Greenacre Educational Publications
Economics HSC Course
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Topic
3: Economic Issues |
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The focus of this topic is an examination of Australia's place in the global economy and the impact of changes in the global economy on Australia's internal and external stability. (Economics Stage 6 Syllabus)
GLOSSARY OF TERMS
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TERM |
DEFINITION |
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Aggregate demand |
The total demand for goods
and services generated by the sum of all spending in the economy. A basic proposition
of economic analysis is that the level of production, employment, and income
are determined by the level of total spending on final goods and services.
Y=C+I+G+X-M |
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Award |
These are minimum wages
and working conditions legislated by the government or an industrial tribunal. |
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CPI |
In Australia, inflation is measured by the Consumer
Price Index (CPI). This is the price of a basket of the normal goods and
services people buy in Australia. |
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Cyclical unemployment |
Unemployment arising from
a slowdown in the pace of economic expansion or aggregate demand. |
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Direct investment |
Equity investment in
Australia by non-residents. |
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Ecologically sustainable development |
This is a process where industrial
development is accompanied by preservation of the environment. |
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Enterprise agreement |
An agreement reached
through enterprise bargaining that states the working conditions in that
enterprise, industry or business. |
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Enterprise bargaining |
The process of negotiation
between employers and employees (and or unions) in regard to industrial
relations issues, such as wages and conditions. |
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Externalities |
Costs or benefits of production
or consumption that affect society, but not necessarily the producers or
consumers of the product. |
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Free rider |
Someone who consumes a
product without paying for it. |
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Frictional unemployment |
Unemployment arising from
new entrants into the labour market and those workers waiting to start a new
job. |
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Gini coefficient |
The area between the Lorenz
curve and the 45 degree line divided by the total area under the 45 degree line.
It is a measurement of income equality. The larger the gini coefficient the
larger is the level of income inequality. |
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Hardcore unemployment |
The unemployed who find it
difficult to get and keep jobs because of physical, mental or social reasons. |
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Hidden unemployment |
Unemployment represented
by discouraged workers and not included in published unemployment statistics. |
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Human capital |
Human capital is the
value of a person’s education, skills and experience. |
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Implicit Price Deflator |
A type of price index. As an example, the implicit price deflator for Gross Domestic Product is calculated by comparing movements in GDP in current prices and constant prices. |
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Income |
Income is the flow of earnings received by an individual and includes sources such as wages, salaries, commissions, dividends, interest and rent. |
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Industrial dispute |
A dispute or disagreement in the work place that causes a stoppage of work. These disputes often relate to managerial policy, wages, physical working conditions and hours of work. |
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Industrial Relations Commission |
Industrial relations
commissions or tribunals are agencies set up by the federal or state
governments to consider issues such as industrial dispute resolution, award
determination and enterprise agreement registration. |
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Inflationary expectations |
An expectation of the
inflationary cycle based on the argument that once high rates of inflation
come to be expected, inflation will be maintained over a period of time.
Inflation becomes built into the system. |
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Injections |
Expenditure on production
by domestic firms. Injection equal investment plus government expenditure
plus expenditure on exports. |
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Labour force |
The total number of available
workers in an economy, at a particular time. The labour force may be
classified according to those in various types of employment and those
unemployed, but actively seeking work. Also known as the workforce. |
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Long-term unemployment |
The long-term unemployed
are the unemployed that have been out of work for more than 12 months. |
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Lorenz curve |
A curve showing the
proportion of national income earned by a particular percentage of the
population (measured from the poorest upwards). |
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Mobility of labour |
The ease with which labour
can be transferred from one occupation to another, or from one geographical
location to another. |
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Multiplier effect |
An initial change in
aggregate demand leads to an eventual change in national income that is
greater than the initial change. It is equal to 1 divided by 1- MPC. |
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NAIRU |
The NAIRU is the non-accelerating inflation
rate of unemployment, also referred to as the natural rate of unemployment. It
is the level of unemployment that can be sustained at a set period of time
without having major inflationary effects. |
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Natural Rate of Unemployment |
The natural rate of
unemployment, often referred to as the NAIRU (non-accelerating inflation rate
of unemployment), is the long run rate of unemployment a nation can sustain. |
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Non-wage outcomes |
Benefits from working that
are not related to wages, such as superannuation, sick leave and holidays. |
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Participation rate |
The proportion of the working
age population, 15 years and over, recorded as either in work or looking for
work. |
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Part-time work |
Work less than a normal working week. This is often considered to be less than 35 hours a week. |
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Portfolio investment |
Purchases by companies and
individuals of shares and debentures issued by Australian and overseas
companies. |
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Private goods |
Goods that someone or a
group owns. Some people are excluded from using it usually as a result of
price. |
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Public goods |
Goods or services that can
be consumed by everyone and from which no one can be excluded, eg defence. |
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Seasonal unemployment |
Unemployment occurring in
industries or regions where the demand for labour is lower at certain times
of the year. |
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Structural unemployment |
Unemployment that arises
from changes in the pattern of demand or supply in the economy. |
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Unemployment |
The number of workers who
are part of the labour force and are not employed but are actively seeking
employment. |
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Unemployment rate |
Unemployment expressed as
a percentage of the labour force. |
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Wealth |
Wealth is the stock of
assets owned by an individual and includes items such as shares, bank
deposits, superannuation, houses and land. |
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Withdrawals |
Incomes of households or
firms that are not directly put back into spending. Withdrawals equal net
savings plus net taxes plus import expenditure. |
The
use of current information and statistics is very important to economics. In
order to find up to date statistics, the Australian Bureau of
Statistics has most of the statistics you will
need in your study. Statistics range from the unemployment rate, to the
consumer price index. The latest figures can usually be found under Key National Indicators.
Australian Bureau of Statistics - http://www.abs.gov.au
The Business Council of Australia (BCA) site includes information on Tax Reform, Workplace Reform, Sustainable Development, as well as other discussion papers and current business news.
Business
Council of Australia -- http://www.bca.com.au/
The Treasury site includes the Federal Budget, economic data and economic roundup (a regular publication on the state of the economy)
Department
of the Treasury -- http://www.treasury.gov.au/
The Reserve Bank of Australia site has many articles, discussion papers and speeches, that are relevant to not only monetary policy but all areas of economics.
Reserve
Bank of Australia -- http://www.rba.gov.au/
An
excellent article on the Current State of the Australian Economy can be found
at:
An
Overview of the Australian Economy (2010)
Useful resources for this topic and other topics in the HSC course can be found at:
The site contains information about two excellent workbooks that provide activities for students to do (with the answers), as well as practice multiple choice questions. These are available now. Students and teachers can purchase these books from the site.
There are also overhead masters and powerpoint slides available on the HSC topics. These are an excellent source of information and a great time saver for teachers.
Go to HSC Topic 4 - Economic Policies & Management
Return to HSC Economics homepage
Last modified 25th August 2010
Comments and enquiries to Tony Stokes