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Economics - Coggle Diagram
Economics
GDP
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if it grows faster than its speed limit, people may be worse through high inflation
It is also harmful if the economy grows too slowly, because people lose their jobs and businesses struggle to make profits
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Key Concepts
Making choices
Due to limited resources, we must make decisions, aka the economic problem
Every decision involves an opportunity cost, the cost of the next best option you have given up when you make a choice
Specialisation and trade
Countries will specialise in types of products in order to have extra that they can trade for things they need. This is because it might be more efficient or more cost-effective
Interdependence
Refers to how individuals, businesses and governments rely on each other to get what they need
Allocation and markets
Every society must make decisions about how these resources are allocated through an economic system
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Unemployment
Occurs when someone is available and actively looking for work, but does not have a paid job
Types
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Frictional
occurs when someone is looking for a new job (quit or fired), short term
Structual
occurs if the way goods/services are produced changes. The skills and training of workers don’t match current labour market, also jobs offshored
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Impacts
Lower material and non-material living standards: poverty, social, isolation, family breakdown
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Inflation
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Impacts
If it’s too high, then prices might rise faster than incomes. This means people can afford fewer goods and services than before, making them worse off
High inflation could occur because the economy grows faster than the speed limit, the supply of some goods and services is disrupted then their process may increase
Living Standards
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Non Material
Cannot be measured in dollar terms and is intangible, but can affect our enjoyment of life
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Ways to measure
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To produce goods and services, the environment is damaged/changed
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As it is an average this increase might not be shared equally (inequality is rising across the world)
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Economists
investigate many different indicators to build up a picture of how the Australian economy is performing
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