Macroeconomics Indicators

Question 1

Define real GDP

Answer 1

Value of GDP after removing effect of price changes from its value
= ensures increased GDP represents increased outputs of goods and services

Question 2

Define GDP per capita

Answer 2

Average income per person measured to compare countries in terms of standard of living

Question 3

How to measure GDP per capita

Answer 3

Real GDP total/ population X100

Question 4

Define CPI

Answer 4

Used to calculate an annual rate of inflation by calculating the average prices of spending for the average family household

Question 5

Define RPI

Answer 5

Used to measure inflation by including housing prices like mortgage interest rates, rent etc

Question 6

Define frictional unemployment

Answer 6

Short term unemployment that can be lengthened due to lack of info etc

Question 7

Define structural unemployment

Answer 7

Unemployment due to long term changes in labour market= means that some industries are growing or declining

Question 8

Define claimant count

Answer 8

Measures number of people claiming unemployment benefits

Question 9

Define LFS

Answer 9

Monthly sample of people who look for work and can’t find it

Question 10

How to workout unemployment rate

Answer 10

Unemployed/ size of labour force X100

Question 11

Define current account

Answer 11

Records nations transactions with the rest of the world in terms of imports and exports

Question 12

Define labour productivity

Answer 12

Measures output of workers
Measured per worker or per hour

Question 13

Define capital productivity

Answer 13

Measures efficiency of machinery and equipment

Question 14

List main macroeconomic indicators

Answer 14

Trade
Inflation
Growth
Employment
Redistribution of income

Question 15

Define inflation

Answer 15

sustained increase in the general price level over time, it means the cost of living increases therefore purchasing power of money decreases

Question 16

Define disinflation

Answer 16

when the average price level is still rising but at a slower extent, this means goods and services are relatively cheaper now than a year ago

Question 17

Define deflation

Answer 17

a general decline in prices for goods and services

Question 18

Describe how to use CPI

Answer 18

• Family Expenditure Survey= households fill out Fortnite period of prices of goods bought
• data created to produce basket of goods made of most popular stuff bought
  = represents average family purchases
• forms average prices of goods and services
• prices weighted based on % of income spent on each item