Paper 2 Macroeconomics: Topic 1 - The Measurement of Macroeconomic Performance

Availability of Credit

Funds available for firms and households to borrow

Claimant Count

A method of measuring unemployment by counting all of those who claim the Jobseekers Allowance and other unemployment related benefits

Consumer Prices Index (CPI)

Official measure used to calculate the rate of consumer price inflation, using a basket of common goods

Economic Shock

Unexpected events and their effects on economies; may be demand side or supply side

Exchange Rate

The price of a currency measured in terms of another currency

Labour Force Survey

A quarterly survey of UK households, recording information on the personal employment circumstances of the respondents

Macroeconomics

Involves the study of the whole economy at the aggregate level

National Wealth

The stock of all goods with value in the economy

Performance Indicator

Provides information used to judge success or failure of a government policy

Policy Objective

A target or goal that policy-makers aim to hit

Retail Prices Index (RPI)

An older measure used to calculate the rate of consumer price inflation

Wealth

Stock of assets

Credit Crunch

Occurs when there is low availability of credit in the economy

Exports

Domestically produced goods and services sold to residents of other countries

Full employment

All those willing and able to work are able to find jobs

Imports

Non-domestically produced goods and services sold to residents of this country

Index Numbers

Numbers allowing accurate comparisons over time to be made (The base year value is typically 100)

Inflation Rate Target

The CPI Inflation rate target set by the government, which the Bank of England attempts to achieve; currently 2%

Liquidity

The ease with which an asset can be converted into cash without loss or delay

Marginal Propensity to Consume (MPC)

The proportion of an increase in disposable income that is spent on consumer goods

Policy Instrument

Tool or set of tools used to try and meet a policy objective

Price Index

An index number showing the extent to which a set of prices has changed in comparison to the prices in the base year