9.2 Macroeconomics Indicators

Question 1

What is a macroeconomic indicator?

Answer 1

Provides info from recent economic performance for judging the success or failure of a particular type of gov policy e.g fiscal policy or monetary policy

Question 2

What is macroeconomic indicator used for?

Answer 2

Measure the performance of an economy

(Real gdp, real gdp per capita, consumer price index and measures of unemployment, productivity and the balance of payments on the current account)

Question 3

What do macroeconomic indicators do for govs?

Answer 3

Provide them with information on success of policies
(Such as fiscal policy or monetary policy)

(Can also compare UK economy with other economies)

Question 4

What is the policy indicator for the success of monetary policy

Answer 4

2% inflation target

Question 5

What are macroeconomic indicators split into?

Answer 5

Lead indicators
Lag indicators

Question 6

What are lead indicators?

Answer 6

Provide info about the future state of the economy

Question 7

How do lead indicators work?

Answer 7

Surveys of consumer business confidence and investment tensions indicate the existence of a feel-good or feel-bad factor and provide information about the likely state of aggregate demand in the months ahead

Question 8

What do lag indicators provide?

Answer 8

Information about the past about possibly current economic performance and the extent to which policy objectives such as economic growth and control of inflation have been achieved

(Data of level of gdp, current and recent employment and unemployment figures provide examples of lag indicators

Question 9

Macroeconomic indicators are presented in the form of…

Answer 9

Statistical data
(Unemployment, growth figures and projections about the number of house building starts in the case of lead indicators)
-highly dependable on the accuracy of statistics available from the government and other sources