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Economics > 2.1 Measures of economic performance > Flashcards

2.1 Measures of economic performance Flashcards

1
Q

What are 2 measures of unemployment? (2)

A

The claimant count
The ILO Labour force survey

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2
Q

If someone is unemployed what are they?

A

Willing and able to work but not employed

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3
Q

If someone is underemployed what are they? (2)

A

Someone with a job but their labour is not being used to its fullest potential
People working part-time looking for a full time job

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4
Q

If someone is inactive what are they? (2)

A

Someone not actively looking for a job
Some who is not economically active

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5
Q

What is an example of someone who is not economically active? (3)

A

Children
The disabled
Pensioners

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6
Q

What are the 5 causes of unemployment? (5)

A

Structural
Cyclical
Frictional
Seasonal
Real wage inflexibility

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7
Q

What is structural unemployment? (2)

A

Skills becoming obsolete
Industries in decline of workers

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8
Q

What is cyclical unemployment?

A

Due to a lack of spending in the economy workers are made redundant

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9
Q

What is frictional unemployment?

A

When workers are between jobs

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10
Q

What is Seasonal unemployment?

A

When workers are out of work for periods in the year

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11
Q

What is real wage unemployment?

A

When there are issues with the supply side of labour

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12
Q

What is real world example of structural unemployment?

A

People operating horse drawn carriages

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13
Q

What is an example of cyclical unemployment?

A

People loosing their jobs in a recession?

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14
Q

What is an example of an occupation which would see seasonal unemployment?

A

Ski instructors, Ice cream man…..

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15
Q

What is reason that real wage unemployment might occur?

A

Because the minimum wage is too high

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16
Q

What happens to the supply of labour when migrants enter the economy?

A

the supply of labour increases

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17
Q

What is hysteresis? (2)

A

When workers are unemployed for a long time are likely to loose their skills
Workers are less motivated to work

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18
Q

What is inflation?

A

An increase of the general price of goods overtime

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19
Q

What is deflation?

A

A decrease in the general price of goods overtime

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20
Q

What happens to the cost of living when inflation occurs?

A

The cost of living rises

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21
Q

What happens to the purchasing power of money when inflation occurs?

A

The purchasing power of money decreases

22
Q

What is disinflation?

A

A falling rate of inflation

23
Q

Are prices still rising when disinflation is occurring?

A

Prices are still rising but just slower

24
Q

What is happening to the purchasing power of money when disinflation is occurring?

A

The purchasing power of money is increasing

25
Q

What are two methods of calculating inflation? (2)

A

The Consumer price index (CPI) and the Retail price index (RPI)

26
Q

What does CPI measure?

A

Household purchasing power

27
Q

How is the data used to calculate CPI collected?

A

A survey (the family expenditure survey)

28
Q

The family expenditure survey finds out what ….. spend their …… on, to create the ….. of …..

A

The family expenditure survey finds out what consumers spend their income on, to create the basket of goods

29
Q

Goods in the basket of goods are ….. based on how much …… is spent on the good

A

Goods in the basket of goods are weighted based on how much income is spent on the good

30
Q

What is an example of a good which has a higher weighting in the basket of goods?

A

Petrol, energy

31
Q

The basket of goods only represents the goods for …..

A

the average household

32
Q

Different demographics have different ……

A

Spending patterns

33
Q

CPI responds to new goods and services …… , even when …….

A

Slowly , updated regularly

34
Q

Its difficult to compare historical CPI data due to …….

A

Changes in technology

35
Q

How is the Retail price index, RPI, different to the CPI? (2)

A

It includes housing costs and payments on mortgage interest

36
Q

RPI usually has higher values than …..

A

CPI

37
Q

Who does RPI exclude? (2)

A

The top 4% of earners
Low income pensioners

38
Q

When prices rise what does CPI do that RPI doesn’t?

A

It considers that consumers switch to cheaper goods

39
Q

What are three types of inflation? (3)

A

Demand pull
Cost push
Growth in the money supply

40
Q

What does demand pull inflation mean?

A

Inflation occurs due to an increase in AD

41
Q

What does cost push inflation mean?

A

Inflation occurs due to firms facing rising costs

42
Q

What is GDP?

A

The total value of goods and services produced in a country overtime

43
Q

What can GDP be used as an indicator for?

A

The standard of living in a country

44
Q

What does total GDP represent?

A

The GDP for the whole country

45
Q

What is GDP per capita?

A

Total GDP divided by the number of people in the country

46
Q

What is real GDP?

A

Is GDP but inflation is taken into account (taken out)

47
Q

What is nominal GDP?

A

GDP but inflation is left in

48
Q

What can real values be described as?

A

The volume of national income

49
Q

What can nominal values be described as?

A

The value of national income

50
Q

What is economic growth?

A

The rate of change of output

51
Q

What is GNI?

A

The value of goods and services produced by a country overtime

Economics (6 decks)

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