1 - The Measurement of Macroeconomic Performance.docx

Macroeconomic Objective

The goal that the government aims to achieve through its economic policies.

Economic Growth

The increase in the value of output produced in the economy over a period of time.

Price Stability (Inflation)

The rate at which the average level of prices of goods and services increases over a year.

Minimising Unemployment

Reducing the number of individuals of working age who are seeking employment but are unable to find a job.

Stable Balance of Payments on Current Account

Ensuring that the inflow and outflow of currency in a country are balanced over a specific period.

Balanced Budget

When government spending equals government revenue.

Achieving Equitable Distribution of Income

Ensuring that the gap between the richest and poorest individuals does not become excessively wide.

Policy Conflict

When two policy objectives cannot be achieved simultaneously.

Macroeconomic Indicators

Data used to measure the performance of an economy, including real GDP, inflation rates, unemployment rates, and balance of payments.

Real GDP

The measure of all goods and services produced in an economy in a year, adjusted for inflation.