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Business and Economy
Year 9 Humanities
| Term | Definition |
|---|---|
| Economics | Study of how people use limited resources to meet unlimited wants. (Choosing how to spend your $20 ) |
| Scarcity | When there are not enough resources to satisfy everyone’s wants. ( A shop has limited stock. ) |
| Opportunity cost | The next best thing you give up when making a choice. ( Spending money on ads instead of equipment. ) |
| Inflation | A general increase in prices paid for goods and services over time. ( A businesses costs increase) |
| Consumer | A person who buys or uses goods and services. ( A customer buying a product. ) |
| Unemployment | When people who want and can work cannot find a job. |
| Living standards | The level of material well-being and quality of life people have. ( People can afford better housing. ) |
| Microeconomics | The study of how individuals/ households, and businesses make decisions about buying, selling, and using resources |
| Macroeconomics | The study of the economy as a whole. It looks at large scale issues that affect an entire country |
| Why is the government changing income tax is a macroeconomic decision? | it affects the whole economy, particularly consumer spending and aggregate demand. |
| Import | A good or service that a country buys from another country |
| Export | A good or service produced in one country and sold to another |
| One benefit of imports for Australian consumers | by providing greater variety and choice, while also increasing access to cheaper goods. |
| One possible cost of imports for Australian workers or businesses. | Imports can increase competition for Australian businesses, potentially causing job losses for Australian workers. |
| Fiscal policy | Refers to government policy related to spending and taxation |
| Monetary Policy | The action a country's central bank takes to control the money supply and interest rates to keep the economy stable |
| What are the 4 key participants in the economy ? | Household, Businesses, Government and Financial sector |
| Households role in the economy | Provide labour, earn income, and consume goods and services |
| Businesses role in the economy | Produce goods and services, employ workers, and invest |
| Government role in the economy | Collects taxes, provides public services, and manages the economy |
| Financial sector role in the economy | Provides savings, loans and investment to households and businesses |
| explain the opportunity cost of the government reducing a tax instead of keeping the tax unchanged | The next best alternative it gives up. By reducing the tax, the government collects less revenue. This means it may have less money to spend on services such as schools, hospitals or roads. |
| Why does scarcity force households, businesses and governments to make choices ? | Scarcity means limited resources and unlimited wants, so households, businesses and governments must choose how to allocate resources, creating an opportunity cost when one option is chosen over another. |
| Why is the government changing income tax a macroeconomic decision ? | Changing income tax affects households’ disposable income and spending, which can influence the overall economy, such as economic growth and inflation. |
| Evaluate the claim that global trade benefits everyone equally. | It doesn't benefit everyone equally: consumers get lower prices and more choice, but Australian workers may lose jobs from foreign competition. However, trade can create export opportunities and economic growth, so its impact depends on the industry |
| How an increase in the official cash rate may affect household spending | An increase in the cash rate raises interest rates, making borrowing more expensive. Households have less disposable income after higher loan repayments, so spending decreases. |
| How a temporary reduction in fuel excise may affect households and businesses. | A temporary fuel excise cut lowers fuel prices. Households have more disposable income, so they may increase spending. Businesses face lower transport and production costs, which can increase profits and investment. |
| How higher fuel prices can create a flow-on effect from businesses to households | Higher fuel prices increase businesses’ costs, so businesses may raise prices of goods and services, increasing households’ cost of living. |
| How a tax change may alter the relationship between government, households and businesses. | A tax change affects government revenue, household spending and business profits. Higher taxes reduce household income and spending, may lower business sales, and increase government revenue. |
| Cyclical unemployment | Happens when the economy goes through ups and downs (a business cycle) eg. a recession |
| Structural unemployment | Happens when people's skills don't match the jobs that are available, or the jobs are in places far away |
| Frictional unemployment | Happens when people are between jobs or just entering the workforce |
| How can a skills mismatch exist at the same time as high job vacancies ? | A skills mismatch occurs when workers’ skills don’t match employers’ needs. Therefore, job vacancies can be high because available workers lack the skills required for those jobs. |
| How can rising fuel prices contribute to inflation in Australia ? | Higher fuel prices increase transport and production costs for businesses. Businesses may pass these higher costs onto consumers through higher prices. This increases the overall price level, contributing to inflation. |
| How can inflation reduce the purchasing power of a household whose income does not rise ? | Inflation causes prices to rise, so the household’s unchanged income can buy fewer goods and services. Therefore, the household’s purchasing power decreases. |
| Identify two groups that may be affected by higher fuel prices and explain one effect on each. | Households: Higher fuel costs reduce disposable income, leaving less money for other spending. Businesses: Higher fuel costs increase operating costs, which may lead to higher prices for consumers. |
| material living standards | refer to access to goods and services and income |
| non-material living standards | refer to quality of life, such as health, leisure and relationships. |
| One material effect of rising fuel prices and example | Higher fuel prices increase household expenses, leaving less money for goods and services. ( a family spends more on petrol and less on groceries.) |
| One non- material effect of rising fuel prices and example | Higher fuel prices can reduce quality of life. ( a family may avoid driving to visit friends or go on holidays.) |
| What are the potential costs of reducing the fuel excise? | Lower fuel prices, but less government revenue and more pollution. |
| What are the potential benefits of reducing the fuel excise? | Lower fuel prices, reduces cost of living, and lowers transport and business costs |
| Which choice would be the most effective for the government to implement. | Reducing the fuel excise would be most effective because it quickly lowers fuel prices and helps households and businesses with rising costs. |
| How can reducing the fuel excise slow inflation | It lowers fuel prices, reducing transport costs for households and businesses. This can lower the cost of goods and services, helping slow inflation. |
Created by:
angel_123