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Year 10 Exam Revision > Humanities Economics > Flashcards

Humanities Economics Flashcards

1
Q

Define GDP

A
  • Gross. Domestic. Product.

- GDP measures the total value of all goods and services produced within an economy.

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2
Q

What is GDP per Capita?

A

GDP Per Capita is a measure of a country’s economic output that accounts for its number of people.

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3
Q

What does GROSS mean?

A

Total

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4
Q

What does DOMESTIC mean?

A

Production within a country

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5
Q

What does PRODUCT mean?

A

Goods and Services

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6
Q

What is Economic Growth?

A

An increase in the amount of goods and services produced per person within a specific period of time.

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7
Q

How is Economic Growth measured?

A

Economic Growth is measured by the three indicators; GDP, Inflation and unemployment rate. And it is done so by comparing one year’s percentage (Eg GDP) to the previous year’s percentage. The percentage change is the level of ECONOMIC GROWTH or CONTRACTION in a country.

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8
Q

What is a Recession?

A

It when there are 2 or more consecutive quarters of negative growth/economic growth falls

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9
Q

What is a Depression?

A

It is when economic growth decreases for 2+ years and therefore there is a mass decrease in available credit, increase in unemployment and little consumer confidence.

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10
Q

What is Inflation?

A

Inflation is when the general level of prices paid for goods and services over a certain period of time increases.

General rise in prices over time;
Measure by using a selection of 100 000 goods and services, then they compare prices this year to the previous year.

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11
Q

Define CPI

A

Consumer price index

It is a sample of final produces used to measure inflation.

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12
Q

What is the unemployment rate?

A

It is the percentage of people who are in the labour force and are unemployed. (Includes all that employed and unemployed)

Unemployment is that state of looking for a job but being unable to find one due to a variety of factors that must be met.

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13
Q

What is the Labour Force?

A

The labour force is a number of employed and unemployed people within a population who have the ability to work.

Needs to be:
15+
Not a full time student
Not part of the military student
Has the ability to work (no physical disabilities)
Works part time for 1 or more hours a week.

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14
Q

What are the types of unemployment?

Explain them…

A
  • Seasonal Unemployment; growing seasons, sales seasons ect.
  • Cyclical unemployment; changes in business cycles means that jobs are reduced
  • Frictional unemployment; transitioning between jobs
  • Structural unemployment; replaced or made redundant use to technology advancement
  • Hardcore unemployment; lacking the personal skills to be employed anywhere
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15
Q

What is underemployment?

A

The under use of a worker due to a job that does not uses the worker’s skills or is part time, leakages worker idle.

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16
Q

What is the Poverty Line?

A

Minimum level of an income deemed adequate in a particular country.

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17
Q

What is Youth employment?

A

15-24 year olds that are unemployed; they don’t have a job but is actively seeking for work

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18
Q

What are the Factors of Productivity?

A
  • Land — the land resources used to produce
  • Labour — the human resource
  • Capital — the made resources used to produce
  • Enterprise — the management of resources
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19
Q

What are the two types of Productivity?

A

Labour Productivity- training staff, incentive schemes, good management

Capital Productivity - use of technology and improving the process

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20
Q

How to improve Labour Productivity?

A
  • Good Management practice Eg. -Organisation, good leaders
  • Workplace Culture And flexibility- ensuring an appropriate, safe, motivating and happy environment for all employees to work in Eg beliefs, values or Flexibility in where to work Eg. work from home, quiet space
  • Effective Training Eg. Ensuring staff develop better skills via training, mentoring programmes with experienced staff
  • Employee Incentive Scheme
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21
Q

What is Part Time?

A

A form of employment that carries fewer hours (>30hrs) per week than a full time job. They work in shifts

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22
Q

Why is Economic Growth important?

A

When Economic Growth there is higher production of goods and services and more employed people.

Greater employment means a greater income which means more spending and therefore the increase of living standards of citizens by the fulfilment of desires and needs via goods and services.

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23
Q

What happens if there is negative economic growth?

A

When there is a contraction or negative economic growth then it means that there is a decrease in the availability of credit, Little consumer confidence and an increase in unemployment.

Decrease in goods and services productions means there is a decline in the number of wools being employed and the wages they are being paid, therefore less spending and a decrease in living standards.

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24
Q

What are the limitations of GDP?

A

The limitations of GDP are;

  • it is a measure of a single factor in the economy
  • there is social dm environmental consequences of producing more goods and services
  • GDP is not evenly distributed through all members of society
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25
Q

Current GDP?

Target GDP?

A

Targeted Rate : 3.25%-3.5% (or 2-3%)

Current Rate : 2.3%

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26
Q

What is a quarterly?

A

3 consecutive months of a year…
Eg January - March
July - September
October -December

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27
Q

What causes inflation?

A
  • Consumers feeling confident about their income and employment in the future
  • business felling confident about the future- expanding business operations-> employs more staff
  • overseas trading partners of Australia performing well and demanding the economy’s exported goods and services
  • lower taxes
  • relatively low interest rates
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28
Q

Who are the Inflation Winners?

A
  • High income earners : income increases at the same rate or faster than inflation
  • Borrowers: Borrow with a fixed interest rate, purchased now
  • Importers : Price of imported goods are cheaper than those locally produced
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29
Q

Who are the Inflation losers?

A
  • Low/Middle Class income earners; income dongs increase as fast as inflation
  • Bank Savers; money in the bank is not worth as much previously
  • Exporters; exported goods become more expensive, demand from overseas falls
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30
Q

What is the targeted rate and the current rate of inflation in Australia?

A

Target rate: 2-3%

Current rate: 1.3%

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31
Q

What effects does unemployment have on the economy?

A
  • reduction in overall GDP
  • likely reduction in government revenues therefore due to income tax being given less spending money
  • must pay more to assist the unemployed in the firm if social benefits and welfare programs
  • Economic stress
  • tight budgets
  • financial hardships
  • edging closer to the poverty line
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32
Q

What are the social effects of unemployment?

A
  • physiological effects (depression for not working)
  • loss of skill from the workforce
  • reduced living standards
  • increased crime
  • reduced life expectancy
  • it may possibly impacts child’s opportunities
  • mental illness issues
  • family breaks down due to financial stress
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33
Q

What are the causes of unemployment?

A
  • When production or GDP is weak spending in the economy has decreased
  • businesses may cease to hire new staff and cut employees to save money
  • increased overseas competition (difficult for Australian businesses to compete) so they move overseas for cheap labour or may shut down.
  • labour saving advanced technology may be introduced
34
Q

The cost of items increase because …

A
  • increased demand
  • increased cost of production
  • increased wages/pay/income
35
Q

How does interest rates influence inflation?

A

High interest rates -lower spending

Low interest rate- more spending due to more income

36
Q

Why are bank savers losers of inflation?

A

Money in the bank may not but as much as it did previously

37
Q

Why are low-middle income earners losers of inflation?

A
  • income of the low-middle class income earners will not increase along with the inflation rate increase
  • the higher prices of goods and services will mean that they can only buy little variety of goods and services and only a certain portion of their needs and wants are satisfied due to less spending
38
Q

Why are exporters loser of inflation?

A

The exporting companies will have to spend a lot of money for the production of goods and services in the economy due to the inflation and the increased prices of goods and services.
But the price of goods and services will be sold overseas and still will not make enough profit or will not fulfil the money used for the production of goods and services produced.

39
Q

How does Good Management practice improve labour productivity?

A

Good managers who want to improve production will organise and properly assign task to the employees as well as treat and respect them equally.

40
Q

How will effective training improve labour productivity?

A

Ensuring staff develop better skills via training, mentoring, motivation, and practising will ensure the job is done efficiently.

Getting mentored by experienced staff will ensure that juniors will find motivation as well as some ways to hack the workload.

41
Q

How some workplace culture and flexibility increase labour productivity?

A

-Workplace Culture And flexibility will ensure an appropriate, safe, motivating and happy environment for all employees to work in Eg beliefs, values or Flexibility in where to work Eg. work from home, quiet space

42
Q

How will employee incentive schemes improve labour productivity?

A

Eg. Bonus, shares in the business, vacations or additional pay leaves.

The incentive is linked to performance and therefore they have a reason/goal to improve the production in the business.

43
Q

How can you increase Capital productivity?

A

Technology- buying equipment which uses advanced technology which will ensure jobs are done within a short amounts of time and cost.

Improving processing- limit the amount processing and only include the crucial processes, Eg restaurant, waiter or go to the front counter to order

44
Q

How is living standards in a country measured?

A
  • Material: to the access to physical goods and services, and is usually measured by GDP
  • Non-Material: quality of life that cannot be measured in-terms of currency as it cannot be touched but it affects the enjoyment of livelihoods.
45
Q

How does materials affect living standards?

A

More goods and services means people’s desires and wants are satisfied and therefore life is generally better.

Producing goods and services provides citizens with employment and Therefore income for purchasing goods and services which improve lives.

46
Q

What are the non material factors which affects living standards? (5)

A
  • Freedom of Speech
  • Free Elections
  • Low Levels of Crime And Discrimination
  • Perseverance of the environment
  • Adequate Leisure Time
47
Q

How is non-material living standards measured and why is better to be measured this way?

A

OECD Better Life Index
(Organisation for Economic Co-operation and Development Better Life Index)

** This seeks to provide a holistic picture of the true living standards by measuring progress based on 11 Eg. environment. ***

48
Q

Why is there Variations of Living Standards? (5)

A
  • Limited government
  • Natural Resources
  • Stable Government
  • Labour Productivity
  • Labour Resources
49
Q

How does limited government affect living standards?

A
  • This means that government allows businesses to operate without (many) restrictions. This ensure that companies are able to produce what the people want and demand to pursue profit.
50
Q

How does natural resources Availability affect living standards?

A

The amount of natural resources in a particular place ( Metal ore, coal, gas, oil etc) affects jobs and access to goods needed for a good standard of living.

51
Q

How does a stable government affect living standards?

A

A stable government means there will be no conflict to interrupt the production of goods and services.

52
Q

How does labour productivity affect the living standards?

A

A good labour productivity means the workers can produce more due to better skills, training and help from machines.

53
Q

How does labour resources affect living standards?

A

The more people employed, the more goods and services they make and more tax the government receives/earns to pay to public services ( infrastructure, hospitals, roads) which allows businesses to be more efficient.

54
Q

What are the factors which make consumers buy certain products and services? (6)

A
  • Price
  • Availability of credit
  • Marketing
  • Age And Gender
  • Convenience
  • Ethical And Environmental Considerations
55
Q

How does price influence consumers to buy certain products?

A
  • buys high priced items for prestige because the item is a Symbol of wealth and status
  • If Price to high consumers view the product not worthy the price/cost but if priced too low the consumers become suspicious of quality.
56
Q

How does the Availability of Credit influence consumers to buy certain products?

A

Credit is an agreement where money (or something of value) is lent to a borrower and must be repaid (usually with interest) at a carter date.
Credit is easy to Obtain and use which influences a person’s decision to spend.

57
Q

How does Marketing influence consumers to buy certain products?

A

Marketing is conveying the value of a good or service to a customer in order to sell the product to them.
Marketers divide the market into groups or subsets of consumers with common needs and characteristics

58
Q

How does Age and Gender influence consumer purchases?

A
  • different ages have different needs
  • Gender may influence purchases through mr mergers specifically targeting men or women to buy certain products
  • people may get judged or excluded for not buying a age/gender specific item
59
Q

How does Convenience influence customer purchases?

A
  • items that save time and are easier to use can provide a huge advantage to those marketing a product. Eg ready made meals
  • easier for people with busy lives but the price may be a lot higher for the product though.
60
Q

How does Ethical and Environmental considerations influence consumer purchases?

A

Ethics and standard that provide guidance on what is to be considered right and wrong.

  • many consumers may wish to purchase products that have been produced in a way which is consistent with their beliefs of what is right.
  • people may be judged for buying non-ethical products
  • does good to environment and society

Eg iPhone 8 red- % to charity

61
Q

Where does the government get it’s revenue?

A
  • Register (Regio tax) - car/road usage
  • income tax
  • GST (Goods and service tax)
  • Tarif (import tax)
  • Company Taxes
62
Q

Sources of Government Revenue Expenditures (where it spends tax)

A
  • Hospitals
  • Public And Private Schools
  • Roads
  • Police and Defence
  • Public Buildings
  • Centrelink - helps people in need
63
Q

What is Macroeconomic policy?

A

Government policy that effect the whole country

64
Q

What is the Macroeconomic Policy #1 -(Budget)

A 
Each year (usually May) the government puts a budget or budgetary policy that outlines the levels of tax and where it will be spent.
- A good budget aims to increase or maintain living standards
65
Q

What does Deficit mean?

A

The government revenue is less that the expenditure needed

66
Q

What does Balanced Revenue mean?

A

The government spends on what it had received

67
Q

What does Surplus mean?

A

The revenue tax is a lot greater than the expenditure done or is needed

68
Q

What is the Macro-policy #2 (RBA)

A

Reserve Bank of Australia aims to increase and maintain good living standards by controlling interest rate via the monetary policy

— it’s main power is change interest rate as a lever to adjust spending levels

  • doesn’t take instructions form government*
69
Q

What does micro policies do?

A

It usually forces on improving productivity or efficiency

In; Trade regulations, 
Deregulation’s, 
Labour Market reform, 
Privatisation of gov owned businesses, 
innovation policy, 
training and workforce development
70
Q

How are Immigration policies used to influence the economy?

A

The government can decide who can come into the country from overseas based on a criteria, this criteria can change based on economic needs.

71
Q

What are the 2 main views on migrants?

A
  • they are a workforce that consumes goods and services and Theodore adding to and making stronger the country’s economy.
  • they take jobs of Australian’s and place pressure on housing, roads hospitals and schools.
72
Q

How is the income distribution policy used to influence the economy?

A
  • Since all Australian citizens do not earn the same level of income the government has to distribute income so all have it fair in some way or another…

There are 6 policies for government income distribution

  • Provision of goods and services
  • Progressive taxation policies
  • Superannuation policy
  • Wages policy
  • policies to promote growth and raise living standards
  • Welfare payments
73
Q

Explain Welfare payments

A

The disabled support pensions, aged pensions and unemployment benefits are example of how the government distributes to the low income earners to live from people’s income.

74
Q

What is the provision of goods and services ?

A

The government funding of the public and private hospitals

75
Q

What is progressive taxation policies?

A

Income tax where those on a higher income pay higher tax than those with lesser income

76
Q

What is the Superannuation policy?

A

It compulsory Superannuation means employers must contribute to an employees Superannuation fund to provide funds for retirement

77
Q

What is the Wages policy?

A

The government sets the minimum wage that must be paid by employees, providing a safety net so that low paid workers cannot be exploited and can maintain a reasonable living standards.

78
Q

What is the policies to promote growth and raise living standards?

A

Budgetary policy that stimulates growth and therefore employment so more people can earn income programs and training to assist the unemployed to find a job.

79
Q

Why is there youth unemployment?

A
  • due to automation not much cashier, sales assistance and clerk positions are plentiful anymore for the ever growing youth population causing mass youth unemployment.
  • this makes it difficult to gain the needed work experience
80
Q

Effects of Youth Unemployment;

A
  • Increased Crime and addictions
  • Under-skilled workforce
  • psychological and physical effects in the body
  • homelessness

All of this decreases the living standards as it affects economic growth - GDP , Inflation and employment,ect

Year 10 Exam Revision (4 decks)

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