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A set of practice flashcards covering key concepts from the video notes on economy, GDP, inflation, globalization, policy, unemployment, and the housing crisis.
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What is an economy?
A system for how goods and services are produced and consumed.
What does supply mean in economics?
The amount of a good or service that is available.
What does demand mean in economics?
The quantity consumers are willing and able to purchase (demand for a good or service).
Give an example of a market economy.
A privately owned business where prices are determined by supply and demand; examples include the US and Japan.
What does GDP stand for?
Gross Domestic Product.
What is globalization (globalisation)?
The connection of economies through trade and communication; the way countries are connected through the economy.
What is GDP?
A measure of all goods and services produced in a country.
What is inflation?
A sustained rise in the general price level over time.
What is a mixed economy?
An economy with both government and private sector involvement.
What is a tariff?
A tax on imported goods.
What is fiscal policy?
Government decisions on spending and taxation.
What does the Consumer Price Index (CPI) measure?
The CPI measures changes in the price level of a basket of consumer goods and services purchased by households.
What is the Reserve Bank of Australia (RBA)?
Australia's central bank; it keeps money stable, sets interest rates, and aims to keep inflation under control.
What is the unemployment rate?
The percentage of people who are actively seeking employment but do not currently have a job.
How does the RBA use interest rates to manage the economy?
By adjusting rates to stimulate the economy (lower rates) or cool it down (higher rates); lower rates encourage spending and investment, while higher rates curb inflation, supporting economic stability.
What are the potential effects of high unemployment on living standards?
Lower living standards due to reduced household income, less spending, financial stress, and greater reliance on welfare and social services.
In the Cranbourne case study, what do unemployment 4.1% and CPI 2.4% imply for living standards?
Most adults are employed, but rising costs mean household budgets may be stretched, requiring careful financial management.
What factors contribute to the Australian housing crisis?
High demand, restricted housing supply, policy settings that favour property investment, urban population growth, limited land release, and tax incentives that encourage speculative buying.
What is the impact of the housing crisis on individuals?
Higher housing costs reduce disposable income, savings, and financial security.
What is the impact of the housing crisis on businesses and society?
Businesses face higher labour costs and reduced productivity; society sees greater inequality, reduced mobility, and higher reliance on welfare and strain on public services.
What are potential solutions to the housing crisis?
Increase housing supply; invest in social and affordable housing; zoning reforms for higher-density urban development; reduce or restructure investor tax concessions; strengthen rental protections.