Measures Of Economic Performance - Definitions Flashcards
Gross Domestic Product
GDP
The total value of goods and services produced in an economy in a given time period
Economic Growth
An increase in the production of goods and services, measured by the rate of change of GDP (can
also be negative)
Nominal GDP
GDP figure calculated without adjusting for the effect of inflation
Real GDP
GDP figure calculated after adjusting for the effect of inflation
GDP per Capita
GDP divided by population size
Gross National Income
GNI
Equivalent to GDP, but counting the output produced by the citizens of an economy across the
world (rather than the output produced within an economy’s borders)
Purchasing Power Parity
PPP
An economic theory, used to adjust GDP to account for different living standards across countries
Inflation
The rate of increase of prices in an economy
Deflation
A period of falling prices
Disinflation
A reduction in the rate of inflation
Consumer Price Index
CPI
A measure of the general price level in the UK. Has been used since 2004
Retail Price Index (RPI)
A measure of the general price level in the UK - excludes pensioner households and highest income households
Which is is generally lower? CPI or RPI
CPI is generally lower
Unemployment Rate
The proportion of people in the labour force who are not in work
Labour Force
Total number of employed and unemployed workers, equivalent to the number of economically
active workers
