rising unemployment typically leads to reduced consumer spending, lower tax revenues, and increased government welfare costs, negatively impacting economic growth.
What impact would a rise in interest rates have on the AD curve?
A rise in interest rates would likely shift the AD curve to the left, as higher borrowing costs discourage consumer spending and business investment.
What effect does an increase in export demand have on the AD curve?
An increase in export demand shifts the AD curve to the right, as it raises the total demand for goods and services produced domestically.
What effect does a decrease in the cost of raw materials have on the AS curve?
A decrease in the cost of raw materials shifts the AS curve to the right, as it reduces production costs and allows businesses to supply more goods at each price level.
How would an increase in wages affect the AS curve?
An increase in wages generally shifts the AS curve to the left, as higher labor costs can reduce the quantity of goods and services supplied at any given price level.
What happens to the AD curve if personal income taxes are reduced?
A reduction in personal income taxes shifts the AD curve to the right, as it increases disposable income, leading to higher consumer spending.
What impact does a rise in import prices have on the AS curve?
A rise in import prices typically shifts the AS curve to the left, as higher costs for imported goods and materials can reduce overall supply.
How does a decrease in business confidence affect the AD curve?
A decrease in business confidence typically shifts the AD curve to the left, as businesses may reduce investment and spending due to uncertainty about the future.
What effect would a major technological advancement have on the AS curve?
A major technological advancement shifts the AS curve to the right, as it increases productivity and allows more goods and services to be produced at lower costs.
What happens to the AD curve if there is a significant increase in government debt?
An increase in government debt can lead to concerns about future taxation, potentially shifting the AD curve to the left if it dampens consumer and business confidence.
How would a rise in inflation expectations affect the AD and AS curves?
Rising inflation expectations can shift the AD curve to the right, as consumers and businesses may increase spending in anticipation of higher prices. It may also shift the AS curve to the left if businesses raise prices in response to expected inflation.
