Economic Growth
What are two factors that can positively impact economic growth in a country?
Increased investment and technological progress.
Define frictional unemployment and provide an example
Unemployment that occurs when someone is between jobs. Example: A graduate moving from a casual job to a part time role for a different employer.
Define inflation and its impact on the purchasing power of consumers.
General price increase reducing consumer purchasing power.
Define fiscal policy and its objectives in economic management.
Government use of taxation and spending for economic objectives.
How is Gross Domestic Product (GDP) calculated, and what does it represent?
Total value of all goods and services produced; Represents economy size.
How does technological advancement influence economic growth?
By increasing productivity and efficiency in various industries.
What are the main differences between cyclical and structural unemployment?
Cyclical related to the business cycle; Structural due to economic changes.
What are the main causes of demand-pull inflation?
Excess aggregate demand compared to supply.
What is the role of the Reserve Bank of Australia in monetary policy?
Influence economy through controlling inflation.
Describe the phases of the business cycle and their characteristics.
Expansion, Peak, Contraction, Trough; Each phase has unique characteristics.
How can foreign direct investment can affect economic growth in Australia?
By bringing in capital, technology, and expertise.
How does seasonal unemployment differ from other types of unemployment?
Seasonal linked to seasonal labor demand fluctuations.
How can cost-push inflation affect businesses and consumers?
Production cost increases leading to higher prices.
Give an example of expansionary fiscal policy and its intended outcomes.
Increase government spending to stimulate growth.
What role do economic indicators like unemployment rate play in assessing the health of the economy?
Unemployment rate measures labor market health.
Explain the relationship between human capital and economic growth.
Human capital enhances productivity leading to economic growth.
What impact does technological advancements have on the unemployment rate?
Technological advancements can lead to job displacement.
What is the concept of hyperinflation and what consequences does it have on an economy?
Rapid uncontrollable price increase devaluing currency.
How can monetary policy influence economic conditions?
Influences economic conditions through money supply.
How does the business cycle impact businesses and consumers?
Business cycle impacts consumer spending and business profits.
How can government policies help reduce different types of unemployment?
They promote resource efficiency and innovation for long-term growth.
How can government policies help reduce different types of unemployment?
Government policies like training programs can reduce unemployment.
What are the measures that can be taken to control inflation in a country?
Measures include raising interest rates to control inflation.
What are fiscal and monetary policies trying to achieve when used to manage different phases of the business cycle?
Stability
How do economists use the balance of trade as an economic indicator to evaluate a country's economic health?
What does the balance of trade indicate when evaluating an economy's health?
Balance of trade indicates economic health and competitiveness.