LS2 - Measures Of Economic Performance

Question 1

Measures Of Economic Performance

Answer 1

Rate Of Unemployment 
Rate Of Inflation/Econ G 
Balance Of Payments 
Government Budget 
Inequality
Quality Of Environment

Question 2

Index Number Equation

Answer 2

Raw Number In Period/Raw Number In Base Period x 100

Question 3

Nominal GDP

Answer 3

The value of output in an economy (without considering inflation).

Question 4

Real GDP

Answer 4

Takes inflation into account using the GDP deflator.

Question 5

GDP Deflator Equation

Answer 5

Is the price index.

Nominal GDP/Real GDP x 100.

Question 6

Long Run Economic Growth

Answer 6

Expansion of the economy’s capacity to produce goods and services.

Question 7

Short Run Economic Growth

Answer 7

Increase in real GDP over a given time period

Question 8

GDP Per Capita Equation

Answer 8

GDP In A Period/Number Of People In The Country

Question 9

Why Do We Measure GDP

Answer 9

Indicates Standard Of Living
Helps Make And Evaluate Decisions
Determines The Government’s Ability To Afford Debt

Question 10

GDP Growth Equation

Answer 10

(Current GDP - Original GDP)/Original GDP x 100

Question 11

Inflation

Answer 11

A sustained increase in the general price level of goods and services within a given time period.

Question 12

Inflation Problem?

Answer 12

How to track the prices of goods and services for the purpose of measuring inflation e.g. other factors might come into play.

Question 13

Disinflation

Answer 13

A reduction in the rate of inflation.

Question 14

Unemployed

Answer 14

Being out of work while willing and able to work.

Question 15

Economically Inactive

Answer 15

Those who can work but aren’t working or seeking work.

Question 16

Underemployment

Answer 16

Lawyer in MCDs

Question 17

Measures Of Unemployment

Answer 17

The Claimant Count

The ILO Unemployment Rate

Question 18

Claimant Count

Answer 18

Those claiming unemployment benefits

Question 19

The ILO Unemployment Rate

Answer 19

Generated from a quarterly survey of approximately 60,000 households.

Question 20

Unemployment Rate

Answer 20

Number Of People Unemployed/Labour Force x 100

Question 21

Claimant Count Disadvantages

Answer 21

Excludes people who are over pension age, under 18 and those only looking for part-time work.

Question 22

ILO Disadvantages

Answer 22

Can’t accurately decide whether someone’s ill or actively seeking work.

Question 23

Balance Of Payments

Answer 23

Records all financial transactions between residents of a country and the rest of the world.

Question 24

Primary Income

Answer 24

Income from investments.

Question 25

Secondary Income

Answer 25

Money that doesn’t results from earnings e.g.. govt aid and remittance payments.