measuring macro performance

• what are the 6 macro economic indicators

  -price stability

  -sustainable economic growth

  -reduce unemployment

  -stablegovernment budget position

  -stable balance of payments

  -redistribute income
• what is price stability

  the government wanting to keep a CPI of 2% to avoid inflation or disinflation
• what is the aim of sustainable growth

  to increase real GDP in order to increase economic wellbeing
• what's the aim of reducing unemployment

  to reduce the number of people out of work to reduce beneiftclaim and increase tax revenue
• what is the government budget position

  the relationship between government spending and tax revenue it can either be a deficit or a surplus
• why do the government want a stable budget position


  any deficit has to be financed by additional borrowing worsening the national debt
• what is the balance of payments

  the relationship between flows in and out of the UK economy
• what is meant by the redistribution of income 


  tax wealthier people more and redistribute through benefits
• what is real GDP

  the income, output or expenditure within an economy with adjusting the figures for inflation
• what is GDP per Capita

  GDP per person - allows for comparisons between economies
• define a recession


  two consecutive quarters of negative economic growth
• how is inflation measured

  consumers prices index - CPI
• what is meant by the weighted basket of goods

  650+ goods and services the average family spends the most on with things the average family spends ore on given a greater significance in the calculation
• what are the 3 other ways to measure inflation

  -core inflation

  -retail prices index

  -factory gate inflation
• what is core inflation


  inflation without food or fuel as these commodities are very volatile
• what is the retail prices index

  the same as CPI but includes house prices
• what is factory gate inflation

  looks at the price charged by producers not paid by consumers
• define unemployment


  when a person is not in work, education or training and is actively seeking employment whilst claiming job seekers allowance
• what are the 4 ways to measure unemployment

  -claimant count

  -labour force survey

  -unemployment rate

  -employment rate
• what is the claimant count

  the number of people claiming job seekers allowance
• what is the labour force survey

  includes unemployed people who ae not able to claim job seekers allowance
• what is the unemployment rate 


  percentage of working population not in work
• what is the employment rate

  the percentage o working people ho are employed
• what is the employment rate + unemployment rate

  it is not 100% due to economically inactive people
• how does productivity benefit the economy

  hepe businesses lower cost per unit making them more competitive
• what is an index number

  a way of presenting data for easier comparison
• how does an index number work

  each number is given as a percentage of an actual number from the base year