Measurement of Macroeconomic Objectives Flashcards
What are the 4 main macroeconomic objectives?
1) Balanced balance of payments
2) Low unemployment
3) High Economic Growth
4) Low and Stable inflation
Other objectives
1) Balanced budget
2) more equal distribution of income
3) Protection of the environment
Economic growth
the change in national income measured over a period of time
balance of payments
the record of financial transactions between the Uk and the rest of the world
Government’s budget
the value of government spending compared with the money earned through taxation over a period of itme
Distribution of income
how evenly incomes are shared between individuals and households across the economy
Policy conflict in the short run
reducing level of unemployment
prices rise at a faster rate
What is most likely lead to a deteriorated Balance of Payments?
UK labour productivity compared to the rest of the world
Reduction in current account surplus?
- growth falls
- inflation rises
- productivity falls
GDP
the value of all newly produced final goods and services produced in an economy within a given time period.
national income
the total income generated within an economy over a period of time
real GDP
- value of GPD after removing effect of inflation
- used to make comparisons between countries in terms of living standards
real GDP per capita
real total GDP / population level
What are the indicatiors for inflation
CPI
RPI
inflation
an increase in the average level of prices measured over a period of time
Labour force
those of working age who are either in work or actively seeking work
Economically inactive
those of working age who are not in work and not seeking work
Unemployment
those of working age who are currently out of work but are actively seeking it
claimant count
the number of people receiving welfare benefits for unemployment
Labour force survey
records people who are looking for work but can’t find it- regardless of whether they receive benefits or not
-used to produce an estimate of the national unemployment level
unemployment rate
number of people unemployed / size of labour force x 100
What is the BoP divided into
- current account
- capital account
- financial account
Current account
part of the BoP that looks at the net income flows earned through either trade in goods and services or the reward from investments located overseas
current account deficity
imports > exports
index number
used to show the size of changes in a variable over time
