Economics Unit 2 - The measurement of the macroeconomic performance

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What are the 4 macroeconomic objectives?
Trade, Inflation, Growth, Employment
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What are the 4 macroeconomic indicators?
Balance of payments, CPI/RPI, GDP per capita, Claimant count/Labour force survey
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When will a trade surplus occur?
Exports > Imports
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When will a trade deficit occur?
Exports < Imports
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What are the 4 sections of the balance of payments?
Trade in goods, Trade in services, Net money transfer, Net income flow
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What happens when there is a fall in the exchange rate? (Depreciation)
WPIDEC, Exports > Imports
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What happens when there is a rise in the exchange rate? (Appreciation)
SPICED, Exports < Imports
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What is inflation?
A sustained increase in the general price level
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What is the UK inflation target?
2%
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What is the difference between CPI and RPI?
RPI includes house prices
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What are the 2 causes for inflation?
Cost-push and Demand-pull
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Does inflation increase or decrease the value of money?
Decrease
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What is deflation?
A fall in the general price level, negative inflation
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What is GDP?
The total value of all goods and services
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How can growth be shown in the short run?
Increase in AD
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How can growth be shown in the long run?
Increase in productive potential
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What is an output gap?
A measure of the difference between actual growth and trend growth
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Card 2

Front

What are the 4 macroeconomic indicators?

Back

Balance of payments, CPI/RPI, GDP per capita, Claimant count/Labour force survey

Card 3

Front

When will a trade surplus occur?

Back

Preview of the front of card 3

Card 4

Front

When will a trade deficit occur?

Back

Preview of the front of card 4

Card 5

Front

What are the 4 sections of the balance of payments?

Back

Preview of the front of card 5
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