Booklet 1- The measurement of economic performance

• Economic growth: The increase in the value of goods and services produced by an economy over a period of time. measured in GDP per capita
• Inflation: the sustained rise in the average price level of goods and services in an economy over a period of time
• Unemployment: number of people look for work but cannot find a job.
• Rate of unemployment: The number of people unemployed as a percentage of the labour force.
• Balance of payments: a record of a country’s international transactions and the net flow of money between countries
• Budget deficit: when government spending is greater than its revenue
• Budget surplus: when government spending is less than its revenue
• Recession: when there’s negative economic growth for atleast two consecutive quarters.
• When in recession there’s typically a fall in the demand, low levels of investment and rising unemployment during a recession
• Real income: a measure of the amount of goods and services that households can afford to buy. Adjusted for inflation