Economics & Business Exam Revision

Chapters 1,2,3,4,5,6

Goods and Services

physical objects, natural or manufactured, that command a price in the market

Demand

When only the price of the product itself changes, we say there is an increase or decrease in the quantity demanded, and a movement along the demand curve

Supply

The law of supply states that the quantity of goods supplied by a producer will increase in line with the movement in price of that product.

Economic Scarcity

The problem of limited resources being available to satisfy unlimited wants

Exports

Money enters Australia to pay for the exports.

Imports

Money leaves Australia to pay for the imports

Balance of Trade

The value difference between exports and imports

Expansionary and Contractionary Budgetary and Monetary Policy

Government or RBA actions to stimulate or restrict economic activity

Recession

A significant drop in economic activity, usually over two quarters

Unemployment

Those who are employed but are available and want to work more hours than they do.

Structural Unemployment

Workers’ skills are not needed by available jobs, often due to changes in how the economy is structured and operates. E.g. many manufacturing workers have been replaced by machinery & robotics, which results in unemployment if workers are unable to retrain for new positions

Cyclical Unemployment

Changes in the economic cycle, such as a downturn in the Australian economy. E.g. less spending leads to a drop in demand for workers producing goods and services, and job losses

Frictional Unemployment

When people are leaving one job to look for another, there will often be a short time of unemployment before a new position is found

Seasonal Unemployment

Factors usually related to the climate or seasons that cause some workers to be out of work at certain times of the year. E.g. cherry pickers are very busy during the summer months, but may struggle to find work at other times of the year

Long

term unemployment

Underemployment

Being employed part

Inflation

When the average price level of goods and services rises over time.

Opportunity Cost

The lost benefit of when making a choice over another.

Entrepreneur

Someone who launches and manages a business with risk

Innovation

Creating or improving products, ideas, or methods

Competitive Advantage

A business’s ability to perform better than competitors

Types of Industries

Groupings like primary (natural), secondary (manufacturing), tertiary (services), and quaternary (knowledge)

Types of Economic Resources

Inputs including land, labour, capital, and enterprise

Interest Rates

The cost of borrowing or return on saving, usually expressed as a percentage

RBA

Australia’s central bank is responsible for setting monetary policy and maintaining financial stability

Consumer Confidence

The level of optimism households feel about their financial situation and the economy

Fair Work Commission

Australia’s national workplace relations tribunal, responsible for setting minimum wages and resolving disputes

Union – ACTU

The peak body representing Australian trade unions and advocating for workers’ rights

Stakeholders

Individuals or groups with an interest in the decisions and performance of a business

GDP

The total market value of all final goods and services produced in a country over a set time

GDP per capita

A measure of a country’s economic output divided by its population

Digital Disruption

The transformation of industries and markets through digital technologies

Globalisation

The increasing interconnectedness of economies, cultures, and populations worldwide

Job Security

The likelihood that an individual will keep their employment over time

Economic Growth/Decline

A rise or fall in the level of goods and services produced over time

Material Living Standards

Access to physical goods and services that improve quality of life

Non

material Living Standards

Corporate Social Responsibility

Business practices that consider social, environmental, and ethical impacts

Enterprising Culture

A mindset that encourages innovation, risk

Contraction

Economic growth is slowing (GDP growth starts to fall) as consumers spend somewhat less and producers begin to slow output.

Boom

The economy is growing very rapidly, with very high GDP growth, very low unemployment and rapid increases in prices (Inflation).

Recession

GDP decreases (shrinks) for two consecutive quarters because spending by consumers has fallen rapidly and output by producers has dropped.

Expansion

Economic conditions are improving as the economy recovers from a recession. GDP growth rises slowly due to more spending and output.