Measuring Macroeconomic Performance Deffinitions Flashcards
Availability of credit
Funds available for firms and households to borrow
Base year
The first year in an economic or financial index.
Black (informal, shadow) market:
Economic activities that occur below the government’s radar.
Claimant account
A method of measuring unemployment by counting all of those who claim the Jobseekers Allowance and other unemployment related benefits.
CPI
Consumer prices index (CPI): Official measure used to calculate the rate of consumer price inflation, using a basket of common goods.
Credit crunch
Occurs when there is low availability of credit in the economy.
Economic shock
Unexpected events and their effects on economies; may be demand side
or supply side.
Exchange rate
The price of a currency measured in terms of another currency.
Exports
Domestically produced goods and services sold to residents of other countries.
Full employment
All those willing and able to work are able to find jobs.
GNI
Gross National Income (GNI): It is the sum of all income earned by citizens or nationals of a country (regardless of whether the underlying economic activity takes place domestically or abroad)
GNP
Gross National Product (GNP): Market value of all products produced per annum by the labour and property supplied by the citizens of one country.
Imports
Non-domestically produced goods and services sold to residents of this country.
Index numbers
Numbers allowing accurate comparisons over time to be made. The base
year value is typically 100.
Inflation rate target
The CPI inflation rate target set by the government, which the Bank of England attempts to achieve; currently 2%.
JSA
Job Seeker’s Allowance (JSA): Unemployment-related benefit.
Labour force survey
A quarterly survey of UK households, recording information on the
personal employment circumstances of the respondents.
Liquidity
The ease with which an asset can be turned into cash without loss or delay.
Macroeconomics
Involves the study of the whole economy at the aggregate level.
Macroeconomic stability
Occurs when there is low volatility of key macroeconomic indicators.
MPC
Marginal propensity to consume (MPC): The proportion of an increase in disposable income that is spent on consumer goods.
National wealth
The stock of all goods and services with value in an economy.
Performance indicator
Provides information used to judge success or failure of a government policy.
Policy instrument
Tool or set of tools used to try and meet a policy objective
Price index
An index number showing the extent to which a set of prices has changed in comparison to the prices in the base year.
PPP
Purchasing Power Parity (PPP): Adjustments of exchange rates to reflect the actual purchasing power of a currency.
RPI
Retail prices index (RPI): An older measure used to calculate the rate of consumer price inflation.
Wealth
Stock of assets
Weighting
When certain data items in a set are assigned a higher or lower importance than other data items in the set.
