Flashcards in Economics Deck (59):
what is an economic policy?
Policies that are implemented with the intention of minimising unemployment, inflation and redistribution wealth to maintain acceptable living standards
how do government use economic policies to improve living standards
by minimising unemployment and inflation and redistributing wealth, to maintain acceptable living standards.
What is macroeconomics?
The branch of economics that involves the level of expenditure
How does the Australian government receive revenue? (7)
Medicare levy, personal income tax, capital gains tax, with holding tax, superannuation fund tax, fringe benefits tax, company tax.
List the Australian government expenditure?
Health, defence, education, social services, Net payments to other governments, public debts, transport.
What is a deficit budget?
The level of governments receipts is less than the level of government expenditure. The country owes money. 7 years in deficit and we go into recession
What is a budget surplus?
When the level of government receipts is greater than the level of government expenditure. The country is in profit.
What is a balance budget?
The level of government receipts is equal with the level of government expenditure- rare event government will ussually aim for fiscal policy.
What is the monetary policy?
Operated by the reserve bank of Australia that seeks to manage the level of spending in Australia. Controls the money in the economy and the rate at which the money flows around the economy.
List the 3 ways the RBA influences the flow of money which effects how money is spent in the economy.
Changing interest rates
influencing the exchange
How does the RBA influencing the flow of money affect the standard of living?
Interest rates can help to achieve the governments goals of low inflation, strong, and sustainable economic growth and full employment ultimately improving Australians living standards.
What is meant by the term Microeconomic Policy
Examining the operation of the smaller fragments making up the whole economy.
List the 4 main areas of the economic reform policy
increased employment opportunities
improvement in the living standards of Australia
What is the Labour Market
Market where wage levels and working conditions such as hours of work, leave, and terms of dismissal are determined.
How does deregulation of the labour market affect workers?
wage increases as a result of their increased productivity. Lower costs and improved competitiveness. Increased employment longer hours to increase productivity. Increased material living standards.
What is meant by deregulation.
Deregulation is the removal of unnecessary government controls, restrictions and supervision in various areas of the economy.
Explain the role of NCP
the national competition policy is designed to strengthen the level of competition and efficiency in markets
how does deregulation promote government economic goals?
Lower cost inflation, strong and sustainable economic growth, higher employment over the long ter, and external stability.
List 4 illegal anti competition practices according to the ACCC under the competition and consumer act 2010
How does Australias immigration policy affect the economy
The federal government current immigration program tries to attract young and suitably skilled people who are likely to make a very valuable and ongoing economic contribution.
List 4 measures the Australian Environmental policy has introduced
A scheme to install domestic water tanks
A scheme to install solar panels
a scheme to install insulation in homes
signing of the kyoto agreement
Why do the government directly intervene in the reallocation of resources? ( 4)
-market may produce socially undesirable items
-market may not produce enough socially desirable goods and services
-provide goods & services private sector won't supply (public toilets)
How does the government intervene in the distribution of income? (5)
- welfare benefits
- progressive taxes
- payments to parents of school aged children
- provision of essential services
- compulsory superannuation
Explain the 4 psychological factors that influence a consumers decision to buy
Perception- people Often act on perceptions of reality rather than reality itself. People won't buy a product they perceive lower quality to similar brands.
Motives-comfort, health, safety,pleasure, cleanliness, amusement, approval from others
Attitudes- A consumers attitude towards a business and its product, influences success or failure of business
Personality- influences the types and brands of product that a person buys
Explain the 4 sociocultural factors that influence a consumers decision to buy
family and roles- occupy different roles within family and groups in wider community. what a mother would buy compared to her kid.
peer groups- may change to be more in line with that persons peer group beliefs and attitudes
social class- factors used to classify people are education, occupation & income therefore influence type, quality and quantity of products
culture and sub culture- culture= infiltrates all that we do in everyday life. (what ppl eat, how they live)
subcultures are ppl like goths
Explain the economic factor that influence a consumers decision to buy
the economy has an enormous impact on consumers willingness and ability to spend. During economic boom people are more willing to spend because they have a secure job.
explain the governments factors that influence a consumers decision to buy
Governments use a number of economic policy measures to influence the level of economic activity. can directly or indirectly influence the desicion.
what is marketing
the whole process of providing goods and services to satisfy the needs and wants of consumers at the right place and time using the right promotions.
What are the 4ps
Successful marketing. product, price, place, promotion
The right product at the right place at the right price at the right time.
What power does the consumer have in the financial world
Consumer holds all the power. As the purchase of products drives the market place business find themselves at the mercy of consumer behaviour. If consumers stop buying it affects the business, distributors and manufacturers
what is the role of the ACCC
to regulate and oversee business operations while protecting the rights of the consumer.
explain the difference between direct and indirect taxes
direct taxes are levies imposed directly onto the incomes of individuals or companies. indirect taxes are placed on apon the sale of a good or service and added onto the price of an item
Personal income tax
the direct tax paid by individuals who earn income in the form of wages, salaries, rent, interest and dividends.
capital gains tax
The direct tax levied on the real profits made from the sale of capital asset such as land and shares purchase after 1985
The direct text design to provide medical insurance to help cover the basic costs of family health care
The direct tax applied to individuals who failed to register their tax file number when receiving income such as dividends and interest
the direct tax that is flat or proportional and is levied directly on business profits
fringe benefits tax
The direct tax paid by firms on the value of 'perks' provided to employees such as a company provided car or house
superannuation fund tax
Direct tax that is levied at 15% of most premiums as well as on the interest from fund investment
petroleum resource rent tax
The direct tax that is level eight at 40% of the profits made from offshore petroleum operations
The indirect tax placed upon selected locally produced goods such as petrol beer spirits wine and tobacco. adjusted twice a year and is linked to CPI
The indirect tax placed upon certain imported goods to raise revenue and protect local producers from foreign competition
goods and services tax
indirect tax levied at the rate of 10% on many goods and services in the economy
what are 2 reasons a company would want to improve the level of technology in their of industry
- improved output
- more consistent quality.
What are the 5 areas business should focus on when looking to increase their productivity.
-investing in new tech applications
-capital investments in equipment and facilities
-improving systems tasks and processes
-Materials and supply chain management
-more training and up skilling of workers
what is the traditional hierarchy of a large business
Explain the hierarchical organisational structure of a large business
employees arranged into levels from senior management down to frontline workers. it is clearly identifiable organisation of positions, roles, responsibilities and accountabilities. it has a defined span of control and centralised decision-making
explain why in recent times large and small businesses have moved away from the hierarchical structure
gains additional operational flexibility.
explain network structure
when businesses outsource some of their functions to outside businesses. the core business role is to exercise administrative cooperation with others
what is the matrix structure and what are some of the benefits of using this model
based on forming a team with specialists from different functional areas. some of the benefits include development of improved communication channels, the observation and reduction of interdepartment rivalries and an increase of ideas being put forward
what is meant by the term triple bottom line philosophy
The criteria used used to measure the success of a business activities. people, planet, profit.
why are more businesses moving towards the triple bottom line for loss philosophy form of reporting
having three criteria enables the change in reporting types of businesses. Financial or economic performance social performance and environmental performance.
what are the main areas companies need to focus on when applying the triple bottom line principles?
concentrate on planning financial matters and make sure they're acting in a way that benefits the community. need to ensure people are not getting exploited. when feasible to improve the environment.
explain what social enterprises and there business philosophy
businesses that apply commercial strategies to maximise improvement in human and environmental well-being rather than maximising profits for external shareholders. Adopting triple bottom line philosophy
what are five environmentally stable business practices
decrease use of physical resources of goods and services
increase in recycling
eliminate or reduce toxins in products
decrease wastage of resources
provide greater protection to our natural environment
what is meant by the term business ethics
managers at all levels demonstrate leadership to make sure that ethical behaviour and related values are incorporated
explain the term code of ethics
written guidelines that workers and management follow to help them conduct actions in accordance to the organisations values and ethical standards
explain the term code of conduct
A specific outline of dos and don't's within an organisation and explanations of acceptable and unacceptable behaviour. either legal or illegal but either way unethical