4.1.2 Macroeconomic indicators

• Inflation is measured using the Consumer Price Index (CPI)

  True
• The Balance of Payments summarizes a country's transactions with the rest of the world
• Match the type of macroeconomic indicator with its definition.

  Leading Indicators ↔️ Predict future economic activity

  Lagging Indicators ↔️ Confirm past economic trends

  Coincident Indicators ↔️ Reflect current economic state
• Inflation is calculated using the Consumer Price Index (CPI) and the Producer Price Index (PPI)
• Match the type of macroeconomic indicator with a key metric.

  Leading Indicators ↔️ Housing starts

  Lagging Indicators ↔️ Unemployment rate

  Coincident Indicators ↔️ Gross Domestic Product (GDP)
• GDP includes the value of intermediate goods produced within a country.

  False
• What is the definition of inflation?

  Sustained increase in price level
• What are macroeconomic indicators used for?

  Measuring economic performance
• The Gross Domestic Product (GDP) measures the total value of goods and services produced in a country over a period
• What does the unemployment rate measure?

  Percentage of unemployed labor force
• Classify macroeconomic indicators based on their timing relative to the economic cycle.

  1️⃣ Leading Indicators

  2️⃣ Coincident Indicators

  3️⃣ Lagging Indicators
• Consumer confidence is an example of a leading indicator.


  True
• What does the unemployment rate indicate?

  Percentage of unemployed labor force
• What is the primary role of GDP as a macroeconomic indicator?

  Measures overall economic output
• GDP does not account for income inequality, environmental degradation, or unpaid household work
• If the CPI rises from 100 to 110 in a year, the inflation rate is 10%.

  True
• Leading indicators predict future economic activity before it occurs
• What do coincident indicators reflect?

  Current state of the economy
• What is the definition of Gross Domestic Product (GDP)?

  Total value of all goods and services
• GDP accounts for factors like income inequality and environmental degradation.

  False
• The Consumer Price Index (CPI) measures inflation by tracking the average price change of a basket of representative goods and services
• How is the unemployment rate calculated?

  (Number of Unemployed / Total Labor Force) x 100
• Match the type of unemployment with its definition:

  Frictional ↔️ Temporary unemployment due to job transitions

  Structural ↔️ Mismatch between skills and job demands
• A trade surplus occurs when exports exceed imports
• What is one use of macroeconomic indicators?

  Assess economic performance
• Aggregation in macroeconomic indicators may mask underlying inequalities
• Housing starts are an example of a leading indicator.
• What is the purpose of leading indicators?

  Predict future economic activity
• Lagging indicators confirm patterns that have already occurred in the economy.


  True
• Match the type of macroeconomic indicator with its definition:

  Leading ↔️ Predicts future economic activity

  Lagging ↔️ Confirms past economic trends

  Coincident ↔️ Reflects current economic state
• GDP provides a comprehensive measure of a country's economic performance and living standards
• What is the definition of inflation?

  Sustained increase in price level
• Steps to calculate inflation using CPI:

  1️⃣ Select a basket of goods and services

  2️⃣ Track prices of these items

  3️⃣ Calculate the CPI

  4️⃣ Determine the inflation rate
• High unemployment can lead to reduced consumer spending and lower economic growth
• What is the definition of a trade balance?

  Difference between exports and imports
• Trade deficits can lead to a loss of domestic jobs and reduced investment.


  True
• Macroeconomic indicators are always reported in real-time with no delay.

  False