commerce

What is the circular flow of income?

A model showing how money, goods and services flow between sectors of the economy.

What are the five sectors of the circular flow?

Households, businesses, financial institutions, government and overseas.

What do households provide to businesses?

Labour and other factors of production.

What do businesses provide to households?

Goods, services and income such as wages.

What is the role of the financial sector?

It collects savings and provides finance for investment.

What is the role of government in the circular flow?

It collects taxes and provides government spending and services.

What is the overseas sector?

The part of the economy involving imports, exports and international financial flows.

What is economic interdependence?

When different sectors of the economy rely on each other.

What is the business cycle?

The pattern of fluctuations in economic activity over time.

What are the four stages of the business cycle?

Expansion, peak, contraction and trough.

What happens during an expansion?

Economic activity, production, spending and employment generally increase.

What happens during a contraction?

Economic activity, production and spending generally decrease.

What is a recession?

A significant decline in economic activity.

What is demand?

The quantity of a good or service consumers are willing and able to buy.

What is supply?

The quantity of a good or service producers are willing and able to sell.

What happens to demand when price increases?

Demand generally decreases.

What happens to supply when price increases?

Supply generally increases.

What is equilibrium price?

The price where quantity demanded equals quantity supplied.

What happens when demand increases?

Price and quantity generally increase.

What happens when supply increases?

Price generally decreases and quantity increases.

What is the price mechanism?

The process where prices respond to changes in supply and demand.

What is a market?

A place or system where buyers and sellers exchange goods and services.

What is a shortage?

When demand exceeds supply.

What is a surplus?

When supply exceeds demand.

What characterised traditional Aboriginal and Torres Strait Islander trading?

Exchange of goods, resources, knowledge and services between groups.

Why was traditional trade important to First Nations peoples?

It helped communities access resources and strengthen relationships.

Why does government intervene in markets?

To correct market failures, protect consumers, promote competition and achieve economic and social goals.

What is market failure?

When a market does not efficiently allocate resources.

What is a tax?

A compulsory payment to government used to fund services and influence behaviour.

What is a subsidy?

Government financial assistance given to businesses or industries.

Why might governments regulate businesses?

To protect consumers, workers and the environment and ensure fair competition.

What is a sole trader?

A business owned and controlled by one person.

What is an advantage of a sole trader?

It is easy to establish and the owner keeps the profits.

What is a disadvantage of a sole trader?

The owner has unlimited liability.

What is a partnership?

A business owned by two or more people.

What is a company?

A separate legal entity owned by shareholders.

What is limited liability?

Owners generally only risk the amount they invested.

What is a franchise?

A business arrangement where a franchisee operates using another business's brand and system.

What factors influence business decisions?

Economic, financial, social, technological, legal, environmental and competitive factors.

Why is consumer demand important to businesses?

It affects what products businesses sell and how much they produce.

Why is competition important to businesses?

It encourages businesses to compete on price, quality and service.

How can technology affect businesses?

It can reduce costs, improve productivity and create new products and markets.

What is entrepreneurship?

The process of identifying opportunities and taking risks to create a business.

What is innovation?

Introducing new or improved products, services or processes.

Why is innovation important?

It can increase productivity, competitiveness and business growth.

What is business ethics?

Principles about what is morally right and wrong in business decisions.

What is corporate social responsibility?

A business's responsibility to consider its social, environmental and economic impacts.

What are examples of CSR?

Fair treatment of workers, reducing environmental damage and supporting communities.

Why can ethical behaviour benefit a business?

It can improve reputation, customer trust and long-term success.

Why do we have laws?

To maintain order, protect rights, protect people and property, resolve disputes and establish acceptable behaviour.

What is social order?

A stable society where people follow rules and laws.

How do laws protect individuals?

They protect rights, safety, property and freedoms.

Why are laws needed to resolve disputes?

They provide formal processes for resolving disagreements fairly.

What could happen without laws?

More conflict, crime, uncertainty and disorder.

What is Australia's court system?

A hierarchy of courts dealing with different types and levels of legal matters.

What is the highest court in Australia?

The High Court of Australia.

What is the role of the High Court?

It deals with important appeals and constitutional matters.

What is a court hierarchy?

Courts arranged from lower to higher levels of authority.

Why is there a court hierarchy?

To allow cases to be heard at appropriate levels and provide a system of appeals.

What does a judge do?

Interprets and applies the law and makes decisions in court.

What does a magistrate do?

Deals with less serious matters and conducts preliminary hearings.

What does a barrister do?

Represents and advocates for clients in court.

What does a solicitor do?

Provides legal advice and prepares legal matters.

What does a jury do?

It determines facts and, in criminal trials, generally decides whether the accused is guilty.

What is a jury?

A group of citizens selected to hear evidence and make decisions in certain court cases.

Why are juries used?

To allow members of the community to participate in the justice system.

What is common law?

Law developed through decisions made by judges in court cases.

What is precedent?

A previous court decision used as a guide for later similar cases.

What is stare decisis?

The principle that courts should follow established legal precedents.

What is statute law?

Law made by Parliament.

What is an Act?

A law passed by Parliament.

What is a bill?

A proposed law being considered by Parliament.

What is the difference between common law and statute law?

Common law is developed by courts; statute law is made by Parliament.

What is the basic process for a bill becoming law?

Bill introduced → debated → voted on → passed by both Houses → Royal Assent → becomes an Act.

What is Royal Assent?

Formal approval allowing a passed bill to become law.

What are the two major types of law?

Civil law and criminal law.

What is civil law?

Law dealing with disputes between individuals or organisations.

What is the aim of civil law?

To resolve disputes and provide remedies such as compensation.

What is criminal law?

Law dealing with offences against society or the state.

What is the aim of criminal law?

To punish offenders, deter crime and protect society.

What is the difference between civil and criminal law?

Civil law deals with disputes; criminal law deals with offences.

What is customary law?

Rules and practices developed from the customs and traditions of a community.

What is domestic law?

Law operating within a particular country.

What is international law?

Rules governing relationships between countries and international entities.

How can a law be assessed?

By its effectiveness, enforceability, fairness, accessibility and acceptance by society.

What is an effective law?

A law that achieves its intended purpose.

What is a fair law?

A law that treats people justly and appropriately.

What are values?

Beliefs about what is important or desirable.

What are morals?

Personal beliefs about right and wrong.

What is ethics?

Principles used to determine appropriate behaviour.

What are Australia's three levels of government?

Federal, state/territory and local.

What does the federal government deal with?

Defence, immigration, foreign affairs, taxation and national economic policy.

What do state governments deal with?

Schools, hospitals, police, public transport and major roads.

What does local government deal with?

Rubbish collection, local roads, parks, libraries and development.

What is a referendum?

A national vote to decide whether to change the Australian Constitution.

What is required for a constitutional referendum to pass?

A double majority.

What is a double majority?

A majority of voters nationally and a majority of voters in a majority of states.

What are key measures of economic performance?

Economic growth, unemployment and inflation.

What is GDP?

Gross Domestic Product — the value of goods and services produced within a country over a period.

What is economic growth?

An increase in the production of goods and services in an economy.