lesson 2 Flashcards
define economic growth
an increase in real national output
what is an economic cycle?
When actual growth varies/changes/fluctuates around the trend
when do we have an output gap?
if the actual is above or below the trend
what are the four main government objectives?
high economic growth
low unemployment
low inflation
reasonable balance of payments
what is Yfe?
number of vacancies matches the number of job seekers
what indicators in macro economic show how a country is functioning?
BOP
GDP
CPI and RPI
unemployment
indicators such as growth, unemployment and inflation are known as what type of indictors?
lag indicators. as they tell us what has happened
what do lag indicators tell us about the four main macro indicators?
they tell us what has happened
what do lead indicators tell us about the four main macro indicators?
they tell us information on what might happen next
what is GDP used to measure?
the value of all the goods and services produced in the economy
what are the three main sectors of GDP?
manufacturing, agriculture and the services industries
how do you figure out the REAL GDP?
the nominal rise value - the rate inflation is running at
what is the GNI?
our own income and the income from abroad
this is important because many developing counties depend on remittance money
what is the RPI?
headline rate of inflation.
weighted index of inflation.
a rate of inflation that is based on the percentage change in costs for goods and services
what is the CPI?
it is used when calculating increases/ changes to benefits and pensions.
a weighted index of inflation.
it measures the average changes in prices paid by consumers for goods and services over time
what does the RPI include?
mortgages rates which includes interest rates which are the main costs of houses
what is the RPI effected by?
changes in interest rates because it includes them and they are the main costs of a house
what is the CPI and RPI known as in terms of a rate of inflation?
a weighted price index
what do we mean when we refer to the RPI and CPI as weighted price indexes?
we want the index to reflect what we actually spend our money on
what is the claimant count?
the number of people out of work and claiming benefits
what is the ILO survey?
a quarterly sample survey of households which asks questions about their labour market status (unemployment) it measures the amount of people who have been unemployed for a minimum of four weeks and are ready to start working in the next two weeks
why is the claimant count not good for international comparison?
each country does it differently so we cant compare them
why is the ILO survey better than the claimant count?
because it is done the same internationally so we can use it to compare data
why is the claimant count better than the ILO survey?
because its easier to do than the ILO one.
find out the data faster.
good way to see how your own country is functioning with unemployment rates
what is a flexible labour market?
when its easy to hire and fire people
what is a trade deficit?
when we import more than we export
what does BOP tell us about a country on a world stage?
how competitive a country is on the world stage through the amount we are importing and exporting
