Measuring Macroeconomic Performance Deffinitions

Question 1

Availability of credit

Answer 1

​Funds available for firms and households to borrow

Question 2

Base year

Answer 2

​The first year in an economic or financial index.

Question 3

Black (informal, shadow) market:

Answer 3

​Economic activities that occur below the government’s radar.

Question 4

Claimant account

Answer 4

A method of measuring unemployment by counting all of those who claim the Jobseekers Allowance and other unemployment related benefits.

Question 5

CPI

Answer 5

Consumer prices index (CPI): ​Official measure used to calculate the rate of consumer price inflation, using a basket of common goods.

Question 6

Credit crunch

Answer 6

Occurs when there is low availability of credit in the economy.

Question 7

Economic shock

Answer 7

​Unexpected events and their effects on economies; may be demand side
or supply side.

Question 8

Exchange rate

Answer 8

​The price of a currency measured in terms of another currency.

Question 9

Exports

Answer 9

​Domestically produced goods and services sold to residents of other countries.

Question 10

Full employment

Answer 10

​All those willing and able to work are able to find jobs.

Question 11

GNI

Answer 11

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)

Question 12

GNP

Answer 12

Gross National Product (GNP): ​Market value of all products produced per annum by the labour and property supplied by the citizens of one country.

Question 13

Imports

Answer 13

Non-domestically produced goods and services sold to residents of this country.

Question 14

Index numbers

Answer 14

​Numbers allowing accurate comparisons over time to be made. The base
year value is typically 100.

Question 15

Inflation rate target

Answer 15

The CPI inflation rate target set by the government, which the Bank of England attempts to achieve; currently 2%.

Question 16

JSA

Answer 16

Job Seeker’s Allowance (JSA): ​Unemployment-related benefit.

Question 17

Labour force survey

Answer 17

​A quarterly survey of UK households, recording information on the
personal employment circumstances of the respondents.

Question 18

Liquidity

Answer 18

​The ease with which an asset can be turned into cash without loss or delay.

Question 19

Macroeconomics

Answer 19

​Involves the study of the whole economy at the aggregate level.

Question 20

Macroeconomic stability

Answer 20

Occurs when there is low volatility of key macroeconomic indicators.

Question 21

MPC

Answer 21

Marginal propensity to consume (MPC): ​The proportion of an increase in disposable income that is spent on consumer goods.

Question 22

National wealth

Answer 22

​The stock of all goods and services with value in an economy.

Question 23

Performance indicator

Answer 23

​Provides information used to judge success or failure of a government policy.

Question 24

Policy instrument

Answer 24

Tool or set of tools used to try and meet a policy objective

Question 25

Price index

Answer 25

​An index number showing the extent to which a set of prices has changed in comparison to the prices in the base year.

Question 26

PPP

Answer 26

Purchasing Power Parity (PPP): ​Adjustments of exchange rates to reflect the actual purchasing power of a currency.

Question 27

RPI

Answer 27

Retail prices index (RPI): ​An older measure used to calculate the rate of consumer price inflation.

Question 28

Wealth

Answer 28

Stock of assets

Question 29

Weighting

Answer 29

​When certain data items in a set are assigned a higher or lower importance than other data items in the set.