Economic Preformace & Standard Of Living Flashcards
(19 cards)
Definition of — Economics
Explores how individuals, groups, businesses and governments interact with each other in markets.
It focuses on how resources are allocated to satisfy needs and wants.
Definition of — Business
Explores how producers interact with consumers by providing goods and services that meet their needs and wants.
It focuses on the skills that contribute to the business success.
Definition of — Standard of living
Refers to the level of material comfort individuals, groups or nations enjoy. Living standards are often measured by the size of income and wealth of the individuals, groups or nations.
What is the Overseas sector
- relies on trade with other economies to help boost national income and also gain access to a wider range of products
- Australian producers sell goods and services to global economies as EXPORTS (X)
- Australian consumers buy goods and services from overseas producers as IMPORTS (M)
What are the corresponding names for these letters;
Y= O= C= S= T= I= G= M= X=
- Income and wages
- Outputs (Goods and Services)
- Consumption spendings
- Savings
- Taxation
- investments
- Government spending
- Imports (payment)
- Export (incomes)
What is a Peak(BOOM)
A peak or boom is characterised by full employment and inflationary pressures due to the level of demand (expenditures) being in excess of supply
What is a Contraction ( Downswing )
Is characterised by rising unemployment, declining inflationary pressure and low business and
consumer confidence
Is when the whole economy begins to slow down
What is a Trough (recession)
Lowest levels of income and output
Unemployment it is at its highest levels
Consumption demand and cells are at the lowest levels
What is a Recovery (upswing)
Rising economic activities including income, output and employment
Consumer demand rises and sales increase
What are LEADING indicators
Leading means future
- Dwelling approvals
- Housing loan application
- property prices
- GDP growth rates
What is a Coincident Indicator
Current indicator
- retail sales
- new motor vehicle sales
- job advertisement
What is a lagging indicator ?
Past (lagging behind)
- unemployment rates
- inflation rates (consumer price index/CPI)
- business investment
Recommend GDP Growth Rates
Sustainable rates between — 3.5% and 4.5%
Recommended Dwelling Approvals rates
Indicator that the economy is growing
No greater or less than 1%
Recommend Retail sale Rates
Indicates the level of demand in the economy
Economic Growth
The most widely and used indicator of economic performance
A sustained increase in the productive capacity of an economy usually indicated by the increased availability of goods and services
Measuring living standards
Living standards refer to the level of material comfort individuals, groups or nations enjoy/have.
Living standards are often measured by the size of income and wealth of individuals, groups and nations
Lorenz Curve
Measures relative living standards within a nation. It is a graph that depicts the level of inequality in the nation
- The greater the curve from the diagonal line and the greater the degree of inequality
- The small the curve from the diagonal line this more than degree of inequality
Gini coefficient (value)
• measures relative living standards within a nation using a numerical value to measure inequality
•is measured on a scale between 0-1
0= perfect equality
1= perfect inequality
Smaller = more even distribution
