The measurement of macroeconomic performance

Main objectives of government economic policy

1) Low and stable inflation
2) Low unemployment
3) Sustained economic growth
4) A favourable current account position on the balance of payments

Other macro objectives

Fairer disribution of income, environmental protection, balancing the budget

Indicator for Inflation

Consumer Price Index or Retail Price Index.
They are measures of the percentage changes in average price of a large basket og goods, over a period of time.

Indicator for Unemployment

Claimant Count and Labour Force Survey.
Both measure the number of people without a job, expressed in millions or as a % of the workforce.

Indicator for Economic Growth

Real GDP or real GDP per capita

Indicator of Balance of Payments

the size of the current account, expressed either in monetary terms or as a % of GDP

Nominal VS Real
GDP

Nominal GDP means the value of goods and services produced in today’s prices.
Real GDP means the value of goods and services produced, accounting for inflation.