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Business
humanities yr 9
| Question | Answer |
|---|---|
| What is economics | Deals with the production, distribution and consumption of wealth. Studies how individuals, businesses, governments, and nations make choices about how to allocate resources. |
| What are goods, services, needs and wants | Tangible items (can touch) Intangible (cannot touch) Necessities for life Desires (can live without). |
| Who are the 4 participants in the economy | Households, businesses, government, financial institutions |
| What is the economic problem and what are the 3 economic questions | There are unlimited wants but limited resources to meet those wants. What to produce? How to produce? For whom to produce? |
| What is opportunity cost | The value of the next best alternative that you give up when you make a choice. |
| What is fiscal policy and what is the purpose of it | Fiscal policy refers to government policy related to spending and taxation. The purpose of it is to influence the economy by adjusting how much it spends and how much tax it collects. |
| What is the federal budget | A plan that outlines the government's revenue and spending. |
| What is a balanced, deficit, and surplus budget | Government spending = government revenue. Government spending > government revenue. The government borrows money so it can spend more, especially during hard times like a recession. Government spending < government revenue. Gov collects more $ than it |
| Who provides banking services to the government and other banks | The Reserve Bank of Australia |
| What is monetary policy | Monetary policy is changing the official interest rate which ultimately changes the rate of interest paid on a bank loan. |
| What is the impact of high interest rates What is the impact of low interest rates | People must pay high interest on their loans and this lowers their spending. People can borrow at a lower interest and this increases their spending. |
| When does the RBA increase interest rates | when inflation is too high when the economy is overheating Or when they want people to spend less and save more. |
| When does the RBA lower interest rates | When the economy is too slow - There's a risk of recession. When unemployment is rising - People are losing jobs. Or when they want to encourage more spending and borrowing. |
| What does GDP stand for and what does it mean | GDP stands for gross domestic product and it's the total market value of all final goods and services produced within a country over a specific period of time. |
| What does a GDP increase and GDP decrease mean | GDP increase means the economy is growing GDP decrease means the economy is shrinking |
| Why is economic growth important | If more goods and services are being produced, this means that more people are being employed and paid. |
| What is recession What is a economic depression | Economic growth falls for two or more quarters in a row. Extreme recession, lasting two or more years. |
| What are advantages and limitations of GDP | Advantages - Easy to compare, tracks growth over time, helps government plan Limitations - Does not consider the impact of production on the environment, does not include nonmarket production |
| What does it mean to be employed What does it mean to be unemployed What is the unemployment rate | In a paid job for one hour or more in a week. Not in a paid job, but who are actively looking for work. The percentage of people in the labour force that are unemployed. |
| What does it mean to not be in the labour force | Not in a paid job, and not looking for work e.g. people who are studying, caring for family members (voluntarily), retired, or permanently unable to work. |
| Who does the labour force refer to | Both employed and unemployed people. |
| What is cycical, structural, and frictional unemployment | Cyclical is when the economy goes through ups & downs (the business cycle). Structural is when people's skills don't match the jobs that are available, or the jobs are in places far away. Frictional is when people are between jobs or just entering th |
| What is JobSeeker and JobKeeper | Jobseeker is a payment from the government to people who are unemployed and actively looking for work. Jobkeeper is a payment from the government to businesses to help them keep their staff during tough times (e.g COVID-19 lockdowns). |
| 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. |
| Reasons for Inflation - Demand-side Factors | Refers to the factors that impact consumers and causes the price of good and services to increase. This can happen when there is/are, Higher consumer spending due to wage increases or tax cuts. or Lower interest rates, which make borrowing cheaper. |
| Reasons for Inflation - Supply-side Factors | Refers to the factors that cause producers to increase their prices of goods and services. This can happen because of - Rising wages or labour costs, - Increases in the price of raw materials, or - Higher taxes on goods and services |
| What does CPI stand for and what does is measure | CPI stands for Consumer Price Index, and it measures the price change of a typical basket of goods and services purchased by Australian households every quarter. |
| If CPI goes up... If CPI goes down... | It means prices on average are increasing — this is called inflation. It means prices are decreasing — this is called deflation. |
| What are living standards and the 2 types of living standards | Refer to the level of wealth, comfort, material goods, and access to essential services available to people in a country. The 2 types of living standards are material and non-material living standards |
| What are material and non-material living standards | Material living standards are access to physical goods and services. Eg: income, housing and employment Non-material living standards are value-based elements of human wellbeing that are not connected to material possessions E.g personal happiness, |
| 4 reasons why living standards vary | - Government involvement - Natural resources - Labour productivity - Unemployment |
| What is global trade | The exchange of goods and services between countries. |
| What is an export and an import | An export is a good or service produced in one country and sold to another. An import is a good or service that a country buys from another country. |
| Examples of Australian exports | Goods: -Iron ore (mainly to China) -Coal -Natural gas -Gold -Agricultural products (wheat, beef, wool) Services: -Education (international students) -Tourism -Financial and business services |
| Examples of Australian imports | Goods: -Machinery and electronics (e.g., computers, phones) -Vehicles -Clothing and textiles -Fuel and refined petroleum Services: -Transport and travel -Communication and IT services |
| 4 reasons why countries trade | - Access products they don't produce themselves - Sell surplus goods - Get products cheaper - Build economic and diplomatic relationships |
| 3 negative impacts of global trade | - Environmental Damage - Exploitation of Workers - Job Loss in Local Industries |
| How does the government intervene in the market (5 ways) | 1. Social and legal frameworks 2. Maintain healthy competition between businesses 3. Providing public goods and services 4. Ensures income redistribution 5. Economic stability |
| What are the key roles of the RBA (5 roles) | 1. Controlling inflation through monetary policy 2. Setting the cash rate 3. Ensuring financial stability 4. Printing currency 5. Regulating payment systems |
| What is a trade surplus, deficit, and balance | exports > imports exports < imports exports = imports |
| Australia's top export partners | 1) China 2) Japan 3) South Korea 4) India 5) United States |
| Australia's top import partners | 1) China 2) United States 3) Japan 4) Germany 5) Thailand |
| Which region is Australia's most important trading region | The Asia Pacific Region |
| How did COVID-19 impact trade | - Border closures and grounded airlines shut down tourism, while supply chain delays caused shortages of imports. - Lockdowns led to downturns and closures in retail, hospitality, and other industries. |
| How did the Ukraine and Russia War impact trade | - Higher prices for fuel and energy. - Increased food prices. - Delays and increased costs for businesses. |
| How does trade war impact Australian trade | - Tensions reduced demand for Australian exports like iron ore. - Uncertainty over tariffs and restrictions create risks for businesses. |
| What is relative scarcity | Each participant must make decisions about how to best use their limited resources. |
| What are the three economic indicators | 1. GDP 2. Inflation 3. Unemployment Rate |
| How is unemployment and economic growth connected | Strong, inverse relationship between economic growth and unemployment. If economy is strong, more jobs so low unemployment. If economy is in recession, job loss and high unemployment rates. |
| What is the target rate for inflation | 2 - 3 % |
| What is the main economic problem we face | Scarcity - Limited resources and unlimited wants |
| List and describe the 4 key participants in the economy | Households provide labour and buy goods, businesses make and sell goods for profit, the government collects taxes to fund services, and financial institutions like banks keep money safe and give loans. |
Created by:
A-c-h
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