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Basic Economics Revision

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REVISION - SKILLS TEST
Year 9 Economics and Business
Circular Flow of Income
Leakages(Leaks out)
1.
S – Savings
2.
I – Imports
(Money out for goods in)
3. T- Taxation
Injections(Comes into)
I
1.
C – Credit
2.
E – Exports
3.
W – Welfare
4.
I – Investments
5.
G – Government spending
What is “opportunity cost”?
Whenever we make a choice between
two or more alternatives, we may gain
the benefits of the one we choose but
we lose any benefits that may have
come from choosing the other.
This is known as opportunity cost
because we lose out on the
product/opportunity that we do not
choose.
You only have $6 in your pocket, you have to
choose between a burger for $4 or a drink and
fries for $3each. If you choose the burger, you
will have to give up the fries and drink. The
opportunity cost is the ………….. If you choose the
fries and drink, you miss out on the burger. The
opportunity cost is the ……………….
1. Traditional or subsistence economy
In a traditional or subsistence economy, producers are self-sufficient,
producing enough to survive, rather than aiming to make a product.
Money is not used. Eg. Moneyless Man and River Cottage.
2. Market capitalist economy
In a market capitalist economy such as Australia, producers exchange goods
and services with consumers in return for money. This exchange takes place
in a market, which may or may not be an actual physical space. Eg. Most
countries in the world.
3. Planned capitalist economy
In a planned capitalist economy, individuals and firms own the
productive resources but the government determines ‘what to
produce’, ‘how to produce’ and ‘for whom to produce’. This type of
economy does not currently exist.
Types of
Economic
Systems
KEY PARTICIPANTS IN THE
ECONOMY
What impact might the following have on the level of
goods and services sold by Australian businesses:
1. Households decide to save a larger
proportion of their income.
• The level of goods and services sold by
Australian businesses will …….
What impact might the following have on the level of goods
and services sold by Australian businesses:
Financial intermediaries make it easier
for consumers to acquire credit cards.
•
The level of goods and services sold by Australian
businesses will …….
What impact might the following have on the level of
goods and services sold by Australian businesses:
Governments decide to increase the level of
taxation for households.
•
The level of goods and services sold by Australian
businesses will …….
What impact might the following have on the level of goods and
services sold by Australian businesses:
Governments increase the level of welfare payments.
•
The level of goods and services sold by Australian businesses will ……
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