topic 1 the measurement of macroeconomic performance

Nominal GDP

GDP expressed in current prices without considering inflation

Real GDP

GDP adjusted for inflation and expressed in constant prices

Short run economic growth

Actual annual percentage change in real GDP

Long run economic growth

Increase in the potential productive capacity of the economy

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

Offical measure used to calculate the rate of consumer pricne inflation using a basket of common goods

credit crunch

occurs when there is low availability of credit in the economy

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

exports

domestically produced goods and services sold to residents of this country

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 comparision over time to be made. The base year value is typically 100

inflation rate target

The CPI inflation rate tarfet set by the goverment which the bank of England attempts to achieve (currently 2%)

Labour force survey

a Quarterly survey of UK households recording information on the personal employment circumstances of the respondents

Liquidity

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

macroeconomics

involves the study of the whole economy at the aggregate level

marginal propensity to consume

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

national wealth

the stock of all goods with value in the economy

performance indicator

provides information used to judge success or failure of a goverment policy

policy instrument

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

policy objective

a target or goal policy makers aim to hit

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

retail prices index

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