Economic and Business Review, (* ￣︿￣), Elliott - Coggle Diagram
Economic and Business Review
What is Inflation?
Inflation is the general rise in price across the economy.
Types of inflation
What does it mean?
Gross Domestic Product
What does it do
Measures the market value of all goods and services produced
What is it?
Measures what can be produced (output) from a given amount of resources (input)
What is unemployment
types of indicators
• Leading – predict changes in economic performance; expected to change before direction is evident in the rest of the economy
• Coincidental – appear to change in line with the level of economic activity
• Lagging – not expected to show any change until after trends in the rest of the economy have been confirmed
background knowledge concepts
needs & wants, scarcity & the basic economic problem
what is scarcity?
scarcity is having limited resources to achieve unlimited resources to achieve unlimited needs and wants
needs & wants
Needs: Things that we need to maintian a healthy lifestyle e.g water, food, shelter, some form of clothing
wants: things which we do not need to maintain a healthy lifestyle by would prefer to have it e.g cars, gym equipment
What is the basic economic problem?
Economic problem arises from scarcity of resource . Every economy faces scarcity of resources because their wants are unlimited and their resources (means) are limited. Therefore, economic problem is the problem of economising scarce resources.
what is opportunity cost?
The next best thing that is lost when purchasing something
living standards & economic performance
what is the relationship between living & economic performances?
the relationship between living & economic performances is The level of productivity is the single most important determinant of a country's standard of living, with faster productivity growth leading to an increasingly better standard of living.
Financial Decision Making
Factors (internal and external)
What is an internal factor?
An internal factor is any factor that relates directly to the customers motivations.
What is an external factor?
Related to nature of the product, market or producer.
-The Reserve Bank of Australia sets Australian interest rates, which encourage changes to banks’ interest rates
interest rates-The amount paid by a borrower to a lender for the use of assets
Balance of payments:
it measures the movement of income coming in and going out of Australia:
defecate indicates not enough coming in
surplus indicates to much comeing in
-The balance of payments is a record of all the financial transactions between Australia and the rest of the world
-This affects Australia’s competitiveness in the international market
-If the Australian dollar rises in value (appreciates), imports become cheaper;
if the value of the Australian dollar falls (depreciates), imports become more expensive
-The exchange rate is the price of one currency expressed as another
-Full employment (low unemployment)
-Price stability (low inflation)
-Sustainable economic growth
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