The Average Australian's Standard of Living Continues to Improve

question 34

Essay

The average Australian's standard of living continues to improve.This shift in income has been linked to two key factors.What are these factors? Provide explanatory comments on each factor.

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Definitions:

Recessionary Gaps

Situations where an economy's actual output is less than its potential output, often characterized by unemployment and underutilized resources.

Natural Rate

The natural rate often refers to the unemployment rate when the economy is at full capacity, balancing the number of job seekers with job vacancies without accelerating inflation.

Recessionary Gap

A situation in macroeconomics where actual output is less than the potential output of an economy, often marked by high unemployment.

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, assuming that the prices of inputs remain constant.