Student Learning Continuity Program

3rd July, 2020: Economics and Commerce

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Topic: Economics and Commerce

Presenter: Jeffery Ogamauri

Printable summary:

Summary:

• Business is vital to the economy:
  • availability of goods and services – prices go lower, people can access the things they need
  • creates economic growth – when business produces many products and services, many economic activities are occurring, the economy becomes strong.
  • improves standard of living – people can afford things they need to improve their lifestyle
• Economic Problems:
  • Scarcity of resources – prices go up, or are unavailable
• Production:
  • enhances specialization
  • division of labour – different people produce different things that are needed
  • creates interdependency
  • Factors of production:
    • Labour – workforce participation rate, employment, SI has high levels of unemployment
    • Land – availability of land and sea resources
    • Capital – infrastructure, investment, economic development
    • Enterprise – management of the resources available, opportunities, risks, initiatives, profit-motivators
  • Industries:
    • Primary Industries – raw materials
    • Secondary industries – manufacturing – changing raw materials into finished products
    • Tertiary sector – provision of services by non-profits, NGOs (Non-Government Organisations), volunteers, etc.
  • 4 Basic Economic Questions – to solve the economic problems
    • What to produce out of the limited resources?
    • How much? Quantity?
    • How to produce?
    • For whom are we producing the resources? What is the market?
  • Economies – complex systems as production of a huge variety of goods and services in various industries.
    • Traditional Economy – olden times
    • Cash Economy  – cash-based
    • Dual Economy – traditional and cash operating together
    • Mixed Economy – government and business sector involved
    • Planned and common economy – government involved in all aspects of the system, government controls the whole system
  • Economic policies
    • Aims:
      • Economic growth
      • Steady prices – limit inflation
      • Full employment
      • Healthy international trade relations
    • Monetary Policy – regulating prices, guiding money supply and interest rates, operated by the Central Bank
    • Fiscal Policy – operated by Central Government, budgets for Government activities passed by Government annually to be undertaken by Government ministries.
  • Production, consumption and price:
    • Productivity – high levels enhances standard of living
    • Price often determines consumption and production – when prices are low, consumption is high. When price is high, encourages production.
    • Supply and demand
    • Price and inflation – affects all users of goods and services. Government has a responsibility to keep prices low enough for population to afford
    • Production and international trade – know how to calculate balance of payments, balance of merchandised trade, current accounts, capital accounts, etc.
      • Balance of payments – current account and capital account
      • Current Account:
        • Balance of merchandise trade
        • Service account
        • Transfer account
      • Balance of Capital Account:
        • Private sector
        • Government sector
      • Trade protections:
        • Tariffs
        • Quotas
        • Embargoes
        • Red tape
      • World Market Prices
      • Exchange Rates
      • Business Organisation – sole proprietors, departments of business, companies (private, public), cooperative (consumer or producer), joint ventures

Click on this link to see a collection of resources for Senior Secondary Economics