Macro 3.2.1 TIGER, indicators and index numbers Flashcards
what does the TIGER anagram stand for
T = trade
I = inflation
G = growth
E = employment
R = rest
define primary and secondary income tax
primary income - the net flow of profits, interest and dividends from investments in other countries and net remittance flows from migrant workers
secondary income - the redistribution of income through current transfers, by governments, multinational organisations or charities
define demand pull inflation
when price levels increase due to an increase in demand in the economy
define cost pull inflation
when the price levels increase due to an increase in the costs of businesses. Caused by increase in commodity prices, change in exchange rates, or price shocks in other countries
2 ways inflation is commonly measured
CPI: consumer price index
RPI: retail price index
short and long run economic growth diagrams and the names of the 3 diagrams
classical, keynesian, PPF
what are the different types of unemployment
VERY - vocational
SILLY - seasonal
FOOLS - frictional (workers are searching for new jobs or are transitioning from one job to another)
SUCK - structural (immobility of labour due to a long term change in the structure of an industry, occupational or geographical)
THEIR - trade union/tradition
CHIPS - cyclical (demand deficient, lack of AD)
what are the pros and cons of unemployment
pros - greater pool of workers for firms, low inflation, impressed current account position, time for worker to find suitable job
cons - lost output, deterioration of gov finance, social costs, cost to other countries, lost income, hysteresis
define budget deficit and surplus
budget deficit - government spends more than revenue they receive
budget surplus - government revenue exceeds expenditure
define direct and indirect tax
direct tax - paid directly to the government, a tax levied on income and wealth. Cannot be passed onto someone else
indirect tax - a tax levied on spending, it can be passed onto someone else
name the different types of taxes
- income tax
- national insurance tax
- corporation tax
- inheritance tax
- VAT
- excise tax
- carbon border tax
what does it mean if a tax is regressive
a tax imposed by the government which takes a higher percentage of someones income than those on low income
define macroeconomics indicator
data which is commonly used to measure performance of an economy such as: real GDP, real GDP per capita, consumer price and retail price indices, measures of unemployment, productivity and the balance of payments on the current account
define positive and negative animal spirits
positive animal spirit - when the economy is performing well, people feel better off, therefore people feel good and economic activity increases
negative animal spirit - when economy is performing bad, people feel worse, therefore people are negative and economic activity decreases
what are the 3 types of economic indicators
leading indicators - yield curve, consumer durables, net business formations, and share prices, are used to predict the future movements of an economy. investors most interested in these at can predict the future accurately
coincident indicators - GDP, employment levels, and retail sales, are seen with the occurrence of specific economic activities.
lagging indicators - gross national product (GNP), CPI, unemployment rates, and interest rates, are only seen after a specific economic activity occurs.
define index numbers
they are used to calculate changes in the economic indicators such as GDP and inflation
index number calculation
(actual figure in selected year / actual figure in base year) x 100
percentage point change
