Commerce Yearly PDF

COMMERCE YEARLY **[A) The Economic and Business Environment]** **1. Nature of the Economy** **Five Sector Circular Flow Model** - **Components:** Households: Supply labor and consume goods/services. Businesses: Produce goods/services and demand labor. Government: Collects taxes and provid...

COMMERCE YEARLY **[A) The Economic and Business Environment]** **1. Nature of the Economy** **Five Sector Circular Flow Model** - **Components:** Households: Supply labor and consume goods/services. Businesses: Produce goods/services and demand labor. Government: Collects taxes and provides public goods/services. Financial Sector: Facilitates savings and investments. Foreign Sector: Represents trade with other countries. **Flow Dynamics:** Money flows: Households receive income from businesses; they spend this on goods/services. Resource flows: Businesses receive labor and resources from households. **Interdependence Between Sectors** Economic shocks (e.g., a recession) affect all sectors differently, creating a ripple effect. **Business Cycle** **Phases:** **Expansion:** Rising GDP, low unemployment, increased consumer spending. **Peak:** Economic activity at its highest, potential for inflation. **Contraction:** GDP declines, unemployment rises, consumer spending decreases. **Trough:** Lowest point of economic activity before recovery begins. **Impacts:** Affects business investment decisions, consumer confidence, and government policy responses. **2. Nature of Markets Within the Economy** **Price Mechanism** **Demand and Supply Interaction:** Demand increases as prices fall; supply increases as prices rise. Market equilibrium is reached when supply equals demand. **Elasticity:** Price elasticity of demand/supply affects how changes in price impact quantities demanded/supplied. **Types of Markets** **Perfect Competition:** Many buyers/sellers, homogeneous products, free entry/exit. **Monopoly:** Single seller, unique product, high barriers to entry. **Oligopoly:** Few sellers, interdependent pricing, potential for collusion. **Customary Trading Practices** Influenced by culture, tradition, and social norms; can affect pricing, bargaining, and consumer behavior. **Reasons for Government Interaction** **Market Failures:** Address monopolies, externalities (e.g., pollution), and public goods. **Economic Stabilization:** Manage inflation, unemployment, and economic growth. **Consumer Protection:** Regulations to ensure fair practices and safety. **3. Interactions Within Markets** **Types of Business** **Sole Traders:** Simple structure, full control, unlimited liability. **Partnerships:** Shared control, shared liability, potential for conflicts. **Corporations:** Limited liability, ability to raise capital through shares, more complex regulations. **Factors Influencing Business Decisions** **Technology:** Impacts production efficiency and marketing strategies. **Economic Cycle:** Affects demand forecasting, hiring practices, and investment. **Market Conditions:** Competitor actions, consumer preferences, and regulatory changes. **Contribution of Entrepreneurship and Innovation** Drives economic growth through new products/services and increased competition. Fosters job creation and enhances productivity. **Ethical Decision-Making and Corporate Social Responsibility (CSR)** Businesses increasingly held accountable for their social and environmental impacts. Ethical considerations in decision-making can enhance brand loyalty and consumer trust. **4. Current Issues** **Contemporary Economic Challenges:** Inflation trends and their impact on purchasing power. Unemployment issues, particularly in specific sectors. Environmental sustainability and climate change impacts on business practices. Global economic uncertainties (e.g., geopolitical tensions, pandemics). **B) Our Economy** **1. Performance Indicators** **Standard of Living** Measured by income levels, access to education/healthcare, and quality of life indicators. **Human Development Index (HDI):** Combines life expectancy, education, and income. **Economic Growth** **Gross Domestic Product (GDP):** Primary measure of economic performance; examines growth rate. **Real vs. Nominal GDP:** Real adjusts for inflation, providing a clearer picture of growth. **Income Distribution** Analyzes income inequality (e.g., Gini coefficient). **Factors Affecting Distribution:** Education, skills, economic policies. **Environmental Sustainability** Evaluates the long-term viability of economic growth without depleting natural resources. **Sustainable Development Goals (SDGs):** Framework for addressing global challenges. **2. Government Economic Policy Tools** **Macroeconomic Policies** - **Monetary Policy:** - Managed by the Reserve Bank of Australia (RBA); uses interest rates and money supply to control inflation and stabilize the currency. - **Fiscal Policy:** - Government spending and taxation decisions aimed at influencing economic activity. - **Microeconomic Policies** - Target specific industries or sectors to improve efficiency and productivity (e.g., education reforms, trade agreements). **3. Recent Performance of the Australian Economy** - **Key Metrics:** - **GDP Growth Rates:** Recent trends in growth, recovery from economic downturns. - **Unemployment Trends:** Current rates, demographic disparities, and government responses. - **Inflation Rates:** Current inflation trends and their drivers (e.g., supply chain issues). - **Sustainability Indexes:** Assessing ecological impact versus economic growth. **4. International Trade** - **Major Trading Partners** - Identify top trading partners (e.g., China, Japan, the US) and their importance. - **Major Exports and Imports** - **Exports:** Minerals (iron ore, coal), agricultural products (wine, beef). - **Imports:** Machinery, vehicles, consumer goods. - **Changes in Trade Patterns** - Factors driving changes: shifts in global demand, trade agreements (e.g., RCEP), economic sanctions. - Potential future trends: focus on sustainable products, shifts due to geopolitical changes. **C) Law and Society and Law in Action** **1. Nature of Laws** - Laws serve to maintain order, protect freedoms, and provide a framework for resolving disputes. **2. Levels of Government** - **Three Levels:** - **Federal:** National laws, immigration, defense, foreign affairs. - **State:** Education, health, transport, criminal laws. - **Local:** Community services, zoning, local regulations. - **Division of Powers:** - Established by the Constitution to prevent the concentration of power. **3. Court System Features** - **Hierarchy of Courts:** - High Court of Australia, Federal Courts, State Courts. - Different courts handle different types of cases (e.g., criminal vs. civil). **4. Legal Personnel and Juries** - **Judges:** Interpret and apply the law; oversee court proceedings. - **Lawyers:** Provide legal representation and advice. - **Juries:** Citizens selected to determine facts in serious cases; the selection process ensures impartiality. **5. Law-Making Process** - **Common Law:** Evolved through judicial decisions and precedents. - **Statute Law:** Created through legislative processes; involves proposals, debates, and voting. **6. Types of Law** - **Public Law:** Governs the relationship between individuals and the state (e.g., criminal law). - **Private Law:** Governs relationships between individuals (e.g., contract law). - **Criminal Law:** Defines offenses against the state and prescribes punishments. - **Civil Law:** Resolves disputes between individuals (e.g., torts, contracts). - **Domestic Law:** Applies within a nation. - **International Law:** Governs relations between states (e.g., treaties, human rights). **D) Political Involvement** **1. Rights and Responsibilities** - **Democratic Rights:** Voting, freedom of speech, assembly, and the right to participate in political processes. - **Responsibilities:** Civic duties, including voting and engaging in public discourse. **2. Election Conduct** - **Election Process:** - Timelines, nomination procedures, campaigning, and voting. - **Voting Methods:** - Preferential voting, proportional representation, and electronic voting. **3. Referendums Process** - **Initiation:** Requires majority support in Parliament. - **Decision-making:** Public votes; majority must approve for changes to take effect. **4. Role of Political Parties** - **Major Parties:** Labor, Liberal, Greens; their ideologies and platforms. - **Independents:** Influence policy and governance in a hung parliament. **5. Policy Development Process** - **Cabinet Meetings:** Prime Minister and Cabinet members discuss and decide on policy initiatives. - **Consultation:** Involves stakeholders and the public for input on policies. **6. Parliamentary Dynamics** - **Parliamentary Majority:** Enables smooth passing of legislation. - **Hung Parliament:** No single party holds a majority; requires coalition-building. - **Minority Government:** A party forms government without a majority; may lead to instability. **7. Separation of Powers** - Ensures checks and balances: **Legislative:** Makes laws (Parliament). **Executive:** Implements laws (Government). **Judiciary:** Interprets laws (Courts).