Commerce 24

Commerce Notes

Money

Five characteristics of money:

1. Divisible:

* People buy goods and services valued at different prices.

* Money needs to be available in different amounts. (eg. If a person buys a CD for $20, but hands a $50 dollar note to the salesperson, the customer is given $30 in return)

2. Portable:

* People move to various places, so it’s important that money can be easily taken around.

3. Durable:

* Aus money notes are made from polymer (plastic). Before 1992, notes were made of paper, but they only lasted for about 6 months.

* Polymer notes last for 40 months. As money changes hands frequently, it must last and be durable.

4. Scarce:

* Scarce means limited in amount.

* Money only holds value if it is in limited supply.

* Money is limited because the Royal Aus Mint controls the money supply.

* The problem of inflation (meaning increase in the overall level of prices) arises when too much money is available.

* If money is printed to overcome a money shortage, inflation may occur

* With inflation, a fixed amount of money buys fewer goods and services than it did previously.

5. Acceptable:

* Money must be accepted by everyone.

* Trade will not occur if any incorrect money unit is used.

* All people involved in trading products worldwide must agree that the money unit is acceptable.

Define money: A medium of exchange that is centralised, generally accepted, recognised and facilitates transactions of goods and services.

Define legal tender/what is considered legal tender in Australia?

Legal tender refers to all US coins and currency issued by the government. All existing Australian banknotes are legal tenders.

Money that is accepted by the government of the day.

Which bank is able to issue banknotes in Australia?

The reserve bank.

Where are coins produced?

A mint that manufactures coins.

Earliest forms of money: Cowries shells, copper ingots, rum, gold coins, colourful pieces of paper.

Timeline of the development of money:

Outline the 2 forms of money that exist in modern economies:

* Coins and banknotes (physical currency)

* Deposits held in accounts at banks or other authorised deposit - taking institutions (digital currency)

The functions of money:

1. A medium of exchange:

* Money is a quick and convenient way of making payments compared with barter (to trade goods and services in return for other goods or services), which can be time-consuming and complex

2. A standard of value:

* money measures the value of items

* Prices are attached to goods and services when there is a common denominator

* With information about prices, people can make comparisons and calculate what we can afford to buy

3. A store of value:

* Money gives people the option of saving now and spending in the future

* Eg. money can be saved in a bank account, where interest is earned on the investment

4. A means of deferred payment:

* Money can be bought on credit, meaning that we can have the goods now and pay for them later

How do we get money?

1. Income from labour:

1. Wages and salaries

* Are received by people such as teachers, bank tellers and shop assistants

* An employee is a person who works for another person, for a firm or for a Government

* Some jobs have award wages, which are lowest wages employers can legally pay to people doing particular jobs

* Award wages make sure that there is justice and fairness in the amount of money people are paid for work

* Trade unions act on behalf on individual employees in the discussions and activities leading to decisions about award wages

2. Fees

* Are changed by people such as doctors, dentists and solicitors who are self employed

* This is the cost of the service they provide

3. Commissions

* Are received by business people who act on behalf of another person eg. real estate agents, stockbrokers, employment agencies and some sale representatives

* This income represents a percentage of the transaction

4. Profit

* Business man/women

* Accountant, financial worker, entrepreneur

5. Interest

* Reward for saving

* Eg. If you put money into a particular bank and don’t touch it for a month, the bank deposits a percentage of what you have into your account. Not normally a big percentage (1% or 2%)

6. Inheritance

* Left to individuals in a will

7. Dividend

* Reward for being a part owner of a company (ie. part of the profit)

2. Income from land:

* Democratic society = allowed to own private property eg. land and buildings

* Used to earn an income by renting to others

* In return, the property owner receives a payment called rent, which is the property owner’s income

3. Income from lending money

* Money not needed at present can be deposited in a bank or other financial institution

* May lend it to the government by buying government bonds or lend it to a public company by buying debentures (a receipt or certificate that acknowledges a debt, which you give someone who loans you money)

* The income received from this money is called interest

* People who have large amounts of money to lend may earn enough interest to support themselves and their families

4. Income from buying shares

* People with surplus money may buy shares in public companies listed on the Stock Exchange (this way, they become part owners of the company)

* Shareholders are entitled to share in the profits of the company

* Payment from the company’s profits are called dividends, which are normally paid once a year

5. Income from owning a business

* People own their own businesses which they hope to make a profit

* Profit is the amount left over when all the expenses of the business have been paid

* The owner usually expects to make more income than he or she could earn as an employee

* The high income is the reward for the risk, worry and long hours, yet not all business owners make big profits

* Profit = sales - expenses (revenue)

6. Income for people who cannot work

* People who have a disability, are too old or simply unable to find a job still need to be provided with a basic income to allow them to buy food, clothing and shelter

* In Australia, the Commonwealth Government provides this income, known as security benefits, which can also be called transfer payments or social welfare

* Money for these benefits comes from taxes

* These payments provide a social safety net (refers to the various government benefits, programs and supports that protect people from extreme poverty during various changes in their lives

* Unemployed - (dole) - Job Seekin payments (changed during covid)

* Payments are distributed through centrelink

* Payments are made into a bank account

Examples:

* Babies, elderly, disabled = income for people who cannot work

ECO resources:

* Land - RMs

* Labour - IT specialists

* Capital - machine

* Enterprise

Travel

Tourism

Definition: tourism is a social, cultural and economical phenomenon which entails the movement of people to countries or places outside their usual environment for personal or business purposes

Type of tourist destinations:

Tourist destination

Examples

Cultural and historical site

Rome, europe

Coastal resort

Gold coast, hawaii

Centre of entertainment

Disneyland, las vegas

Ecotourist site

GBR

Place of pilgrimage

rome

Ski resort

Swiss alps

Definitions of types of tourism:

Cultural tourism

Visit places around the world because of it’s cultural or historical significance

ecotourism

All nature based forms of tourism that support an appreciation of nature and the cultural traditions within them

Recreational tourism

Tourism done for leisure purposes

Mass tourism

Large amount of people visit a particular place throughout the year

Sports tourism

People visit a place because of anything of sporting significance in the area

Religious tourism

People go to the places of religious significance

Health tourism

A person will travel to improve their health

Adventure tourism

People who live for thrill and adrenaline

Business tourism

Tourism related to work and conferences

Culinary tourism

Food in the area, wanting to learn to cook certain things

voluntourism

Tourism that involves doing community or environmental work

Planning a trip

Personal factors = culture, history, national beauty and familiar ties (travelling with friends and family, personal reasons may include age, education and cultural background)

Eg. visiting family, shopping, age, education, health

Political factors = happens when there's no political rest. If the region is experiencing political instability, citizens may decide to flee the country.

Eg. civil unrest, type of government, persecution

Financial factors = choosing accommodation, places they travel and standard tourist activities. Some people take out a loan so they can enjoy their holiday and then pay the bank back eg. destination, accommodation, length of stay, budget

Eg. affordable package deals, low interest rates, economy

Advantages and disadvantages of the different means of travel

Means of travel

Advantages

Disadvantages

road

* Leave whenever

* Stop whenever

* No limit of items

* Traffic

* Petrol

* longer

rail

* Less traffic

* Less CO2

* Reply on someone else for safety

* If you miss your train you may be late

air

* quick

* Weather

* Weight limit

* No pets

sea

* Time efficient

* Sea sickness

* weather

Group travel

Advantages = costs (cheaper), safety in numbers, sharing experiences, organisation of activities

Disadvantages = lack of privacy, conflicts, clash of ideas

Individual travel

Advantages = time to yourself, making new friends

Disadvantages = safety, feeling lonely

Sources of information

Sources of information used to identify appropriate travel destinations:

* Travel agent

* Magazines

* Travel brochures

* Social media

* Newspaper

* TV

* Family

* Friends

* Colleagues

Key Travel considerations

1. Health issues

* Covid 19, M pox

2. Language barrier

* Google translate, duolingo

* Conventional signs

* Phrase books

3. Travel insurance

* Protection - to cover misadventure (miss flights, lost baggage, ill health, accidents)

4. Dangerous areas

* Threat + civil unrest

5. Departure tax

* Save enough local currency to pay government charges when leaving the country

* Passport must have 6 months of validity left to be able to travel

* Passports are not required for domestic travel (travel within the country)

* Tourist must follow local laws in a foreign country

Travel insurance

5 major companies that offer travel insurance to australian tourists:

* Cover more

* Iselect

* Travel direct

* NRMA

* AIMEE

1. Understand situation - tailor individual policy (particular item coverage, destination, duration, activities)

2. Insurance is a form of protection (age, pre existing conditions)

3. Compare different policies to get the best extras

Tourist entry in the USA

1. Confirm your passport meets program requirements

2. Complete ESTA application online

3. Pay fees required

Tourist visa = do not permit employment, but can get into most countries for up to 90 days

Work visa = enable you to legally work in a foreign country and gain professional experience

Student visa =

Impacts of COVID on passport services

* Harder for australians overseas to apply for passports

* Must practice social distancing and hygiene

Change name on passport

* Name in passport will be the name of your full Australian birth certificate

* Can change the name on your passport if you registered it on your most recent passport

Replacement/renewal passport

* A replacement passport is either free with reduced fees and only valid for as long as the passport it is replacing

* Renewal passport if the standard fee and lasts for 5-10 years

Airport:

* Nancy bird walton

* The idea for a 2nd airport came in 17th feb 1986

* We need another airport because Kingsford Smith is overcrowded

* Lots of people live in the inner west

* Jobs - income - higher standard of living - economy booster

* Allows connectivity

* Finished end of 2026

* Capacity is 10 million people by 2050

* The australian government is responsible for wsi

* Positive impacts = Generate a significant number of jobs for people in western sydney, more airport access for people

* Negative = Significant impacts on the environment, including wildlife, trees and pollution In the air

Medical tourism

ADVANTAGES/BENEFITS

DISADVANTAGES/COSTS

Cheaper

Lack of qualifications

Mix of medical & recreational

Quality of care

Access to a variety of procedures

Complications - infections, wound breakdown

No wait time

Language barrier

Unforeseen costs

Airport security

1. Passport:

* E passport

* Security chips (fingerprint, face scan)

* To check criminal records, data of who is leaving and entering the country, eliminate the wrong people from getting on a flight

2. Metal detectors

* Hand luggage on a conveyor belt scanner

3. Explosive test

* Detection wand