1) Macroeconomic indicators Flashcards
What are macroeconomic indicators?
In order to asses how close you are to achieving economic objectives you have to examine the data from a range of macroeconomic indicators. Each indicator focuses on an economic variable that measures economic performance.
The Macroeconomic Indicators:
- Real gross domestic product (GDP)
- Real GDP per capita
- consumer price index (cpi) and retail price index (rpi)
- measures of unemployment
- productivity
- current acc on the bop
What is Real GDP?
GDP is the measure of the national income of an economy. It is based on the value of all incomes earned in an economy over a period of time. Real GDP measures the value GDP after removing the effect of price changes from its value.
What is real GDP per capita?
RGDP is often used to compare countries standard of living enjoyed by the population. To make comparisons more meaningful, we take the average income per person. This is known as RDGP per capita. Formula: rgdp/pop level
What is inflation?
An increase in the price level over time.
forms of measuring inflation?
- consumer price index (cpi)
- retail price index (rpi)
What is the CPI?
Measures change over time in the prices paid by consumers for a representative basket of goods and services
What is the RPI?
an unofficial statistic that measures consumer inflation
What is unemployment?
those of working age who are currently out of work but are actively seeking work
Measures of unemployment:
- Claimant count
- The labour force survey
What is the claimant count?
Number of people receiving welfare benefits for being unemployed (JSA)
Formula for unemployment rate
( number of people unemployed/size of labour force ) x 100
What does productivity mean?
Productivity measures how much output is being produced by each unit of labour.
Why is improving productivity beneficial?
Improvements in productivity leads to economic growth.
What does the current acc on the bop concern?
It concerns foreign trades:
- exports of goods
- imports of goods
