Chapter 31: Economic Indicators

Economic Indicators

are statistics that show how the economy is doing and suggest how well it is likely to do in the future

Inflation

increase in the price of goods and services from one period to another

Rate of Inflation

the percentage change in the price of goods and services in a period of time

Deflation

If inflation falls below 0%

The employment rate

refers to the percentage of the total labour force is employed

What happens when interest rates are low?

Inflation increase

This is because more people can afford to borrow money, which means the demand for goods and services rises

What happens when interest rates are high?

Inflation decreases

This is because fewer people can afford to borrow money, which means demand for goods and services falls

National Income

the total net earnings from a country’s production of goods and services in a year

GDP

Gross Domestic Product

The total market value of the goods and services produced within a country in one year

GNP

Gross National Product

Is GDP plus income earned by Irish individuals and organisations abroad

Economic Growth

the growth in a country’s output of goods and services over time

National Debt

the total amount of money borrowed by a country’s government

Causes of Inflation

1. Demand is greater than supply

2. The cost of raw materials increase

3. Labor costs increase

Impact of Increased National Income

1. Individuals will have more income and higher standard of living

2. Business produce more goods and services so their profits increase

3. The government has more revenue

Impact of Decreased National Income

1. Individuals have less income and the standard of living decreases

2. Business produce less goods and services as their profits decrease

3. Government has less income

Impact of Economic Growth

Individuals have more disposable income and high standard of living

Output increases and more jobs are created

Emigration is reduced