The Business Cycle
This is the phase of the business cycle where GDP is increasing, unemployment is falling, and inflationary pressure is starting to build.
What is an expansion?
This is the measure of the total market value of all final goods and services produced in a country over a period of time.
What is Gross Domestic Product (GDP)?
This term describes the percentage increase in the inflation-adjusted value of goods and services produced in an economy over a period of time.
What is real economic growth?
Inflation caused by strong demand and spending in the economy is called this.
What is demand-pull inflation?
The type of unemployment caused by downturns in the business cycle is called this.
What is cyclical unemployment?
This war and defeat in 1905 highlighted the Tsarist regime’s weaknesses and sparked revolutionary activity.
What is the Russo-Japanese War?
This 1951 treaty committed Australia, New Zealand, and the United States to mutual defence.
What is the ANZUS Treaty?
Name two economic indicators that typically rise during the peak phase of the business cycle.
What are inflation and interest rates?
If GDP growth is 3%, inflation is 2%, and population growth is 1.5%, what is the approximate real GDP per capita growth rate?
What is 0.5%?
This term describes GDP that has been adjusted for inflation.
What is real GDP?
This is the RBA’s target range for inflation.
What is 2–3% per annum?
This rate of unemployment exists when the economy is at full employment, but not triggering inflationary pressure.
What is the NAIRU (non-accelerating inflation rate of unemployment)?
This 1905 event saw workers petition the Tsar and eventually led to the creation of the Duma.
What was Bloody Sunday?
Signed in 1954, this pact included Australia, New Zealand, the US, the UK, France, Pakistan, Thailand, and the Philippines.
What is the SEATO (South-East Asia Treaty Organization)?
This term describes the lowest point in the business cycle, where output, employment, and spending are at their weakest.
What is a trough?
Name one leading and one lagging indicator of economic activity.
What is building approvals (leading) and unemployment rate (lagging)?
Describe how a rightward shift in the PPF represents economic growth.
What is an outward shift, showing increased productive capacity?
Name one difference between headline inflation and underlying inflation.
What is headline inflation includes volatile price movements (like food and fuel), underlying excludes them?
Name and define one other type of unemployment besides cyclical.
What is structural, frictional or seasonal unemployment.
This manifesto promised basic civil rights and a legislative assembly to calm revolutionary pressures.
What was the October manifesto?
Name one key aim of Australia's post-war engagement with Asia in the early Cold War era.
What is to contain communism / to build security alliances / to strengthen regional stability?
If a government introduces a large infrastructure program during a slowdown, this is an example of what type of policy action?
What is expansionary fiscal policy
This measure includes people who are working fewer hours than they would like.
What is underemployment?
Name two determinants of long-term economic growth.
What are increases in human capital and technological improvements?
If CPI was 120 last year and is 126 this year, what is the annual inflation rate?
What is 5%?
Explain the relationship between the unemployment rate and inflation according to the Phillips Curve.
What is an inverse relationship: low unemployment tends to increase inflation, and high unemployment tends to reduce inflation?
This radical group, led by Lenin, advocated for a small, disciplined revolutionary vanguard.
Who were the Bolsheviks?
This 1989 initiative, co-founded by Australia, promotes economic cooperation across the Asia-Pacific region.
What is APEC (Asia-Pacific Economic Cooperation)?
Explain how a negative supply shock, such as a cyclone damaging crops, can cause a shift in the business cycle.
What is moving the economy towards contraction due to cost-push inflation, reduced output, and falling confidence?
Explain why the inflation rate is considered a lagging indicator and how it relates to economic growth trends.
What is because it reflects price changes caused by past shifts in demand and supply, and tends to rise after the economy has already expanded?
Explain one limitation of GDP as a measure of economic welfare.
What is it does not account for environmental degradation, income distribution, or non-market activities?
Explain two negative effects of sustained inflation above target.
What is reduced purchasing power and increased uncertainty for investment?
If the labour force is 14 million and 13.3 million are employed, calculate the unemployment rate.
What is 5%
(7 million / 14 million) * 100
Explain how Russia’s participation in World War I exacerbated internal political and economic instability.
What is the strain on resources, military defeats, and widespread unrest undermining Tsarist authority?
Explain how Australia’s foreign policy priorities in Asia shifted from the Cold War period to the post–Cold War era.
What is from anti-communist military alliances to economic engagement, trade partnerships, and regional diplomacy?