1.2 - Macroeconomic indicators

Question 1

What is the consumer often referred to as?

Answer 1

Heart of Economics

Question 2

What is full employment?

Answer 2

Always some unemployment, full employment minimises unemployment.

Question 3

What is our price stability number?

Answer 3

2%

Question 4

What is balancing the budget?

Answer 4

Budget is where we have tax and spending plans announced by the government.

Question 5

What is a budget deficit?

Answer 5

When we spend more than we recieve.

Question 6

What are the cons of borrowing money?

Answer 6

Pay interest, and have to pay the money back.

Question 7

What are the four main indicators to tell us how a country is doing?

Answer 7

GDP (Real GDP per Capita)
CPI and RPI (Consumer and Retail Price Index)
Unemployment figures
Current Account of the balance of payments.

Question 8

What indicators are known as lag indicators?

Answer 8

Unemployment, Inflation and Balance of Payments.

Question 9

What are Lead indicators?

Answer 9

Provide information on what may happen less, consumer and business confidence.

Question 10

What is a nominal rise?

Answer 10

Not adjusted rise.

Question 11

How do you calculate the real increase in GDP?

Answer 11

Take into account the price rises, take away inflation.

Question 12

What is GNI?

Answer 12

Gross National Index is another way of measuring the size of the economy.
GNI = GDP + Net property income from abroad (NPIA)

Question 13

What is the economic cycle?

Answer 13

Where actual growth varies around trend.

Question 14

What is a positive output gap?

Answer 14

Where actual growth is above the trend rate.

Question 15

How do you get a positive output gap?

Answer 15

High demand for goods and services.

Question 16

What is derived demand?

Answer 16

Demand for the workers that made those goods and services.

Question 17

What does derived demand result in?

Answer 17

Falling unemployment.

Question 18

Benefits of low unemployment?

Answer 18

Low benefits paid
Increase in tax paid
Increase in living standards.

Question 19

What does RPI stand for?

Answer 19

Retail Price Index

Question 20

What does CPI stand for?

Answer 20

Consumer Price Index

Question 21

Who uses the CPI?

Answer 21

Government

Question 22

What does the RPI include that CPI doesn’t?

Answer 22

Mortgages, debt taken on when purchasing a house.

Question 23

What is disinflation?

Answer 23

When inflation goes down (NOT PRICES).

Question 24

What is deflation?

Answer 24

When prices decrease, has to be a negative number.

Question 25

What is a weighted index?

Answer 25

Reflects what we spend our money on.

Question 26

When may RPI be a better index to use?

Answer 26

If you have a mortgage.

Question 27

What is the claimant count?

Answer 27

Number of people claiming benefits and out of work.

Question 28

What is the ILO?

Answer 28

International Labour Organisation - Survey on Unemployment.

Question 29

What is the current account?

Answer 29

A monetary value of goods and services imported and exported.

Question 30

What are transfer payments?

Answer 30

Payments from the government to benefit recipients.

Question 31

What is the hidden economy?

Answer 31

The "black" economy, illegal and under the table that the government doesn't see.

Question 32

Why is teachers pay not a transfer payment?

Answer 32

Teachers not on benefits, earnt the money not benefits.

Question 33

How are index levels used?

Answer 33

Designed to measure magnitude of economic changes over time.

Question 34

How do you calculate index levels?

Answer 34

year of interest / base year * 100

Question 35

What are the four economic cycle processes?

Answer 35

Boom Recession Slump Recovery

Question 36

What occurs during boom phase?

Answer 36

The economy is hot and most people have jobs. It may be hard for businesses to recruit workers. Imports will be flowing into the UK.

Question 37

What happens during recession phase?

Answer 37

Economy is slowing People may be losing their jobs. Businesses may be worried and will stop investing.

Question 38

What happens during the slump phase?

Answer 38

Economy is in trouble and many may be out of work. Confidence is low and economic activity may be at a all time low.

Question 39

What happens during recovery phase?

Answer 39

Economy is starting to pick up and firms start to hire again. Confidence grows, people start spending and the cycle begins again.

Question 40

What is the link between GDP, national income and national expenditure.

Answer 40

They are all the same, all equal each other.

Question 41

What does the letter Y symbolise in economics?

Answer 41

National Income, proxy for GDP.

Question 42

What are the factors of production?

Answer 42

Land Labour Capital Resources.

Question 43

What does more saving result in?

Answer 43

Less consumption.

Question 44

What is it called when households start to save money? (circular flow)

Answer 44

Leakage.

Question 45

What is a closed economy?

Answer 45

No international trade.

Question 46

What are the three different types of leakages?

Answer 46

Tax Imports Savings

Question 47

What are the three different types of injections?

Answer 47

Investment Government Spending investments

Question 48

What is the link between deflation and buying?

Answer 48

Buyers Strike - People wait until prices decrease.