Macro objectives: meaning and measurement

• What is an economic indicator?

  A quantitative measure of economic performance eg unemployment, inflation
• What is economic growth?

  Increase in the economy's output overtime, measured by percentage change in real GDP/ GNP per time period.
• What is inflation?

  A sustained rise in the average price level.
• What is unemployment?

  A situation where a person doesn't have a job but is actively seeking work.
• What is the balance of payments?

  A record of all of an economy's financial transactions with the rest of the world
• What is economic stability?

  The avoidance of volatility in the main macroeconomic indicators such as unemployment rates, growth rates, inflation rates and exchange rates.
• what is gross domestic product?

  The value of the total output produced in an economy over a given time period.
• What is the unemployement rate?

  a situation where people are out of work, but are actively seeking work/ willing and able to work as a percentage of the workforce
• What is the population of working age?

  Men and women aged between 16-64
• What is the labour force/ economically active?

  Those who are in work or actively seeking work
• What is economically inactive?

  People aged 16-64 who are not involved in the labour market- students, early retirees, long-term sick
• what is the labour force participation rate?

  The percentage of the population of working age who are economically active
• What is long term unemployment?

  Unemployment lasting more than a year yet seeking a job.
• What is macroeconomics?


  The study of the economy as a whole
• What is gross national product?


  money evalutation of income accruing to a nations citizens irrespective of the location of the factors of production that generate it.
• What is the inflation rate?


  The percentage change in the average price level over a period of time
• What is purchasing power?


  the number of goods or services that a certain amount of money can buy at a given time
• What is deflation?


  The situation where the average price level is falling
• What is the comsumer price index (CPI) ?


  Measure of inflation calculated by ONS. Measures changes in price of basket of goods and services
• What is sustainable economic growth?


  Occurs when the needs of the current generations are met, without comprimising the ability of future generations to meet their own needs.
• What is sustained economic growth?


  A continued and steady increase in output. Both potential and actual growth must occur at the same time
• What is national income?


  The monetary evaluation of the total ouput produced in a country, within a time period, usually a year
• What is national wealth?


  The monetary evaluation of the stock of money and goods that a nations citizens own at a point in time
• What is potential growth?


  This occurs when there is an increase in the productive capacity of the economy
• What is actual growth?


  Occurs when an economy produces more goods and services
• What is transfer payment?

  A payment made or income received which no goods or services are paid for, such as benefit payment
• What is output gap?


  Occurs when the output of an economy is below potential output. Potential growth is growing faster than actual output therefore potential growth is greater than actual growth.
• What is GDP per capita?


  Total GDP divided by each person
• What is real GDP?


  The total value of an economy's output in a time period adjusted to take inflation into account
• What is nominal GDP?

  The total value of an economy's output in a time period measured using the prices of that time period
• What are living standards?

  The material well being of the average person in a given population
• What is the informal economy?

  Activites that have market value but are not formally registered or protected by the state
• What is the black economy?

  Economic activity thay occurs outside the prevailing laws and regulations of society
• What is balance of payments surplus?

  Country exports more than it imports
• What is balance of payments deficit?

  Country imports more than it exports
• What is balance of trade?

  Exports- imports (also called visible trade)
• What is exchange rate?

  Rate at which one currency will be exchanged for another currency
• What is appreciation?

  Increase in the value of assets overtime
• What is depriciation?

  Decrease in the value of assets overtime
• What is hot money?

  Currency that quickly and regularly moves between finanical markets