Economic indicators Flashcards
Define macroeconomics
The study of economy as a whole
Define economic indicator
Quantitive measure of economic performance e.g. unemployment, inflation
What are the 4 macroeconomic objectives
Low and stable inflation
Low unemployment
Positive economic growth
Balance of payments stability/equilibrium
What the secondary objectives?
Stable exchange rates Eradication of poverty Fairer distribution of income and wealth To reduce national debt General economic stability
Define economic stability
The avoidance of volatility in main macroeconomics indicators such as unemployment rates, growth rates, inflation rates, and exchange rates
Define inflation
A sustained rise in the average price level
How is inflation measured
Year on year % change in average price level
What does low inflation mean
Wages and price remain stable so firms are more likely to invest and the value of incomes doesn’t erode as fast
Devine unemployment
A situation where people are out of work, but are actively seeking work/willing and able to work
How is unemployment measured
The total number of people who are without a job but are actively seeking work as a % if the workforce
Define Economic growth
The increase in economy’s output over time
How is economic growth measured
% change in real GDP/GNP (nation income) per time period
Define GDP
The value of the total output produced in an economy over a given time period
Define balance of payments
A record of all an economy’s financial transactions with the rest of the world
How do you measure balance of payments
Financial inflows - financial outflows
