Unit 3 AoS 2-Definitions Flashcards
Living Standards
General wellbeing of the average person in a given population affect by mat and non-mat aspects
Mat LS
Econ wellbeing affect by incomes and quantity of GnS consumed yearly, measured by GDP per capita
Non-mat LS
Wellbeing affect by quality of dail life affect by happy, leisure etc. - subjective bc depends on personal values
Economic Activity
Actions of indiv/firms/gov that helps generate production of GnS, employ and incomes to help satisfy N/W and improve LS
Business Cycle
Cyclical movement of nation’s level of production/EA
Measured by real GDP
Boom
Period of strong spending and above avg levels of EA - often rapid demand inflation and very low cyclical unemp
Disinflation
Slowdown in rate of inflation where prices rise more gently
Deflation
Neg inflation rates - falling of prices overtime
Domestic Econ Stability
Desirable/ideal level of EA where there is simultaneous achieve of the 3 DMG being price stability, SSEG and full employ
Stagflation
Slow GDP growth accompanied with high structural unemployment and rapid cost inflation
AD
Sum of spending on GnS produced by a nation over a year
AS
Total output of all GnS produced by a nation’s businesses at diff price levels measured over a period
In LONG term - output levels goverened by quantity and efficiency of resources available
Disposable Income
Spendable household income after gov welfare and tax payments
Interest Rates
Cost of borrowing credit influenced by RBA to affect credit sensitive (C) and (I)
Consumer/Business Confidence
Level of optimism/pessimism by households/businesses for future employ prospects and incomes/ future sales and profits
Exchange Rates
Value of currency when swapped for others
Overseas Econ Growth
General pace of production of trading partners and their BCD
Inflation
When prices paid for wide range of GnS are generally rising
Goal of Low and Stable Inflation
General GnS prices are rising fairly slowly with a target range of 2-3% a year avg, a rate consistent with achieving other gov goals to ultimately improve Aus LS
CPI
Measure of inflation/avg price levels in a basket of GnS measured over period of time, purchased by metropolitan households
Underlying Inflation Rate
Measured by removing volatile items affected by one-off events from CPI regimen, better reflecting true changes in price levels
Demand Inflation
When demand outstrips production because of little unused PC»_space; shortages of GnS»_space; prices rise to ration out scarce GnS among competing buyers
Cost Inflation
Rising costs of production are passed onto consumers which cause prices to rise so firms can protect profits
Goal of Strong and Sustainable Econ Growth
Fastest rate of growth in a nation’s production consistent with low inflation and other gov goals, annual rise of 3% growth avg, where AS is able to keep up with AD
