Economic Indicators

Question 1

GDP: what is it and how do you measure % growth

Answer 1

total value of new final g/s produced during a period of time (aggregate measure)
(data 2 - data 1)/data 1 x 100

Question 2

what are narrow economic indicators

Answer 2

CPI, interest rates, stock mkt indices

Question 3

what is a leading indicators

Answer 3

predict future changes, changing before direction becomes evident in rest of economy

Question 4

what are 4 examples of leading indicators

Answer 4

1. share prices
2. bussiness/consumer confidence
3. stock levels held by firms
4. employment vacanies

Question 5

what is a coincident indicator

Answer 5

move in line with economic activity

Question 6

what are 4 examples of coicident indicators

Answer 6

1. manufacturing output
2. production of building materials
3. sales of consumer durables, retail and cars
4. GDP

Question 7

what is a lagging indicator

Answer 7

shows changes after trend has been confirmed

Question 8

what are 4 examples of lagging indicators

Answer 8

1. interest rates
2. UE
3. Inflation rates
4. consumer debt

Question 9

what are 2 further explanations for indicators

Answer 9

1. pro cyclical: move in line with level of econ activity (GDP, infation)
2. Counter Cyclical: opposite to economy (UE increases, economy decreases)

Question 10

what happened during the COVID 19 Recession (5 points)

Answer 10

1. lower demand
2. 7.4% UE 2020 (high underutilisation)
3. Inflation: -0.7% (low wages, import price low, houseprice low)
4. Growth: - 6.3%
5. spending on non essentials low