Macroeconomics

Material Living Standards

Material living standards are measured by the total number of goods and services available per capita (per person).

Non-material living standards: Def


affect a person’s quality of life irrespective of income.

Gross Domestic Product (GDP):


the value of all goods and services produced in an economy within a specific time frame.

Economic indicators


are statistics used to predict future trends in a nation’s economy.

Current inflation Rate

2.1%

Target inflation rate

2-3%

Current Unemployment rate

4.2%

Target Unemployment rate

4-4.5%

Current GDP Rate

2.1%

target GDP Rate

3-3.5%

Imports

Households can choose to purchase goods and services from global markets, instead of the Australian market.

Exports

Many businesses sell goods and services to overseas customers as well to Australian households.

Economic


Economics is the study of how individuals, businesses and the Government make decisions about the way we use scarce resources to fulfill societies needs and wants.

Macroeconomics 


is a branch of economics that studies the behaviour and performance of an economy as a whole. The performance is measured by different indicators such as employment and inflation.

microeconomics


is a branch of economics that studies the consequences of individual decisions made within the economy. 

opportunity costs


Opportunity cost relates to the benefit of value that wasn't chosen (i.e. given up) in one area when resources are allocated or diverted to their next best alternative use.

Ceteris Paribus: 


Means “all else being equal.” It helps us study cause and effect in economics by freezing other factors so we can clearly see how one change impacts another.

Inflation

is the sustained increase in the general level of prices for goods and services over time, which reduces the purchasing power of money.

Relative Scarity

Relative scarcity is when the resources available for production are limited, compared to people’s unlimited needs and wants.