1.1 the measurement of macroeconomic performance

Question 1

availability of credit

Answer 1

funds available for firms and households to borrow

Question 2

base year

Answer 2

the first year in an economic or financial index

Question 3

black (informal, shadow) market

Answer 3

economic activities that occur beneath the government’s radar

Question 4

claimant count

Answer 4

a method of measuring unemployment by counting all of those who claim the jobseekers allowance and other unemployment related benefits

Question 5

consumer prices index (CPI)

Answer 5

official measure used to calculate the rate of consumer price inflation, using a basket of common goods

Question 6

credit crunch

Answer 6

occurs when there is low availability of credit in the economy

Question 7

economic shock

Answer 7

unexpected events and their effects on economies; may be demand side or supply side

Question 8

exchange rate

Answer 8

market value of all products produced per annum by the labour and property supplied by the citizens of one country

Question 9

exports

Answer 9

domestically produced goods and services sold to residents of other countries

Question 9

full employment

Answer 9

all those willing and able to work are able to find jobs

Question 10

gross national income (GNI)

Answer 10

sum of value added by all producers who reside in a nation, plus product taxes not included in the value of output, plus receipts of primary income from abroad

Question 11

gross national product (GNP)

Answer 11

market value of all products produced per annum by the labour and property supplied by the citizens of one country

Question 12

imports

Answer 12

non-domestically produced goods and services sold to residents of this country

Question 13

index numbers

Answer 13

numbers allowing accurate comparisons over time to be made

the base value is typically 100

Question 14

inflation rate target

Answer 14

the CPI inflation rate target set by the government, which the Bank of England attempts to achieve

currently 2%

Question 15

job seeker’s allowance (JSA)

Answer 15

unemployment related benefit

Question 16

labour force survey

Answer 16

a quarterly survey of UK households recording information on the personal employment circumstances of the respondentsl

Question 17

liquidity

Answer 17

the ease with which an asset can be turned into cash without loss or delay

Question 18

macroeconomics

Answer 18

involves the study of the whole economy at the aggregate level

Question 19

macroeconomic stability

Answer 19

occurs when there is low volatility of key macroeconomic indicators

Question 20

marginal propensity to consume (MPC)

Answer 20

the propensity of an increase in disposable income that is spent on consumer goods

Question 21

national wealth

Answer 21

the stock of all goods with value in an economy

Question 22

per capita

Answer 22

per person/per head

Question 23

performance indicator

Answer 23

provides information used to judge success or failure of a government policy

Question 24

policy instrument

Answer 24

tool or set of tools used to try and meet a policy objective

Question 25

policy objective

Answer 25

target or goal policy-makers aim to hit

Question 26

price index

Answer 26

an index number showing the extend to which a set of prices has changed in comparison to the prices in the base year

Question 27

purchasing power parity (PPP)

Answer 27

adjustments of exchange rates to reflect the actual purchasing power of a currency

Question 28

retail prices index (RPI)

Answer 28

an older measure used to calculate the rate of consumer price inflation

Question 29

wealth

Answer 29

stock of assets

Question 30

weighting

Answer 30

when certain data items in a set are assigned a higher or lower importance than other data items in the set