Glossary
A widely accepted means of payment.
Money.
What is the population of Australia as of 2023? (Can be rounded to the nearest million)
26.66 million
Name at least 5 'Standard of Living' topics:
Housing, Income, Jobs, Education, Healthcare, Leisure Time, Life Satisfaction, Safety, Work-Life Balance, Environment
List the 4 Economic Indicators we have covered in class this term:
GDP, Inflation, Unemployment Rates & Sustainability Indexes
What does GDP per capita measure?
GDP per capita growth provides an understanding of average economic output per person
What does the term 'minimum wage' mean?
The lowest wage permitted by law or by a special agreement.
Based on the Australian Bureau of Statistics 2021 Census, roughly how many people experience homelessness on any given night? (Can be rounded to the nearest thousands)
120,000 people
_____________ refers to the quality of life of people in a country. It's influenced by how much money people make, what kind of healthcare they have access to, how good the education system is, and other factors.
Standard of living
What does GDP stand for, and what does it measure?
GDP is the Output from all sectors of the country. GDP growth reflects the overall economic activity within a country
GDP calculation: GDP = C + I + G + NX
C = Consumption (Consumer spending)
I = Investment (business spending on buildings land & equipment and consumer investments like buying homes)
G = Government Spending
NX = Net Exports (exports less imports)
Real GDP (Gross Domestic Product) is adjusted for inflation, providing a more accurate measure of economic output by reflecting changes in the quantity of goods and services produced, while nominal GDP is not adjusted for inflation and reflects the value of output at current prices.
In business terms, what does it mean by Q1, Q2, Q3 and Q4?
Q represents a quarter of the year. E.g. Q1 = the first 3 months of the year (Jan-Mar), Q2 = the next 3 months of the year (Apr-Jun), Q3 = the following 3 months (Jul-Sep), Q4 = the last 3 months (Oct-Dec)
According to Homes for Homes Organisation (2025), roughly how many people experience housing stress in Australia? (Can be rounded to the nearest thousands)
1.5 million people
The number of people who do not have a job but are actively seeking for one:
Unemployment Rate - This means that people who are unemployed but (e.g. people who are not looking for jobs don’t fall into this category - who have retired, stopped working to have children or are too sick to work).
Explain in detail, the economic indicator: Inflation
Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices.
The inflation rate of an economy, if positive, is the gradual devaluation of the value of money over time.
When inflation gets out of control, money is quickly devalued. That means you need a lot more money to buy the same things as before.
What is the most well-known indicator for inflation and define it.
The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households.
Some transactions put money into the economy - that is, money is being utilised elsewhere in the economy. These are called _______
Some transactions take money out of the economy. That is, money is not being utilised elsewhere in the economy. These are called: _______
injections.
leakages.
Which Australian industry attracts the biggest foreign direct investment?
Mining & Quarrying - $392b (33.2%)
What are the 4 main sectors of the Circular Flow of Income model?
Government, Household, Businesses & Financial Sector.
Why is it important to consider both economic benefits and environmental impacts when assessing industries like mining?
Remember: Sustainability is the ability to be maintained at a certain rate or level.
"The sustainability of economic growth"
avoidance of the depletion of natural resources in order to maintain an ecological balance.
Economic benefits like jobs and taxes are important, but environmental damage can have long-term effects that outweigh these benefits, such as habitat destruction and pollution, which affect future generations.
An individual decides to reduce their spending and save more of their income. Is this an injection or leakage? And what part of the circular flow model is this?
Leakage - Savings
What is a recession?
A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
During a recession, economic activity declines, leading to job losses, reduced consumer spending, and potentially lower stock prices, while interest rates may fall as central banks attempt to stimulate the economy.
Roughly, what is Australia's Gini Coefficient?
0.34 (34%)
Remember:
0 (or 0 %) = perfect equality
(smaller gap between rich and poor citizens)
1 (or 100 %) = inequality
(bigger gap between rich of poor)
What impact does high imports and high exports have on the economy?
High Imports can reduce demand for local products, lowering economy activity.
High exports increase demand for local products, raising economic activity.
Explain the relationship between economic performance and living standards.
Economic performance and living standards are closely linked, as a country’s economic health directly impacts the well-being of its citizens. Economic performance is typically measured using key indicators such as Gross Domestic Product (GDP), inflation, unemployment rates, and sustainability indexes.
When an economy is performing well—experiencing growth, stable prices, and low unemployment—living standards generally improve due to increased income, better job opportunities, and greater access to goods and services.
Higher economic performance allows governments to invest in essential services such as healthcare, education, infrastructure, and social welfare, further enhancing living standards. Conversely, poor economic performance, marked by recession, high inflation, or rising unemployment, can lead to lower wages, reduced spending power, and decreased access to quality services, negatively affecting people's quality of life.
Thus, while economic growth is not the only factor influencing living standards, a strong economy generally supports a higher quality of life, whereas economic decline can contribute to hardship and reduced well-being.
What are some limitations of using GDP as an indicator of standard of living?
The distribution of GDP is not captured in GDP measures(different people in a country have different levels of income and wealth)
The value of leisure is not included in GDP
The level, quality of, and access to health care is not measured in GDP
GDP is not adjusted for pollution or other negative effects of production
GDP is not adjusted for changes in crime and other social problems