commerce yr 10
what does the five sector model show?
- sums up the way the econmy works
- shows the connection between five different sectors of the economy
what is the Australian Securities and Investment Comission (ASIC)
- independent commonwealth government body responsible for the regulation of the financial sector
-provide comsumers proctection in financial services
what are the phases of a business cycle?
- boom
- concration
- recession
- expansion
- depression
what is an contraction?
falling decline in economy
- falling levels of production
- decreasing consumer spending
- rate of inflantion mt fall
- wages rates fall
- interest rates fall
- unemployment rises
what is an expansion
rising of an economy
- rising levels of production
- increasing consumer spending
- wages rise
- interest ratss riss
- unemplyment decreases
- rate of inflantion rises
what is a recession?
caused by lack of spending
- income and production at lowest levels
- unemplyment at high level
- wages and salaries fall
- consumer demand, business sales and profit reaches lowest level
- interest rates low
what is a boom?
upsids of the business cycle, growth and prospertiy
- income and production at highest levels
- wages and salaries are high
- businesses operate at full capcity
- interests rate are high
- unemployment decreass
what does demand and supply do for the economy?
through the interaction of demand and supply, markerd attempt to solve the economic problem of scarity and effcient allocation of resources
what is the law of demand
quantity of a product that consumer are willing to pay at the certain price given at a certain time. Eg: If prices increases, demand for goods snd services decreases
what is the law of supply
quantity of goodd and services businesses are willing and able to offer. As prices increase, quantity supplied will increase
what is the price mechanism
refers to the forces of demand snd supply in determining the price snd quantity of something
increase in demand means...
- demand curve will shift to the right
- increase in price
- increass in quantity
decrease in demand means...
demand curce shifts to the left
- decrease in price
- decrease im quantity
reasons for an increase in demand
- rise in consumer income
- change in consumer taste and prefeence
- increase in population
- substitue good becomes more expensive
- complementary goods become cheaper
- prices expected to rise in future
reasons for a decrease in demand
- decrease in consumer income
- change in consumer income
- population may decrease
- substitue goods might become cheaper
- complementary goods become more expensive
- prices expected to fall in the future
increase in supply means...
supply curve shifts to the right
- decrease in price
- increase in quantity
decrease in supply means...
supply curce shifts to the left
- increase in price
- dcrease in quantity
reasons for increase in supply
- increased efficeny
- fall in cost of production
- improved climatic conditions
- increase in number of suppliers
reasons for decrease in supply
- reduced efficeny
- increase in cost of production
- unfavorablr climatoc conditions
different types of businesses
- on demand business: no need to wait etc
- small and large businesses:
mirco bus:0-5 employess
small bus:5-19 employees
medium bus:20-199 employess
large bus:200 or more
- global businesses: larger company that branches into differnt countries
- government businesses: government owned and operated, prodived essential communtity service
- not for profit business: provide services for no profit
factors influencing business decisions
- technology: technonlogical advanced have changed impacting administration tasks, communication, services provision, maunfactoring process
- business cycle: the business cycle showcasing when consumer should best spend their money of goods and services
- globalisation: access to worldwode businesses and creates extended markets, cheaper materials and access to labour while it can also have increased compeition, increased unemplyment and ethical issues
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