Humanities - economics

Economy

The system of production, distribution and consumption of goods and services

Household Sector

Individuals and families who consume goods and services and provide labour

Business Sector

All of the organisations that produce goods and services

Resources

Inputs used to produce goods and services: land, labour, capital and enterprise

Land

Natural resources used in production

Labour

Human effort used in production

Capital

Tools, machinery and buildings used to produce goods and services

Enterprise

The ability to combine resources to produce goods and services and take risks

Goods and Services

Physical items and activities that satisfy needs and wants

Supply

The amount of a good or service producers are willing to sell at a given price

Demand

The amount of a good or service consumers are willing to buy at a given price

Salary

A fixed regular payment, typically monthly, for professional or office work

Wage

Payment based on hours worked or output produced

Financial Sector

Institutions that manage money, including banks and superannuation funds

Financial Intermediaries

Institutions that connect savers and borrowers, helping money flow through the economy

Borrow

To receive money with the agreement to repay it later, usually with interest

Superannuation Funds

an account that invests workers earnings given by employers for retirement

Investment

act of putting resources or money into something to make profit

Mortgage Loan

A loan used to buy property, secured by the property itself

Government Sector

Provides public services and collects taxes to fund them

Globalisation

The increasing connectedness of countries through trade, communication, culture and technology

TNC

A company that operates in more than one country

Cyclical Unemployment

Job loss due to economic downturns or recessions

Seasonal Unemployment

Job loss due to seasonal changes in demand

Structural Unemployment

Job loss due to skills not matching available jobs from changes in economy or technology

Frictional Unemployment

Short term unemployment during job transitions

Hidden Unemployment

People not actively seeking work but would accept a job if offered

Enterprising Behaviour

Taking initiative, being innovative and solving problems creatively

role of government sector in the economy

provides public goods and services, redistributes income and regulates markets

taxes collected by the federal government

Income, company and goods and services tax

Areas funded by the Australian government

Healthcare, education and infrastructure

Four factors that can influence markets

consumer preferences, income, price and government policies

Opportunity cost

the lost value of the next best alternative when a decision is made

Benefits of globalisation

Access to cheaper goods, export opportunities and variety

Negatives of globalisation

Local businesses compete with cheaper goods, environmental damage and job loss

Markets

any organised exchange of goods, services or resources between buyers and sellers

Trade

voluntary exchange of goods or services between two or more parties

Impact of trade in economy

encourages increased productivity, job creation, and economic prosperity

Import/export impact on economy

generate national income, supports employment in sectors, strengthen trade relationships

How to reduce unemployment

job creation programs - investing in infrastructure, education and training - courses and apprenticeships helps people gain skills for industries

Impact of long term unemployment

skill deterioration, reduced self esteem, lower productivity, reduced consumer spending

How trade helps Australia’s economy

supports key industries, export income, creates jobs, global competition encourages efficiency