Phases of the Business Cycle
An expansion is the phase between _________ and _________ of the business cycle
Trough, Peak
Define GDP
The sum total value of all final products produced in an economy over one year.
Which year was the moon landing?
1969
What do the different types of indicators tell us? Why should we care?
It lets us know where on the business cycle we are, where it may lead in the future. Allows decisionmaking by policymakers.
What is the RBA inflation target?
2-3% inflation
Father of Modern Economics, wrote the book "Wealth of Nations". Is considered the first Classical economist.
Adam Smith
Why does economic growth begin to slow at the peak?
The economy is operating at or above full employment (100) > No labour resources to expand production, high inflation due to rising labour costs. (100)
What does GDP stand for
Gross Domestic Product
Capital of Djibouti
Djibouti (city)
Give 2 examples of leading indicators (100 per)
Share prices
Building approvals
Levels of inventory held
Employment vacancies
Who controls Australia's monetary policy
The Reserve Bank of Australia
Put forward the idea that goods that produce negative externalities should be taxed to account for the deadweight loss.
Last name only is okay.
Pigou (Pigouvian Taxes)
How do economists define recession
Two consecutive quarters of negative economic growth
What is the formula for GDP
GDP= C + I + G + (X-M)
Which language has the most words
English (200,000)
Why is gold a leading indicator
People buy gold when they think the economy will crash (low investor confidence)
Why would the reserve bank raise interest rates?
To curb inflation, increase consumer savings rates, reduce investment in the economy.
Keynes' Opp, part of the Austrian school of economics.
List 4 Characteristics of a trough (100 per)
Low levels of spending
High levels of unemployment
Low participation
Business in survival mode
Low demand
Prices fall
Bankruptcies
What is Australia's GDP in 2024? (In USD)
$1.75 Trillion USD
Which artist painted the Sistine Chapel in Rome. (Hint: One of the ninja turtles)
Michaelangelo
Give two examples of a lagging indicator
unemployment
Wages
inflation
interest rates
List the main levers (methods of control) of both Monetary and Fiscal Policy (200 Each)
Monetary - Interest rates
Fiscal - Gov spending/taxation
The main economic theorists behind communism. Wrote Das Kapital, and The Communist Manifesto
Karl Marx, and Friedrich Engels
High interest rates during what phase may result in falls in both consumption and investment spending causing a decline in economic activity.
Boom phase
What is Australia's GDP per capita? (In AUD)
$66,250 AUD
A princess from a medieval empire introduced forks to the Western world in the late 900s AD. Which empire was she a princess of?
Byzantine/Roman Empire
What are the three types of economic indicators, and explain what they are.
Leading (Before) indicates that GDP will change in a direction
Lagging (After) moves after GDP change, confirms truth
Concurrent (During) moves in line with GDP change
Why do democracies struggle to do fiscal policy "correctly"
Raising taxes is deeply unpopular and will lose you elections
The economic system that existed from the medieval to napoleonic era
Mercantilism