Economics Flashcards
For the Economic section of the exam. (20 cards)
What does GDP stand for?
Gross Domestic Product
What is economic growth?
An increase in the amount of goods and services produced per person (per capita) within a specific period of time.
Measured by GDP
How much should the economy grow yearly?
More than 2%
Why is Economic growth important?
More people are employed —> more people being paid wages —> more goods and services being able to be bought more —> this means economic growth leads to higher living standards
What is an economic recession?
When economic growth falls for 2 or more quarters in a row
Aus recession: 1960’s, 1970’s, 1980’s, 1990’s
What Is an economic depression?
An extreme recession, lasting 2 or more years
What are the limitations of GDP as a measure
While it accounts for the economic factors of a nation, it doesn’t reflect the societal factors of a nation.
What is inflation?
Occurs when there is an increase in the general level of prices paid for goods and services over a certain period of time.
What is the main cause of inflation?
Increase in demand for goods and services.
Why are unemployment rates a good indicator of economic performance?
Because high employment rates means
- less tax revenue for govt
- more govt money into welfare payments
What are causes of Unemployment?
Weak GDP
Increased competition from overseas
Labour saving technology
What is productivity and what are the 2 main types?
- productivity measures what can be output from a given amount of input
Labour productivity
Capital productivity
What are living standards?
The quantity and quality of material and non material goods and services available to a group of people
What are the factors that affect living standards?
Material: access to physical goods and services
and non material! Standards which can’t be measured in dollar terms
What are the factors that affect consumer decisions?
Price
Marketing
Age/gender of consumer
Convenience
Ethical and Environmental
What is the government’s key economic goal and why?
Io improve living standards because it leads to a stronger/more prosperous nation
What are 6 main policies to improve living standards?
How does the government redistribute wealth?
How does the government promote regional economic growth?
APEC - creating policies to improve overall economic growth
