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economics unit 2 - Coggle Diagram

- - - - nominal GDP- current prices not adjusted
      - Real GDP-adjusted for inflation
        
        Nominal GDP (Y2) / Price Index (Y2) x100
      - Real GDP per capita-refers to the value of goods and services produced per head of population
        
        real GDP/population
- - - - role of households- owners of productive resources (land, labour, capital, enterprise)
      - role of firms- employers of resources, and produce all the goods and service of the economy, all output sold to consumers
    - - real flow- factors of production owned by households/consumers are made available by firms to use to produce goods and services by which in turn are produced for consumers
      - money flow- firms or producers hiring the factors of production from the consumer have to reward them by paying them income. in turn the consumers use this income to purchase gods and services produced by the producers
    - - financial sector- savings and investments
        
        savings- the proportion of income not spent on goods and services, represented as S, is a leakage
        
        investments-expenditure on goods and service which are not intended for current consumption, presented as I, is an injection
      - government sector-taxation and government spending
        
        taxation-when households pay some of their income to the government through taxes such as income tax and GST, presented as T, is a leakage
        
        government spending- spending some of the income collected through tax to run the government or infrastructure, represented as G, is an injection
      - overseas sector- imports and exports
        
        imports-good and services into Australia, represented as M, is a leakage
        
        export- goods or services flow out of Australia, represented as X, is an injection
    - - leakages-reduce the flow of money and goods between households and firms (will change as income changes)
      - injections- increase the flow of money and goods between households and firms, are autonomous (not affected by income)
- - - - unemployment rate is below the NAIRU, inflation tends to rise; conversely, when it is above the NAIRU, inflation tends to fall.
    - - all people aged 15 years or older that are employed or actively looking for a job
      - who is not in the labour force-not in a paid job and not looking for a job, children, students, retirees