Definitions +
Income and wealth💰
Marketing💶
Circular flow of income💸
GDP💲
100
GDP (Gross Domestic Product)
The total output produced within a country’s border.
100
What is income inequality?
The uneven distribution of income between members of the society
100
Name the four types of market segmentation
Geographic, demographic, psychographic, behavioural
100
What are the two types of economy?
•Closed economy: an economy that does not trade with other economies
•Open economy: an economy that is involved in trade with other economies
100
What does GDP stand for?
Gross Domestic Product
200
If Australia's exports (X) are greater than its imports (I), would the Australian economy be shrinking or growing?
Growing.
200
Why do we prefer a low Gini coefficient?
Because the higher the Gini coefficient is, the further away from equality we are.
200
Identify and explain the target market for an acai bowl.
Might include:
health-conscious individuals looking for nutritious, fast-food alternatives.
200
What does the circular flow of income show?
It shows how income, spending and output move around an economy
200
What are the four components of GDP?
Consumer Spending
Investments
Government spending
Net Exports
300
Inputs
Inputs are what is used in the production process to produce output. E.g. Flour +water creates bread
300
Policies to re-distribute income and wealth
Minimum wage
Transfer Payment
Progressive tax
300
Give two examples of behavioural segmentation.
Marketing based on:
- Purchasing habits.
- Customer loyalty.
- Brand interactions
300
How many injections and withdrawals are there in total?
3+3=6
300
What is "Net Exports"
The value of its exports - the value of its imports
400
Outputs
Output is the result of an economic process that has used inputs to produce a product or service that is available for sale or use somewhere else. Such as
400
How does income inequality affect economic growth?
It slows down the economic growth by increasing poverty and unemployment.
400
Bonus: What is the first country to see the sunrise each day?
New Zealand (specifically the Chatham Islands)
400
Explain the 3 injections.
•Investment (I). Money invested by firms into purchasing capital stock.
•Exports (X). Money coming from abroad to buy domestically produced goods.
•Government spending (G). Government welfare benefits, spending on infrastructure.
400
What is the difference between Nominal GDP & Real GDP?
Real GDP takes inflation into consideration when calculating final GDP, where Nominal does not take it into consideration.
500
Is income a leakage or injection?
It's neither. it's the relation between households and firms in a 2 sector model.
500
Economic reasons for inequality of income and wealth
•A lack of formal employment opportunities (particularly for young people with special skills)
•Poor vocational training.
•Lack of investment in the education and health sectors
500
What is the 18th letter of the Greek Alphabet?
Sigma
500
Explain the 3 leakages.
•Savings (S) (money not used to finance consumption, e.g. saved in a bank)
•Imports (M) (money sent abroad to buy foreign goods)
•Taxes (T) (money collected by government, e.g. income tax and VAT)
500
3 Methods of measuring GDP
1.The output method: calculating the total production of goods and services of the country
GDP=Final revenue -total cost of production
2.The income method: totalling all the incomes earned in producing the country’s total output
GDP = rent + wages + interest + profit
3.The expenditure method: totalling all the spending on the country’s output
GDP=C+I+G+(X-M)