Falling levels of production, decreasing consumer spending, wage rates generally fall levels of unemployment rises.
Contraction
100
The price paid for the use of borrowed money
Interest rates
100
Australia's main measure of inflation
Consumer price index (CPI)
100
An upward movement of the Australian dollar (or any currency) against another currency
Appreciation
200
The quality of life measured by the quantity of goods and services available for consumption
Standard of living
200
identify four characteristics of a boom.
Income high
Production high
Interest rates high
Inflation high
Wages high
Consumer confidence High
Consumption is high
200
Interest rate is set for the entire term of the loan
fixed interest rate
200
The actual quantity of goods and services that may be bought with a given amount of money
Purchasing Power
200
The difference between the value of a nation's imports and the value of its exports
Balance of trade or terms of trade
300
1. Money that is flowing out of the circular flow of income
2. Money that is being placed into the circular flow of income
1. Leakages
2. Injections
300
Why does the RBA lower interest rates during a contraction in the economic cycle
Answers may vary
300
The interest rate moves up and down during the term of the loan
Variable interest rate
300
What is the effects of inflation on wage rates
real income decreases if wage rates do not keep up with the rate of inflation
300
What are the effects of a depreciation of the AUD on the amount of imports into Australia
Imports will significantly fall as our purchasing power falls due to the exchange rate
400
True of false - An economy experiencing Increasing investment, increasing export sales, increasing taxes and increasing government spending is an expanding economy
FALSE
400
An economic system in which individuals and businesses make their own decisions but with a large degree of government intervention
MIXED ECONOMY
400
The inability to repay borrowed money
Default
400
What rate does the RBA sustain inflation within
2-3%
400
True or false: The worldwide volume of foreign exchange trading is estimated at US$1.3 trillion per day.
TRUE
500
Come up to the board and draw the five sector economy with all headings
Five sector economy
500
Explain how the RBA conducts monetary policy
Answers may vary
500
You have just bought a house for 480,000. Calculate the monthly repayment if the interest rate was 8% over 25 years
480,000 X 0.08 X 25 = 960,000
960,000 + 480,000 = 1,440,000
1,440,000 / (25 X 12) = 4,800
500
What are the 6 causes of inflation
Cost factors, demand factors, profit factors, credit factors, overseas factors and government factors.