Other Macroeconomic Indicators Flashcards
Give me 2 definitions for inflation
The rate of change in the average price level over time
OR
The sustained increase in the cost of living/ fall in the purchasing power of money
How to measure inflation
CPI - consumer price index (prefered measure)
Currently at 1.7%
RPI - retail prices index
What is CPIH
CPI plus owner-occupier housing costs (amount you pay to rent a property) and council tax
Differences between RPI and CPI
RPI more inclusive than CPI
Includes mortgage interest payments and council tax
Tends to be above CPI
Excludes top and bottom 4% population as they aren’t representative of the average household
But discredited as a measure
Mortgage payments distort the figure - replaced by CPIH
When did ONS stop using RNI to measure inflation
2003
starting using CPI instead
Claimant count is…
No. of people claiming New Style Job Seekers Allowance
Measure of unemployment
You can claim claimant count if…
Unemployed
Or work less than 16 hours a week
Can be claimed part of universal credit or separately
Labour Force survey is…
Measure of unemployment
Quarterly survey
60000 households compiled by ONS
Studying employment circumstances of UK population
Unemployment rate
Proportion of the economically active population who are unemployed
Surplus is…
sum of exports, goods and services, investment income and transfers is greater than imports
Deficit is…
sum of exports, goods and services, investment income and transfers is less than imports
What is balance of payments divided into
The Current Account
The Financial and Capital account
Factors included in current account are…
Trade in goods
Trade in services
Investment income
Transfers
Factors included in Financial and Capital account
Transactions in financial assets
Investment flows
Government transactions
Trade in good measures…
Measures the net exports of visible goods (X-M) Exports - Imports
