Macroeconomic data: measuring income, inflation and unemployment,

Question 1

How can National Income be measured

Answer 1

1. GDP (Gross Domestic Product)
2. GNI (Gross National Income)
3. GNP (Gross National Product)

Question 2

National Income

Answer 2

National Income is the total value of goods/services a country produces: it can be split into GDP, GNP and GNI

Question 3

GDP

Answer 3

Gross Domestic Product is the total value of goods and services produced within an economy

Question 4

GNI

Answer 4

Gross National Income measures the total income earned by a country’s residents/businesses regardless of where it was earned

Question 5

GNP

Answer 5

Gross National Product measures the total value of goods/services produced by a country’s residents/businesses, regardless of where it was produced/sold.

Question 6

Pros and Cons of using GDP

Answer 6

Pros: 1. Indicator of economic growth
Cons: 1. Don’t know how that money is distributed

Question 7

Inflation

Answer 7

Inflation: ‘the rate of change of average prices in an economy - as measured by the consumer price index (CPI)

Question 8

Measures of inflation

Answer 8

CPI (Consumer Price Index)
RPI (Retail Price Index)

Question 9

CPI

Answer 9

The Consumer Price Index measures household purchasing power with a (Family Expenditure) survey to find out what households spend their income on. From this, a basket of goods is created and weighted according to the amount spent on each good

Question 10

RPI

Answer 10

The Retail Price Index is the same as CPI but also includes housing costs such as mortgage payments.

Question 11

Unemployment rate

Answer 11

The rate of people who are within the labour force and are willing and available to work but unable to find a job.

Question 12

The Claimant Court

Answer 12

Number of people claiming unemployment-related benefits such as Job Seeker’s Allowance (JSA)

Question 13

The Labour Force Survey

Answer 13

A survey which collects the number of unemployed people. Tends to be higher as people may be unemployed but not seeking JSA

Question 14

Fiscal Policy

Answer 14

Changes in taxes or government in order to stabilise the economy

Question 15

Phillips Curve

Answer 15

An inverse relationship between the rate of inflation and unemployment rate - dips slightly below the x-axis.

Question 16

Wage - Price Spiral

Answer 16

This occurs when an initial rise in wages within an economy is followed by an increase in prices which is then followed by an increase in wages. It can start with an increase in price aswell

Question 17

Bargaining Gap

Answer 17

The difference between the real wage that producers wish to offer in order to incentivise productivity and the real wage that allows firms the markup that maximises their competitiveness