3.1 Economic Performance Indicators PDF
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This document provides an overview of economic performance indicators, discussing different economic theories like classical economics, interventionist economics, and monetarism, with a specific focus on the Australian economy. The document also includes a research task related to the Australian economy.
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3.1 ECONOMIC PERFORMANCE INDICATORS INTRODUCTION ❖The economic performance of a nation determines the living standards and lifestyles of its citizens. ❖Government can intervene in its national economy but the degree of intervention varies from country to country. CLASSICAL ECONOMICS (ADAM SMITH)...
3.1 ECONOMIC PERFORMANCE INDICATORS INTRODUCTION ❖The economic performance of a nation determines the living standards and lifestyles of its citizens. ❖Government can intervene in its national economy but the degree of intervention varies from country to country. CLASSICAL ECONOMICS (ADAM SMITH) ❖Also called free market economy ❖Market based on supply and demand with little or no government intervention. ❖Economic resources are owned by individuals who use them to generate profit INTERVENTIONIST ECONOMICS (JOHN MAYNARD KEYNES) ❖Government needs to intervene in the economy to ensure the most efficient and fair use of resources. ❖Governments are obligated to use monetary policy (control the money supply) and fiscal policy (government budgeting and spending) to control the economy. ❖ Aim of these policies: - To minimise inflation - To maximise employment MONETARISM (MILTON FRIEDMAN) ❖Supports a free market economy with little government intervention except via monetary supply. ❖When productivity increases, the government must increase the money supply in direct proportion ECONOMIC CONDITIONS ❖During times of crisis, governments are more actively involved in a nation’s economic activity (e.g. war). ❖The Australian government has generally advocated the free market. ❖There is however a belief that government intervention is required to ensure all Australians enjoy a basic standard of living. ❖Voters include economic management as a high priority when deciding which political party to vote for. MEASURING ECONOMIC PERFORMANCE 1. Economic growth 2. Inflation 3. Levels of unemployment 4. The level of money market interest rates 5. Sustainability indexes TASK 3.1: RESEARCH ACTIVITY - Complete task 3.1 in booklet - Use research to answer : What is Australia Economy? At least 500 words to answer the question.
