The measurement of macroeconomic performance

Created by: Tanya Haldipur
Created on: 07-04-14 12:10

Aggregate demand

Total demand in the economy made up of consumption, investment, government expenditure and net exports. Known by the identity C + I + G + (X-M)

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Aggregate supply

the total value of goods and services supplied in the economy.

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Economic growth

the capacity of the economy to produce more goods and services over time. (plus diagram)

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Gross domestic product (GDP)

the total value of goods and services produced in the economy

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Negative output gap

where the economy is producing less than its trend output

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Positive output gap

When actual GDP exceeds trend GDP increasing inflationary pressure.

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Trade-off

where one macro-economic objective has to be curtailed in favour of another objective

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Imports

goods or services purchased from abroad e.g. manufactured goods, fuel

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exports

g/s sold abroad e.g. IT services, financial etc

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Employment

where labour is actively engaged in a productive activity usually in exchange for payments such as wages

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Unemployment

those without a job but who are seeking work at current wage rates and are able to start in 2 weeks. The current rate is 7.1%

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Exporting

the sale of g/s to a foreign country - generating income for the home country

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Importing

the purchase of g/s from abroad - leads to expenditure for the home country

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Economic indicators

economic statistics that provide information about the expansions and contractions of business cycles

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Nominal GDP/ national income/ output

GDP/ income/ output figures not adjusted for inflation

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Real GDP/ national income/ output

these are figures adjusted for inflation

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GDP per capita

GDP divided by the population - a measure of living standards

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Index numbers

A weighted average of a group of items compared to a given base value of 100

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weighting

where a commodity is given a weighting proportional to its importance in the general pattern of consumer spending.

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Other cards in this set

Card 2

Front

the total value of goods and services supplied in the economy.

Back

Aggregate supply

Card 3

Front

the capacity of the economy to produce more goods and services over time. (plus diagram)

Back

Card 4

Front

the total value of goods and services produced in the economy

Back

Card 5

Front

where the economy is producing less than its trend output

Back

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The measurement of macroeconomic performance