Measures of Economic Performance

Question 1

What is economic growth?

Answer 1

Increase in real GDP over time.

Question 2

What is real GDP?

Answer 2

GDP adjusted for inflation.

Question 3

What is nominal GDP?

Answer 3

GDP not adjusted for inflation.

Question 4

What are key indicators of economic performance?

Answer 4

Real GDP growth, inflation rate, unemployment rate, balance of payments.

Question 5

What is inflation?

Answer 5

General rise in price level.

Measured by Consumer Price Index (CPI).

Question 6

What are the causes of inflation?

Answer 6

Demand-pull: Excess demand in the economy. Cost-push: Rising production costs.

Question 7

What is unemployment?

Answer 7

People willing and able to work but not employed.

Question 8

What are the types of unemployment?

Answer 8

Cyclical: Linked to economic downturns. Structural: Industry decline and skills mismatch. Frictional: Time between jobs. Seasonal: Linked to seasonal work.

Question 9

What is the current account in the balance of payments?

Answer 9

Records trade in goods and services, investment income, and transfers.

Question 10

What does LRAS stand for?

Answer 10

Long-Run Aggregate Supply

Question 11

What can improve LRAS?

Answer 11

Improved productivity

Question 12

What is a deficit in trade?

Answer 12

Imports > Exports

Question 13

What is a surplus in trade?

Answer 13

Exports > Imports