The Performance of the Australian Economy

what are the 4 indicators of the performance of the aus economy

standard of living, economic growth , income distribution and wealth, environmental sustainability

how is the standard of living measured

GDP per capita.

how to find GDP per capita

GDP / Population

define economic growth

the real growth in the volume (value) of goods and services produced by an economy over a time period

How is economic growth measured

GDP

GDP vs real GDP

real GDP is adjusted to inflation

GDP/economic growth formula

AD=C+I+G+(X-M)

What does AD stand for

Aggregate demand

What does C stand for

consumption

What does I stand for

Investment

What does G stand for

Government expenditure

What does X Stand for

Exports

What does M stand for

Imports

Define income inequality

the degree to which income is evenly distributed among people in the economy

define personal Income

the amount of funds that flow to individuals or households from the sale of factors of production over time

what does factors of production mean?

goods and services

how is income inequality measured

gini coefficent

what are the different forms of income

wages and salaries, profit from own business, net investment income (interest, rent, dividends), government pensions, private transfers (superannuation, workers compensation), child support

Define wealth

the value of a households total assets minus its liabilities

what are the different types of wealth

own home, other real estate, other financial assets (car, home contents, loans to others)

what is the gini coefficient

an index for the degree of inequality in the distribution of income. It ranges from 0 indicating perfect equality to 1 perfect inequality

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