Definitions
Models
Determinants
Impacts
Business Cycle
100
The total market value of all final goods and services produced in a country during a given period of time (usually a year).
Gross Domestic Product
100
A model that shows the maximum combination of goods and services that can be produced in an economy given its factors of production.
The Production Possibility Frontier
100
What are the 3 P's?
Participation, Population and Productivity
100
Materialism
Externalities
Inflation
Structural Unemployment
Unequal Distribution of Income
Costs of Growth
100
Taylor has been thinking about buying a new surfboard and has been saving the money from her part-time job for the last couple of years. She finally has enough to get the surfboard but when she visits the store, she discovers that the prices of surfboards have gone up by 10% over the past two years.
Peak
200
The increasing capacity of an economy to satisfy the material wants and needs of its members over a given period of time.
Economic Growth
200
A model that shows the total output of an economy given a certain level of labour employed in the economy, with all other factors of production being unchanged.
The Aggregate Production Function
200
A country invests heavily in research and development, leading to groundbreaking technological advancements.
Potential economic growth due to an increase in quality of capital.
200
Increases Real Income and Material Welfare.
Economic Opportunities
Economic Opportunities
Quality of Goods and Services
Benefits of Growth
200
Alex has been looking for work since he left school two years ago. Recently, he has noticed that there are quite a few new businesses opening up in his town and a number of shops have ‘staff wanted’ signs in the window. He attends two interviews and is offered a job as a cleaner in a hotel.
Expansion
300
The value of gross domestic product expressed in the prices of the day e.g. current prices.
Nominal GDP
300
What would cause the PPF to shift outwards?
An increase in potential GDP e.g. economic growth.
300
A country experiences a significant change in its demographic structure, such as an aging population.
A decrease in potential economic growth due to decrease in quantity of labour force.
300
What is Australia's annual targeted growth rate?
3-4%
300
Bhakti owns a chain of bakeries. Over the past few years, sales have been getting lower and lower – she recently had to close one of her stores and let the employees go. If sales don’t increase, Bhakti is worried that she might have to close more stores.
Contraction
400
GDP is adjust to remove the effect of price increases.
Real GDP
400
What would cause a movement from Point A to Point B?
An increase in labour resources.
400
A country's average level of education increase.
Increase in potential economic growth due to an increase in quality of labour.
400
The optimal rate of growth occurs at the intersection of:
Total benefits and Total Costs
400
Kyle has been working for a local clothing manufacturer, creating designer t-shirts. They produce around 30 shirts a week. Kyle’s boss has recently told staff that the business is doing extremely well and they will all receive a pay rise. In return, she has asked the staff to produce five additional t-shirts each week.
Expansion
500
The volume and quality of goods and services produced per head of population per unit of time.
Real GDP per capita
500
What can cause a movement from Point B to Point C?
An increase in productivity e.g. better technology or education/skills.
500
A severe drought wipes out crops across the country.
A decrease in potential economic growth due to a decrease in quantity of land resources.
500
Australia's current annual economic growth rate.
1.1%
500
Kelly and Li Qiang are a young couple who are eager to buy an apartment. However, their incomes have not increased much over the past couple of years and apartment prices are too high for them to afford a mortgage. Last month, the Reserve Bank lowered the cash rate, leading to a reduction in mortgage* interest rates, making a home loan more affordable.
Through