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Year 10 Commerce > Topic 1 - Economic Indicators > Flashcards

Topic 1 - Economic Indicators Flashcards

1
Q

How is unemployment measured?

A

unemployment rate = unemployed/labour force x100

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2
Q

Employed + unemployed =

A

labour force

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3
Q

Why is employment important?

A

if there are too many or not enough people employed economic growth would be too slow or too quick inflation

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4
Q

Australian government target unemployment

A

typically around 5% - we take into consideration that people change jobs and some people are just unemployed

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5
Q

Causes of unemployment

A
  • cyclical
  • structural
  • frictional
  • seasonal
  • underemployment
  • hidden employment
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6
Q

Cyclical unemployment

A

during an economic downturn, there is less demand for goods and services meaning there are less jobs required and unemployment increases

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7
Q

Structural unemployment

A

when peoples skills don’t align with the work available due to increase in technology

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8
Q

Frictional unemplyment

A

when people are leaving one job and starting another

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9
Q

Seasonal unemployment

A

eg, fruit pickers, ski instructors. jobs that are only done in certain seasons or time of the year

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10
Q

Underemployment

A

people who have a job but would like more hours

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11
Q

Hidden employment

A

people who say they aren’t interested in work but would work if they could find work

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12
Q

What is inflation

A

an increase in the level of prices of the goods and services that households buy

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13
Q

How is inflation measured

A

the rate of change of those prices

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14
Q

Why is inflation important

A

so that businesses make profit. When businesses make more profit they can afford to produce more which requires more workers which in turn lowers the unemployment rate

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15
Q

Australian governments target for inflation

A

typically around 2-3%

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16
Q

Inflation below 2% means…

A

the economy will not grow meaning there is a higher rate of unemployment

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17
Q

Inflation above 3% means…

A

there are affordability issues and a decline in living standards

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18
Q

Demand pull inflation

A

when the demand for goods exceed the supply of goods that can be sustainably produced

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19
Q

Cost push inflation

A

when the supply of goods that can be produced decreases which can cause high prices and faster inflation due to high demand

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20
Q

What is macroeconomics?

A

the behavior of the economy as a whole
a branch of economics that studies how an overall economy behaves (eg. markets, businesses, consumers, governments)

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21
Q

Business cycle

A

a type of fluctuation found in the economic activity of a nation, peaking and troughing over time

22
Q

why is macroeconomics important?

A

it helps us understand how the economy is performing so the government can identify what needs to happen to keep the economy performing well so living standards are higher

23
Q

what does the macroeconomic policy involve?

A

fiscal and monetary exchange rate policy

24
Q

what is microeconomics?

A

the choices of individuals and businesses
the decisions that individuals and businesses make to allocate resources and the interaction between prices and production in certain markets

25
Q

what does microeconomic policy involve?

A

specific measures concentrating on certain industries and markets including:
- subsidies
- taxes
- competition policy
- price controls
- environmental policies
- regulation

26
Q

subsidies

A

financial aid including cash grants, interest free loans, tax breaks and rebates.
often to businesses that are desirable to the country including public transport and solar panels

27
Q

taxes

A
28
Q

competition policy

A
29
Q

price controls

A
30
Q

environmental policies

A
31
Q

regulation

A

reduces barriers to entry for new businesses in an industry and prevents unfair conduct.
consumers have more options and creates competition so quality increases and price decreases

32
Q

economics

A

the study of how people allocate scarce resources for production, distribution, and consumption, both individually and collectively

33
Q

need

A

things people require in order to survive including:
- food
- water
- shelter
- clothing

34
Q

want

A

things that people desire but are not essential for survival including:
- TV’s
- headphones
- holidays

35
Q

impact on society

A

the government aims to have all our needs and as many wants as possible met so that we will be happier and healthier and living standards increase

36
Q

factors of production

A
  • land
  • labour
  • capital
  • entrepreneurship
37
Q

land

A

natural resources which can be found above and under ground

38
Q

labour

A

human effort and skill

39
Q

capital

A

machinery or man made items

40
Q

entrepreneurship

A

the combination of the other three factors to create a business

41
Q

scarcity

A

there is not enough resources to satisfy all of peoples wants because production in limited and peoples wants are unlimited

42
Q

law of demand

A

as price for a good increases, the demand for that good will decrease
as price for a good decreases, the demand for that good will increase
decreased price means its more affordable and therefore more of it is wanted

43
Q

law of supply

A

as price for a good increases, the supply for that good will increase
as price for the good decreases, supply for that good will decrease
as the price increases, the business makes a greater profit and is willing to supply more

44
Q

what is the economy

A
45
Q

how is economic growth measured?

A
46
Q

why is economic growth important?

A
47
Q

Australian governments target for GDP

A

2-3%

48
Q

limitation of using GDP as an indicator of economic performance

A

does not take into account:
- non-market production (unpaid household work)
- affect on environment
- improvements in quality
- underground market transactions

49
Q

GDP

A

gross domestic product

50
Q

how is the economy’s size measured?

A

the total production of goods and services within the economy (GDP)

Year 10 Commerce (3 decks)

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