Unit 2.1.2

Leading indicator

a variable that changes before the overall economy changes, used to predict future economic trends

Lagging indicator

a variable that changes after the economy has already begun to follow a trend, used to confirm what has already happened

Ways of measuring economic growth

-consumption

-investment

-government spending

-exports-imports

Real GDP

Value of goods and services produced in the economy over a period of time adjusted for inflation

Nominal GDP

the value of goods and services which has not been adjusted for inflation

Total GDP

the value of all goods and services produced in a country

GDP per capita

the total GDP divided by the number of people in the country

Consumer Price Index

A way of measuring inflation by having a representative basket of goods and services used and with weights depending on their importance and they collect price quotations of around 720 products and weights are multiplied by price changes which is then totalled to find the inflation rate

Claimant Count

A measure of unemployment according to those who are claiming unemployment related benefits

Labour force survey

A survey of about 40,000 households studying the employment circumstances

Productivity

how much output can be produced with a given set of inputs (efficiency)

Capital productivity

Output per unit of capital refers to how efficiently capital is used in the production process

Labour Productivity

measures the hourly output of a country’s economy/GDP produced for each hour of labour worked

Measured using : Total GDP ÷ total number of labour hours

Purchasing power parity

exchange rates that quailise the purchasing power of different currencies

human capital

quality of labour

gross national income

todo income owned by residents of a county

national capital stock

total value of all man made assets used in production of goods and services