Year 12 Economics Lecture Notes

These flashcards cover key economic terms and definitions relevant to Year 12 Economics, encompassing growth, stability, and policy.

Economic Growth

An increase in the value of goods and services produced by an economy over time, typically measured by a percentage change in real GDP.

Unemployment

The condition where individuals who are capable of working and are actively seeking work are unable to find employment.

Inflation

A general increase in the price level of goods and services in an economy over a period, leading to a decrease in purchasing power.

External Stability

A situation where a country can meet its financial obligations to the rest of the world, characterized by sustainable levels of foreign debt and a balanced current account.

Distribution of Income

The way in which a nation’s total income is distributed among its population.

Environmental Sustainability

Economic development that is conducted without depletion of natural resources, ensuring ecological quality and health for future generations.

Global Economy

The interconnected economies of nations that influence and are influenced by trade, investment, and economic policies worldwide.

Gross World Product (GWP)

The total value of all goods and services produced in the world in a specific time period, combining the GDP of all countries.

Transnational Corporations (TNCs)

Companies that operate in multiple countries, often influencing global trade and investment flows.

Free Trade Agreements (FTAs)

Formal agreements between two or more countries to reduce trade barriers and promote trade.

Protectionism

Government actions and policies that restrict international trade to protect domestic industries from foreign competition.

Macroeconomic Policy

Policies that affect the overall economy, focusing on aggregate indicators such as GDP, unemployment rates, and inflation.

Microeconomic Policy

Policies that target specific sectors of the economy to increase productivity and efficiency.

Commodity Prices

The market price for raw materials and primary goods, which can fluctuate based on supply and demand.

Balance of Payments

A record of all economic transactions between residents of a country and the rest of the world over a specific period.

Relative Exchange Rate

The value of one currency in comparison to another, determining the purchasing power of the currency in international markets.

Labour Market Policies

Government regulations and programs intended to influence the market for workers and job seekers.

Human Development Index (HDI)

An index measuring overall human development based on life expectancy, education, and per capita income indicators.

Gini Coefficient

A measure of income inequality within a population, ranging from 0 to 1, where 0 indicates perfect equality.

Cyclically Adjusted Government Budget

A fiscal budget that accounts for the effects of the economic cycle, reflecting government revenue and expenditure at full economic capacity.

Business Cycle

The cycle of economic expansion and contraction that occurs in economies over time.

Aggregate Demand

The total demand for all goods and services in an economy at a given overall price level and in a given time period.

Aggregate Supply

The total supply of goods and services that firms in an economy plan to sell during a specific time period.