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Economics - Coggle Diagram
Economics
6 Key Concepts
Scarcity
- Scarcity refers to the situation of having limited resources but unlimited needs and wants
Economic Performance and living standards
- Economic performance is measured by how well they can provide for people’s needs and wants
- To increase living standards economic growth is able to lead this
Making Choices
- “The economic problem”- due to our limited resources we have to make decisions
Interdependence
- Interdependence refers to how individuals, businesses and government rely on each other to get what they need
Specialisation and trade
- Countries will specialise in types of product 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
Allocation and Markets
- Resource allocation: every society has to make decisions about how these resources are allocated through an economic system
EconomicPerformance
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Inflation
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If inflation is too high prices may rise faster than incomes
Some reasons for high inflation to occur is if:
- Economy grows faster than its speed limit
- Supply of some goods and services is disrupted then prices may increase
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Unemployment
Unemployment occurs when someone is available and actively looking for work, but doesn’t have a paid job
Structural
Occurs if the way goods/services are produced changes, such as due to technology. Skills and training of those workers don’t match the current labour market
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Frictional
Occurs when a job ends at a time of year, such as fruit pickers or tourism jobs, leading to low labour demand
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Seasonal
Occurs when a job ends at a time of year, such as fruit pickers or tourism jobs, leading to low labour demand
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Main Concepts
Interdependence
Refers to how individuals, businesses and governments rely on each other to get what they need
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Scarcity
Scarcity is the economic problem of having unlimited needs and wants, but limited resources available
Specialisation and Trade
Specialisation refers to the way an individual, business or entire country produces a particular good or service.
Markets and allocation
Resource Allocation- every society has to make decisions about how these resources are allocated through an economic system
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Making decisions
Consumers, make choices about what we want to buy to satisfy our needs and wants
Consumer decisions may be:
- financial choices
- business decisions
- employment decisions
Legal decisions
Living Standards
Material
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Material living standards of a nation are usually assessed or measured by the quantity of goods and services
Non-material
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For example factors that affect these standards are freedom of speech, low levels of crime and discrimination
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Government Management
Budget
Taxes
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Two types of taxes
Directs tax- Money is retrieved by taking individual or company income (income tax, company tax and so on
Indirect tax- Money is retrieved by getting money through the government taxing goods and services or adding cost directly to items
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Budget is spent on
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Health
Hospitals, doctors and so on
Education
Schools, universities, vocational training