Measuring Economic performance

Question 1

List the macro objectives

Answer 1

EG
Price stabilty
Unemployment rate
Balance of payments in equilibrium

Question 2

What is economic growth?

Answer 2

AN increase in national output measured by real GDP

Question 3

Tell all about EG

Answer 3

central aim
2-3% target
Sustianable and long term

Question 4

Why is sustainable growth wanted?

Answer 4

Reduce likelyhood of demand pull inflation and less stress on evironment

Question 5

What are impacts of a strong EG

Answer 5

Higher income
Higher standard of living
Lower unemployment
Better gov budgets

Question 6

Give real world values of eocnomic growth and describe

Answer 6

2020 -11% (covid)
2021 7.6% (rapid recovery)
2022 4.1% (decreasing rate but still growth)

Question 7

What does CPI measure?

Answer 7

Measures price chnages to a ‘houhold basket’ of Around 750 g/s that an avergae household would purchase

Question 8

Talk about the ‘household basket’

Answer 8

g/s that can change
Other countries have different number in basket

Question 9

What are ways of inflation?

Answer 9

Demand pull
cost push

Question 10

Describe inflation trends recently

Answer 10

CPI peaked 2023 at 8%. Cost push inflation from supply chain disruptions from Covid

Question 11

Talk about unemployment

Answer 11

4-5% target (close to full employment)
Unemployment rates can be catergorised into groups such as ethnicity or regions

Question 12

What measures unemployment rate

Answer 12

ILO
Usage of claimant count and LFS

Question 13

Describe trend of unemployment in UK

Answer 13

Very low after 2008 recession, 2021 declining rates but increase over COVID again

Question 14

What are the BOP

Answer 14

A record of all the financial transaction that occur between the country and the rest of the world

Question 15

What is the current account?

Answer 15

Record of g/s, income flows and current ransfer

Question 16

What is a current account surplus?

Answer 16

Exports> imports

Question 17

Describe recent trends of BOP on current account

Answer 17

Current acount deficit for many years

Question 18

What is on the revenue and expenditure of Gov budget

Answer 18

Revenue - Sales of assets, taxes, sales of g/s eg train tickets
Expenditure - Spending(provison) transfer payments

Question 19

What is a governmetn budget deficit

Answer 19

Expenditure>revenue

Question 20

What is public sector debt

Answer 20

Amount owed by gov, financing deficits

Question 21

The Uk is runnigna gov budget…

Answer 21

Deficit

Question 22

What is the debt to GDP ratio

Answer 22

Gov debt as a proportion of Countries GDP

Question 23

What are real world cases of UK fights against environmental unsustainability

Answer 23

2021, UK aims to reduce emissions by 78% by 3035 in comparison to 1990 emission

Question 24

What is the Gini Coefficient?

Answer 24

Measure of the degree of inequality in an economy
0 Being equality and 1 totally inequality

Question 26

What is the target gini coefficient

Answer 26

0.3-0.4

Question 27

Conflicts In objectives

Answer 27

EG and inflation EG and environ sustainability EG and inequalities EG and budgt deficit (EG driven by Fiscal) - Low unemployment and inflation

Question 28

What do keynesian economics do?

Answer 28

Emphasise the role of demand in economic activity, and gov intervention should be used to stabilise the economy

Question 29

What is classical Economics

Answer 29

Emphasised the role of market in allocating resources and determining prices limites gov intervention

Question 30

How has main objectives chnaged over time

Answer 30

1940-1970 EG and full employment 1980s more free market, high inflation 1990s controlling inflaiton 2008-2012 EG and employemtn (recession)

Question 31

What are three things that can measure economic growth

Answer 31

Nominal GDP Real GDP Real GDP per capita

Question 32

WHat is real GDP per capita

Answer 32

Real GDP divided by the total pop of a country. Gives average pound per person

Question 33

How to calculate CPI

Answer 33

CPI = Cost of basket in year X/ Cost of basket in base year * 100

Question 34

Talk about RPI

Answer 34

Calculated Same as CPI Certain g/s excluded from CPI now included (housing costs) RPI usually higher than GDP as morgage interest more senstive to pirce changes

Question 35

How to calcualte employment rate

Answer 35

NO of empoyed / total working age pop

Question 36

Why can employment and unemployment rate increase at the same time

Answer 36

Migration, increase in pop

Question 37

What includes net income payments

Answer 37

current account

Question 39

WHat are net income payments?

Answer 39

Difference between income flowing in and out of economy

Question 40

What are invisible goods?

Answer 40

services

Question 41

What are current transfers?

Answer 41

Where no g/s is exchanged eg donations, benefits

Question 42

How is current account expressed as?

Answer 42

A % of GDP

Question 43

What are reminttances?

Answer 43

Money sent home to family form someone working abroad

Question 44

What are reminttances?

Answer 44

Money sent home to family form someone working abroad

Question 45

What are debits?

Answer 45

Sent by foreignsersworking in UK back to family in other countreus

Question 46

Why do we need to know abotu reminttances and debits?

Answer 46

Accounted for in current account

Question 47

What is a trade deficit

Answer 47

Imports>exports

Question 48

What are indec numbers used for?

Answer 48

Tracks chnages in price, quantities and economic activity

Question 49

How to create an index?

Answer 49

1. Select base year 2. Grather data with base year 3. Assign weitghs prehaps to put gather into perspective (multiply by weight) 4. Interpret

Question 50

What wieght are added to g/s when CPI is calculated?

Answer 50

An itme based on its % of household spending

Question 51

How many no of g/s in singapores basket?

Answer 51

4800

Question 52

WHat is national income

Answer 52

The total value of the new output of an economy over a period of time

Question 53

What measures national income?

Answer 53

Nominal and real GDP

Question 54

What is GDI

Answer 54

Represents the total income earned by a country'sr residants, domestically

Question 55

How to relate GNI to GDI

Answer 55

GNI = GDI + (net income frm abroad)

Question 56

WHat is GNI

Answer 56

Total income earned domestically and abroad

Question 57

What are the uses of Nration income data?

Answer 57

1. Compares changes in living standard 2. Evaluates effictivenes sof policies 3. International comparisons

Question 58

What are limitations of GDP

Answer 58

1. Lack of info on inequality 2. Quality os g/s 3. Does not include unpaid and voluntary work 4. Does not show differences in hours worked 5. Environ damages

Question 59

What does PPP do

Answer 59

Compares the relative value of currencies by measuring the purchasing power of different countries currencies to buy the same basket of gands

Question 60

What can PPP be applied to?

Answer 60

GDP, GNI, GNP and real GDP per capita

Question 61

What is GNP

Answer 61

Total value of all good and services produced by country's residents domestically and abroad

Question 62

What is the informal definition of PPP

Answer 62

Shows number of units a country's current that are required to buy a product in the local econoym

Question 63

What is an example of why we need PPP

Answer 63

Using GDP epr capita is not accurant as currency value are different

Question 64

Difference between rpi and cpih

Answer 64

Cpih uses council tax and rental equivalence instead of morgage payments

Question 65

Difference between cpi and cpih

Answer 65

Cpih includes a form of housing costs

Question 66

Definition of cpih

Answer 66

Consumer Price index including owner occupiers' housing costs