Economics

GDP

GDP

Stands for Gross Domestic Product, measures the total value of all the goods and services produced by a country over a specific time period (usually per annum). Measures the output of a country.

GDP per capita

Offers an average economic output per person, providing a perspective on individual income or prosperity.

Why is GDP important?

An increase of GDP indicates that a country’s economy is growing and helps gauge economic health.

What does economic growth lead to?

Increased consumer spending on goods/services, which improves living standards.

Recession

Economic growth (GDP) falls for two quarters (six months)

Depression

A severe recession lasting over two years, leading to high unemployment rates and low consumer confidence.

Inflation

An increase in the general level of prices for goods and services over a certain period.

Target inflation rate by RBA and Treasury

2-3%; anything lower is considered good enough.

Winners of inflation

High income earners, borrowers at fixed interest rates, and importers of goods.

Losers of inflation

Low to middle class earners, savers with low interest, and exporters.

Consumer Price Index (CPI)

Measures inflation by tracking price changes of a typical basket of goods purchased by average Australians.

Unemployment Rate

Percentage of the total labor force that is unemployed, indicating economic performance.

Causes of unemployment

Weak GDP, overseas competition, automation, and technology.

Fourth Industrial Revolution

Characterized by advanced automation where robots and AI outperform humans in various tasks.

What is predicted about jobs by 2030?

Approximately 800 million jobs are predicted to be lost to robots.

Super Jobs

Jobs that uniquely require human traits (for example, creativity and communication) plus the ability to use cutting edge technology

Economic growth

an increase in the about of goods/service produced and consumed per person within a specific period of time