macro indicators Flashcards
what are macro indicators
statistics used to assess the health and performance of an economy
list 6 macro indicators
- GDP growth
- inflation
- unemployment
- balance of payments
- interest rates
- exchange rates
GDP
key measure of national insurance, total market value of all goods and services produced over a period of time, including indirect tax
inflation
The sustained increase in the general price level of goods and services in an economy.
unemplyment
The percentage of the labor force that is unemployed but actively seeking employment
interest rates
refer to the cost of borrowing money or the return on savings
They are set by central banks (e.g., the Bank of England in the UK) and influence economic activity
balance of payments
a record of all economic transactions between a country and the rest of the world, including trade, income, and capital transfers, over a specific period
exchange rates
a relative price of one currency expressed in terms of another currency (or group of currencies)
what does a cut in income tax do
stimulus to increase consumption
what is mini budget
is a small-scale financial statement or fiscal update issued by a gov, typically outside of the regular annual budget cycle.
It is usually introduced to address urgent economic issues, make policy adjustments, or respond to unexpected financial circumstances
features of mini budget
- targeted changes
- short term focus
- government response
- without parliamentary approval
3 targeted changes in mini budget
Focus on specific areas like
- taxation
- public spending
- economic stimulus
Short-Term Focus of mini budget means
Unlike a full budget, it does not cover an entire fiscal year (fiscal year is between UK1st April - 31st March)
Government Response in mini budget is
Often introduced in response to economic crises, inflation, recession, or political needs.
without parliamentary approval of mini budget
Depending on the country, some mini-budgets can be implemented quickly without extensive legislative processes.
GVA
gross valued added at basic prices minus indirect taxes and subsidies on goods
What is ‘the basic’
-when calculating (GDP) at factor cost from GDP at market prices
indirect taxes minus subsidies
GDP at market price
is main headline figure for national insurance because the data is quickly available
rate of growth of the GDP is the main indicator of the growth of the economy
GNP
gross national product at market prices which are measures of the domestic output of the country, measured minus how much they have used from their savings
What are transfer payments?
Transfer payments are payments made by the government to individuals without any exchange of goods or services.
True or False: Transfer payments are a form of government spending.
True
Fill in the blank: Transfer payments include social security, unemployment benefits, and _______.
welfare payments
What is the primary purpose of transfer payments?
The primary purpose of transfer payments is to provide financial assistance to individuals in need.
Multiple Choice: Which of the following is NOT a type of transfer payment? A) Social Security B) Unemployment Benefits C) Public Education Funding
C) Public Education Funding
How do transfer payments impact the economy?
Transfer payments can stimulate economic activity by increasing consumer spending among recipients.
True or False: Transfer payments are typically funded through taxation.
True
Short Answer: Name one example of a transfer payment program.
Medicaid
What is the difference between transfer payments and government purchases?
Transfer payments do not involve the purchase of goods or services, while government purchases do.
Multiple Choice: Which demographic is most likely to benefit from transfer payments? A) High-income individuals B) Low-income individuals C) Corporations
B) Low-income individuals
True or False: Social Security benefits are considered transfer payments.
True
Fill in the blank: _________ payments are made to individuals who are unemployed and seeking work.
Unemployment
Which of the following is NOT an example of a transfer payment? A) Welfare B) Subsidies C) Public Education
C) Public Education
List one example of a transfer payment aimed at supporting low-income families.
Supplemental Nutrition Assistance Program (SNAP)
What is national income a measure of?
National income is a measure of the total economic output of a country.
what is National income is used to do
is used to compare the economic performance of different countries
Which of the following is NOT a reason for measuring national income?
A) Economic planning
B) Assessing living standards
C) Determining tax rates
D) Predicting weather patterns
D) Predicting weather patterns
Why is it important to measure national income over time?
Measuring national income over time helps in analyzing economic growth and cycles.
What is the definition of purchasing power parity (PPP)?
Purchasing power parity (PPP) is an economic theory that compares different countries’ currencies through a market ‘basket of goods’ approach.
True or False: Purchasing power parity suggests that in the long run, exchange rates should equalize the price of identical goods in different countries.
True
Fill in the blank: The concept of purchasing power parity is often used to compare the ________ between countries.
standard of living
Which of the following is a key assumption of purchasing power parity? A) Markets are perfectly competitive
B) There are no transportation costs
C) Goods are identical across countries
D) All of the above
D) All of the above
How does purchasing power parity help in economic analysis?
Purchasing power parity helps in economic analysis by providing a method to compare economic productivity and standards of living between countries.
why can national insurance be accurate
due to secret economy such as tax evasion the stats are inaccurate
big max index
the market is not equal and needs comparative figures so take a big mac which is sold globally, then calculate average value
3 ways to calculate national income
- national output (0)
- national expenditure (E)
- national income (Y)
O=E=Y
