Year 10 Economics - Government

Macroeconomics

The study of the economy as a whole, focusing on national trends like inflation and GDP

Microeconomics

The study of small, individual parts of the economym like a single business or household

GDP (Gross Domestic Product)

The total value of all goods and services produced in a country in one year

GDP Per Capita

The average wealth per person (the total GDP divided by the population)

Inflation

When the general price of goods and services keep rising over time

Disinflation

When prices are still rising, but at a slower rate than they were before

Deflation

When the general price level of goods and services actually goes down

Unemployment

When a person does not have a job, but is available and actively looking for one

Underemployed

When someone has a job but wants more hours, or their job doesn’t use all their skills

Fiscal Policy

How the government uses spending and taxes to influence how the economy is doing

Expansionary Policy

A “speed up” policy where he government spends more or cuts taxes to boost the economy

Contractionary Policy

A “slow down” policy where the government spends less or raises taxes to cool down the economy

Budget Deficit

When the government spends more money in a year than it collects in taxes

Budget Surplus

When the government collects more money it taxes than it spends

Direct Tax

Tax taken directly from a person’s earnings (e.g. Income Tax)

Indirect Tax

Tax added to the price of goods and services that you buy (e.g. GST)

Transfer Payment

Money given by the government to people (like a benefit or pension) for no work in return

Business Cycle

The natural “ups and downs” of the economy over time (Peaks and Troughs)