Economic Indicators
What does GDP stand for?
Gross Domestic Product
Name one natural resource and one capital resource.
Coal and machinery
What is fiscal policy?
Government decisions about taxation and spending
What does it mean when we say Australia is a part of the global economy?
Australia trades goods, services, and capital with other nations
What is superannuation?
A system where money is saved during working life for retirement.
What does the unemployment rate measure?
% of people in the labour force without jobs actively seeking work.
What are the four key economic participants?
Households/consumers, businesses/enterprise, government, financial institutions
What is the cash rate target and who sets it?
Interest rate set by the RBA to influence economic activity
Name two of Australia’s major trading partners.
China, USA, Japan, South East Asia.
Why is saving for superannuation important for individuals?
Provides financial security in retirement.
What is inflation?
A general increase in prices and fall in the purchasing value of money.
What role do households play in the economy?
They supply labour and consume goods and services.
Give an example of expansionary fiscal policy.
Tax cuts or increased government spending to stimulate the economy.
How does international trade benefit Australian consumers?
Provides more choice, lower prices, access to goods not produced locally.
How does superannuation benefit the government?
Reduces reliance on age pensions and welfare.
What happens to GDP during a recession?
It decreases or grows at a negative rate.
What type of resource is a mechanic’s expertise?
Labour resource – human skill/effort
How does a change in the cash rate impact inflation?
Lower rates can increase inflation; higher rates can reduce it.
What is one disadvantage of being part of the global economy?
Exposure to global financial crises or reliance on imports.
What is tax revenue used for in Australia?
Funding services like healthcare, education, infrastructure.
Interpret this graph: If inflation is rising sharply while GDP stays flat, what might this indicate?
Stagflation – high inflation and stagnant growth.
Explain the interaction between households and businesses in the circular flow model.
Households provide labour, businesses provide income and goods/services.
How does the federal budget affect individuals?
It influences tax rates, public services, and welfare payments.
Explain how an increase in exports affects GDP.
Exports are added to GDP, so it increases economic growth.
Explain how a change in tax rates can influence consumer spending.
Lower taxes increase disposable income, boosting spending; higher taxes reduce it.