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Flashcards in Economic growth Deck (24)
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1

What's the ideal inflation rate?

2-3%

2

What are some benefits of economic growth?

Consumption/production of goods and services,

3

What causes demand pull inflation?

Population growth, increased income, increased consumer confidence

4

What causes cost push inflation?

Increased oil prices/taxes/wages

5

Inflation

Persistent and appreciable rises in price levels, price increase to all goods and services over time

6

Headline rate of inflation

Unadjusted for anomalies, potentially misleading

7

Underlying inflation

Accounts for volatile factors/anomalies

8

CPI

Quarterly summary of all goods and services

9

How many categories are accounted for in the basket of goods?

11 groups, 33 subgroups, 90 classes

10

When is the cash rate reviewed?

1st Tuesday every month

11

What was the inflation rate from the 70s-80s?

8%

12

What was the inflation rate in the 90s?

3%

13

Who controls interest rates (and who has no say)?

Reserve bank of Australia, government independent

14

Price stability

Low inflation rates

15

Full employment

Everyone willing to work can find employment

16

Natural rate of unemployment

4.5-5%

17

Why is it impossible to have an unemployment rate of 0?

Frictional/structural unemployment

18

Why are growth and full employment compatible?

Reliant on expanding economic opportunities

19

Economic growth

Increasing capacity of an economy to satisfy material wants of the population

20

Nominal GDP

Value of output in today's prices

21

Real GDP

Adjusted for inflation

22

How often is inflation calculated?

Every month

23

Which type of inflation is beneficial?

Demand pull

24

Demand pull inflation

Too much money too little goods