Test 4 - Economics and Ethics Flashcards
What is inflation
A sustained rise in the cost of goods and services
What organisation manages the cpi
The RBA
What is the inflaiton rate?
The percentage rate change in CPI from one quarter to the next
What occurs in times on greater inflaiton?
More time is spent searching for lower prices
Market behaivor changes
Less goods and services will be imported
Profit margins get squeezed profits may decrease Lower spending on luxury items
Debt may increase as people may take out more loans
What is the basic economic cycle process?
Recession trough recovery
What are some things that occur with a better economy?
More disposable income means increased demand for goods and services.
The demand > supply
Managgers and operators will increase prices due to this demand. Customer have money now, proces can be increase, they have the ability to pay more
What occurs when IR is lower
Pushes economy faster:
- Little incentive to save
- Less money made on savings
- Puts money into economy
- Increased spending
What occurs when IR is higher
Slows the economy
- Profitable to put money into bank
- Takes money out of economy
- Less spending
What occurs during rising unemployment rates?
- Lower consumer Spending
- Lower demand for goods and services
- Spending is focused on essential items, not luxury goods
- Over-supply of labour may result in lower pay levels
- Specialised skills + experience are lost when people are sacked
- Staff may be motivated by fear of losing their job
What occurs during falling unemployment rates?
- Consumers can spend more
- Greater demand for goods and services
- Consumers may spend more on luxury items
- Shortages in labour puts upward pressure on pay
- Higher wages increase business costs
- Workers are more motivated if business is doing well
What is unskilled and skilled labour?
Skilled: Labour that requires specialised skills
Unskilled: Jobs roles can be filled by people without special qualifications or skills
Summarize the supply of labour
If there’s a shortage of people with specialised skills, demand is high for skilled labour and supply is low
- Offers of higher wages may attract special skills
What are green gifts?
Branded, reusable shopping bags, water bottles and stationery made our of recycled goods shows a commitment to the environment
Donation to good causes
The business can promote their goodwill . Being associated with a good cause builds an image of the business that cares about the community
Exceed expectations in service
WOM promotion will grow out of treating customers better than competitors and providing exceptional service, eg deliver products in time, adding free service and support
