Macroeconomic indicators

Question 1

What is GDP?

Answer 1

• The quantity of goods ad services produced in an economy.

-A rise in economic growth means there has been an increase in national output.

Question 2

What is Real GDP?

Answer 2

• The value of GDP adjusted for inflation.

-For example: if the economy grew by 4 percent since last year, but inflation was two percent, real economic growth was 2 percent.

Question 3

What is Real GDP per capita?

Answer 3

• The value of real GDP divided by the population of the country.

Question 4

What are CPI and RPI?

Answer 4

• Measures of inflation in the UK
• CPI (Consumer Price Index)
• RPI (Retail Price Index)

Question 5

What does RPI include that CPI doesn’t?

Answer 5

• RPI includes housing costs, such as mortgage interest and council tax.
• This is why RPI tends to have a higher value than CPI.

Question 6

What is the Family Expenditure Survey?

Answer 6

• The survey finds out what consumers spend their income on.
• From this, a basket of goods is created. The goods are weighted according to how much incomes in spent on each item.

Question 7

What are the two main measures of unemployment in the UK?

Answer 7

-The Claimant Count.

-The International Labour Organisation and the UK Labour Force Survey.

Question 8

What is the Claimant Count?

Answer 8

-This counts the number of people claiming unemployment related benefits, such as Job Seeker’s Allowance (JSA). They have to prove they are actively looking for work.

Question 9

What is the ILO and the LFS?

Answer 9

-It directly asks people if they:
- Been out of work for 4 weeks.
- Able and willing to start working within two weeks.
- Workers should be available for one hour per week, part time unemployment is included.

Question 10

What is Productivity?

Answer 10

-Output per worker per period of time.

-Measures efficiency of production.

Question 11

What is the balance of payments?

Answer 11

• A record of all financial transactions made between consumers, firms and the government from one country or other countries.

-States how much is spent on imports and the value of exports.

Question 12

What are imports?

Answer 12

-Goods and services bought from foreign countries and they are negative on the balance of payments. An outflow of money.

Question 13

What are exports?

Answer 13

-Goods and services sold to foreign countries, and are positive in the balance of payments. An inflow of money.

Question 14

What are the balance of payments made up of?

Answer 14

-The current account
-The capital account
-The official financing account