Last Min Macro

Question 1

What are Purchasing Power Parities?

Answer 1

The exchange rate of one currency for another which compares how much a basket of goods costs in each country
Shows quality of life/cost of living - as lower price will mean higher quality of life

Question 2

What is GNI?

Answer 2

The value of goods and services produced by a country over time plus net overseas interest payments and dividends.

Question 3

What is GNP?

Answer 3

The value of goods and services over a period of time through labour or property supplied by citizens, who live domestically or overseas
(Value of goods/services by citizens who live in UK or citizens who live abroad)

Question 4

What makes up National Happiness?

Answer 4

Real GDP per Capita, Health, Life Expectancy, Having People around you, Freedom

Question 5

How is CPI Measured

Answer 5

1) ONS collects prices on goods/services and updates it each month - new items are added annually
2) Prices are combined to make an overall price index - the change in this price is how inflation is measured
3) Itgerms are weighted depending on how much is spent on them - e.g. Petrol has a high weighting, so has larger effect on inflation

Question 6

How is RPI different?

Answer 6

1) Includes housing costs. mortgage payments
2) Excludes top 4% of househoilds to have a more representative average to show the true effect on cost of living

Question 7

Differences between Claimant Count and LFS

Answer 7

1) Some people are included in the claimant count - but not in the LFS, people who are fraudently claiming benefits
2) Some people are unemployed but aren’t eligible for benefits - depends on household income

Question 8

What is Structural Unemployment?

Answer 8

A long term decline in demand in an industry - leading to a reduction in employment
Issue as occupational mobility means people may struggle to get a new job