Macroeconomic objectives

Question 1

What is economic growth?

Answer 1

It measures the value of goods and services and the economy’s productivity. National income/GDP

Question 2

What is Balance of Payments?

Answer 2

Records all financial transactions between consumer,business and government.
Current account
Trade in goods
Trade in services
Primary income - dividends, interest and migrant remittances from abroad.
Secondary income- money sent home by migrant workers.

Question 3

Fair distribution of wealth and income

Question 4

Full employment/Low unemployment

Answer 4

Measures unemployment rate
Labour Force Survey
Claimant Count

Question 5

Why is a labour force survey more reliable than a claimant count?

Answer 5

Because a labour force survey accounts for everyone actively seeking a job in 1 month whereas claimant count it depends on the people deciding to claim the benefits of it and not everyone who has access of claiming it claims it.

Question 6

How so you work out Gdp per capita

Answer 6

Real Gdp/population

Question 7

How do you measure price stability?

Answer 7

It’s about the rate of inflation
Consumer price index (CPI)
Retailer price index (RPI)
BASE NUMBER FOR INDEX NUMBERS IS ALWAYS 100

Question 8

What is a Policy objectives and Policy instruments?

Answer 8

Policy objective - A target that is set to achieve macroeconomic objectives.
Policy Instrument - A tool used to help achieve that objective