Basic Economics
What is GDP and how is it measure?
GDP is Gross Domestic Product and it is measured by adding up the consumption, investment, government spending and net exports.
What is GDP?
Gross Domestic Product (The total market value of goods and services produced in a country in a given year.)
What is inflation?
The overall rise in prices for goods and services across the economy.
What is Fiscal Policy?
Fiscal Policy is how the government manages spending and taxation to influence the economy.
What are living standards?
The standard of living of a person or group, measured by access to goods, services and resources.
What is the purpose of taxation?
Mainly to raise revenue for government expenditures.
What is Budget Surplus?
Budget Surplus is when the government revenue is bigger than the government spending. This is extra money into the government.
Where does inflation occur?
Inflation occurs when the general price level of goods and services rises.
What are the different types of Fiscal Policy?
Contractionary Fiscal Policy: decreases spending or increases taxes to reduce inflation.
What are non material living standards?
Non-physical aspects of wellbeing such as happiness, safety and freedom.
eg. Work-life balance, physical and mental health
draw the economic cycle
check in book
What is Budget Deficit?
When the government spending exceeds government revenue. This is not enough money into the government.
What are the causes of inflation?
Demand-pull inflation: when demand exceeds supply
Cosh-push inflation: when production costs increase
imported inflation: when import prices rise
How can Fiscal Policy influence inflation and unemployment?
Through government spending and taxation.
What are material living standards?
Access to goods and services.
eg. housing, healthcare, technology
What is the quality of life index
a metric used to measure the overall well-being and living conditions in a country or city by combining various factors like health, economic stability, safety, and environment
What is Social Welfare?
Social Welfare is payments made by the government to support individuals or families in need.
Eg. Medicare
How does inflation affect consumers and businesses?
Inflation negatively affects consumers by reducing purchasing power, making goods and services more expensive, and decreasing the value of savings.
For businesses, inflation increases costs for materials and labour, but passing these costs on to consumers can lower demand.
What is the goal of Fiscal Policy?
Reduce unemployment, Control inflation and encourage economic growth
What is the difference between material and non-material living standards?
Material living standards refer to a person's access to physical goods and services, which can be measured by income and consumption, while non-material living standards include non-physical factors that affect quality of life, such as health, environment, and freedom
What is economic growth?
An increase in the amounts of goods and services produced per person in a period of time.
What is Progressive Taxation?
A tax system where the rate of tax increases as income increases.
What are some ways government can manage inflation?
They can manage spending and taxation in the economy. (The Fiscal Policy)
RANDOM:
What is economics?
Economics is the study of how people, businesses, and governments make choices about using limited resources to satisfy their needs and wants.
Why might GDP not reflect non-material living standards?
it does not account for non-market production, income inequality, environmental costs, and quality of life factors like health, education, and leisure