Commerce Important Topic

Law of Supply

the higher the price of a good or service, the greater the supply provided for the good or service

Law of Demand

the higher the price of a good or service, the lower the quantity for the good demanded

what is demand influenced by

disposable income

price of substitutes and complements

consumer tastes

advertisement

fashion

technology

5 sectors of Australian Economy

Firms

Household

Financial

Government

Overseas

business cycle

shows the fluctuating levels of economic activity in an economy over a period of time

4 factors that affect the australian economy

How many people per business

Micro business: Less than 5

Small: 5-19

Medium: 20-199

Large: 200

price mechanism

the forces of of demand and supply in determining the price and quantity of a good or service

Types of businesses

Global business

Offshore business

Government business

Not-for-profit business

Aggregate demand

AD= C + I + G + (X-M)

C = Consumption

I = Investment

G = Government Spending

X = Exports

M = Imports

Gross domestic product

the total market value of final goods and services produced by a country over a period of time

4 types of income

macroeconomics

the study of the behaviour and performance of an economy as a whole to understand the level of total expenditure, how it is influenced and the impacts on: output, income, employment and material living standards.

fiscal policy

a government policy that involves altering the level of government spending and government revneue through the document of budget which shows the government plans on receiving money and where it plans to spend that money

monetary policy

a policy operated by the Reserve Bank of Australia (RBA) that seeks to manage the level of spending in the economy