Our Economy Flashcards
Define standard of living:
The degree of wealth and material security and comfort available to a person or community.
The better the standard of living, the better the economy.
Gross domestic product also suggests high standard of living.
List 4 weaknesses of GDP:
it is an average per capita so it assumes distribution is equal which it may not be
It does not consider environmental impacts such as pollution
Money spent on accumulating for crimes, legal fees and divorce are included is GDP so there is no distinction between good and bad economic activity
It is suggested it improves job opportunity but there is no evidence that humans are working longer hours rather just computers and machinery getting the job done instead
How does standard of living effect economic growth?
People are happier therefore more productive
Economic growth is determined by gross domestic product which is what standard of living is also measured in. It is assumed that increase is GDP means individuals are getting more material as it is averaged but this is not always the case.
How does standard of living effect economic growth
People are happier therefore more productive
Economic growth is determined by gross domestic product which is what standard of living is also measured in. It is assumed that increase is GDP means individuals are getting more material as it is averaged but this is not always the case.
What does it mean to have strong and sustainable economic growth?
It means having a rate of economic growth that does not have significant pressure on prices of goods and services so the ratio between income and prices increase together so even though inflation, people become richer too so necessities are affordable.
What is globalisation?
Globalisation provides the means for increased interaction between the consumers, producers, workers and governments in one country’s economy with their counterparts in the economies of other countries
Positive effects of globalisation are…?
Globalisation can be a driving force for economic growth
companies and workers become wealthier, and the standard of living improves.
negative effects of globalisation are…?
Globalisation can create unfair working conditions for many workers in poor countries. These workers may be forced to work long hours in unsafe and unhealthy factory environments for a very small wage
define consumer confidence
how consumers feel about the state of the economy
How has globalisation affected Australia?
Many Australian companies now operate internationally, increasing their profits by selling their goods and services worldwide
Globalisation has forced Australian farmers to compete at a global level to sell products such as wheat and wool
Overseas investment by Australian companies helps to create employment and wealth in those overseas countries
what is foreign investing
Direct foreign investment is when a firm or an individual establishes physical assets in another country.
In Australia, foreign investment is frequently in the mining, agriculture and tourist sectors.
what is business and consumer confidence measured by?
economic news
inflation
uncertainty
unemployment
real wages
personal debt levels
economic growth
what is gross world product (GWP)
The combined gross national product of all countries in the world
what is gross national income (GNI)
The sum of a countries gross domestic product + net income from overseas transactions
