Harrison economics. 2.1 Measures of economic performance Flashcards
What is economic growth
The rate of change of output. Rise in the value of gross domestic product. It is an increase in the long term productive potential of a country meaning an increase in the amount of goods and services a country produces. Measured by percentage change in real gdp per annum
What is GDP
Total values of goods and services produced in a country. Used to compare countries
What is real GDP
Value of GDP adjusted for inflation
What is nominal GDP
Value of GDP without being adjusted for inflation.
What is purchasing power parity
An exchange rate for one country for another which compares how much a typical basket of goods costs in that country compared to another country. Used to compare living standards.
What is inflation
Is the sustained rise in the general price level over time which erodes the purchasing power of money.
What is deflation
The sustained decrease in the price level over time . Indicates a decrease in the rate of growth of output in the economy
What is disinflation
A reduction in the rate of inflation.
What is an excise tax
A tax of a set amount e.g £1
What is unemployment
People of working age who are out of work and actively seeking work (willing+able) in the labour market. They must be able to start in the next two weeks. It represents a waste of resources so a good indicator of county’s economy
Unemployment rate
Employment rate
The proportion of the economically active population who are without a job.
is the percentage of the population of working age who are employed,
What is the claimant count
Counts the number of people claiming unemployment related benefits such as job seekers allowance .
It counts the number of claimants on a particular day each month and the number joining and leaving the count each month
The economically active
are the employed and unemployed. They are engaged in labour market and are people employers can look to recruit.
The workless are the unemployed and inactive
Activity/inactivity rate
● The activity/participation rate is the percentage of the population of working age who are economically active
whilst the inactivity rate is percentage of the population of working age who are inactive.
