National economic performance

Question 1

What is Macroeconomics

Answer 1

Macroeconomics is the study of an economy as a whole(non-specific). It considers the total value of goods and services produced in an economy.

Question 2

what is microeconomics

Answer 2

microeconomics is the study of individual markets within an economy(specific)

Question 3

what is an economy

Answer 3

an economy is a system which tries to tackle the basic economic problem of infinite wants that have to be supplied by scarce resources.

Question 4

why is macroeconomics useful

Answer 4

macroeconomics is useful as it allows us to view the country’s national economic performance, as well as compare todays markets with past economies and different countries economies

Question 5

what is an economic system

Answer 5

an economic system is used in an economy to decide what products should be produced, how they should be produced and who it will benefit.

Question 6

what is the effect of an economy producing more.

Answer 6

the more an economy produces the better it’s economy usually is

Question 7

what happens if an economy doesn’t fully utilize all the resources it has available

Answer 7

if an economy doesn’t utilize all the resources it has available to it then it may be underperforming

Question 8

what is one of the key measures of a country’s national performance

Answer 8

One of the key measures of a country’s national performance is it’s economic growth. The greater it’s growth the better of it’s economy usually is

Question 9

what is economic growth

Answer 9

economic growth is the rate of change in a country’s output

Question 10

how is economic growth measured

Answer 10

economic growth has a standard definition of measure across for each economy which is GDP

Question 11

what is GDP

Answer 11

GDP is an acronym for gross domestic product which measures the output of a country

Question 12

how does unemployment affect national economic performance?

Answer 12

it represents a waste of resources as output could be higher if those who didnt work did

it leads to poverty

Question 13

what is high unemployment rates an indication of?

Answer 13

high unemployment rates can be an indication of poor economic performance

Question 14

what 2 factors that dictate national economic performance tend to be linked

Answer 14

economic growth and unemployment rates tend to be linked

Question 15

how are economic growth and unemployment rates linked

Answer 15

economic growth and employment rates are linked as, for example fast economic growth usually leads to a decrease in unemployment rates dues to the growing economy and the need for ore jobs and vice-versa

Question 16

what is one factor aside from economic growth that can affect employment rates

Answer 16

technological change/ advancements

Question 17

what is inflation

Answer 17

inflation is the rise in average price for goods in an economy

Question 18

how is inflation considered an indicator of national performance

Answer 18

high inflation i seen as disruptive to the economy as it disrupts market knowledge of product prices, as well as decreases the value of what savings can buy

low but positive inflation is seen as desirable

Question 19

what is the inflation rate of the uk

Answer 19

in 2024 the uk’s inflation rate is currently at 2%

Question 20

what was the uk’s inflation rate in 2020

Answer 20

it was around 8%

Question 21

at what point do economists worry that inflation is getting too high

Answer 21

at 5% economists begin to worry that inflation rates are getting too high

Question 22

what is deflation

Answer 22

where an economies inflation rate becomes negative meaning there is a decrease in average prices

Question 23

why is deflation bad

Answer 23

deflation is bad as it makes it difficult for a country to grow it’s GDP and are linked to recessions

Question 24

what is the current balance of an economy

Answer 24

the current balance of an economy is a measure of the country’s flow of money in and out. It is comprised of imports and exports

Question 25

what happens if a nations imports are greater than exports

Answer 25

it means that the imports must be financed either through borrowing removing money around that is held abroad

it also means economic performance/ growth isn’t as good as it’s current accounts are in a deficit(current account deficit)

Question 26

what happens if a country’s exports are greater than it’s imports

Answer 26

if a country’s exports are greater than it’s imports it usually means it has good economic performance/growth and its current accounts are in a surplus(current account surplus)

Question 27

how do government objectives affect a country’s national economic performance

Answer 27

Governments try to manipulate their market economies to improve economic performance/growth

Question 28

what are the 4 main objectives governments set their objectives around to improve an economy

Answer 28

they usually set their objectives around decreasing unemployment, increasing economic growth, inflation and keeping current account balances relatively balanced

Question 29

why is it impossible to have zero unemployment in an economy

Answer 29

it is impossible due to frictional/ seasonal unemployment

Question 30

what is frictional unemployment

Answer 30

frictional unemployment is a short period of time where people are unemployed due to searching for other jobs

Question 31

what is seasonal unemployment

Answer 31

seasonal unemployment is a short period of time where people are unemployed due to seasonal jobs/ industries

Question 32

what do economists consider a good target for unemployment rates

Answer 32

5%

Question 33

why is high inflation undesirable

Answer 33

due to the fear that it may increase

Question 34

governments aim for their current accounts to be in balance

Question 35

what does a current account surplus usually equal

Answer 35

a strong economy

Question 36

what does a current account deficit usually equal

Answer 36

a weak economy

Question 37

why are very large account deficits dangerous

Answer 37

if countries have a large amount of debt that they can not pay back it can lead to recessions and drops in GDP

Question 38

what is fiscal deficit

Answer 38

A fiscal deficit is when government revenues are lower than their spending, and so they have to borrow money to fund their spending

Question 39

why do governments set budgets

Answer 39

to maintain a stable economy.

for example if inflation is around 2% and a country is growing and has good economic performance the government may spend install a deficit of 3% to keep accounts balanced and maintain stable debt

Question 40

what are the effects of income distribution on national performance of a country(right-wing)

Answer 40

right wing economists/politicians view unequal income distribution as positive as it motivates people to work hard and take economic risks which improves economic growth

Question 41

what are the effects of income distribution on national performance(left-wing)

Answer 41

left-wing economists/politicians view unequal income distribution as unfair

saying that everyone has a right to a certain standard of living/ welfare

the government seems to of have adopted the left wing view more with taxing the rich heavier compared to lower incomes, introducing minimum wage, maximum prices for essential goods, and providing free healthcare

Question 42

when does a fiscal deficit occur

Answer 42

it occurs when a governments spending is higher than how much it earns in a fiscal year leading it to borrowing and going in debt