Economic Growth
Refers to the increase in the production of goods and services in an economy over time, often measured by the percentage increase in real GDP or real GDP per capita.
Gross Domestic Product (GDP)
Total monetary value of all goods and services produced within a country in a specific period, measured through production, income, and expenditure approaches.
GDP per Capita
GDP divided by the total population, indicating the average economic output per person and reflecting individual standard of living more accurately.
Unemployment
Situation where individuals capable and willing to work are actively seeking employment but unable to find a job.
Employment
This refers to the state in which individuals who are capable and willing to work are engaged in a job, either part-time or full-time, that provides them with an income.
Claimant Count
Method measuring unemployment based on the number of people claiming unemployment benefits, like Jobseeker's Allowance, but may not include all unemployed individuals.
Cyclical Unemployment
This type of unemployment is related to the economic cycle. It increases during recessions and decreases during periods of economic expansion.
Frictional Unemployment
This occurs when individuals are temporarily unemployed while transitioning from one job to another. It includes new entrants into the labor force and people who have voluntarily left their jobs.
Seasonal Unemployment
This type of unemployment happens when individuals are out of work during off-peak seasons, typically seen in industries like agriculture, tourism, and retail.
Structural Unemployment
This occurs when there is a mismatch between the skills of the workforce and the skills needed for available jobs, often due to technological changes or shifts in the economy.
Distribution of Income
This refers to how a nation’s total earnings are divided among its population. It includes how fairly or unevenly income is distributed across different individuals or groups in an economy.
Wages and Salaries
Earnings from employment.
Rent
Income from property or land ownership.
Interest
Earnings from investments and savings.
Dividends
Share of profits received by shareholders of a company.
Transfer Payments
Government payments such as pensions, unemployment benefits, and welfare.
Income
Flow of money received over a period of time, typically as payment for work, investments, or benefits.
Wealth
Stock of assets owned at a particular point in time, including property, stocks, bonds, and other forms of investments.
Price stability
refers to the condition in which prices in the economy do not change much over time.
Inflation
Rate at which the general level of prices for goods and services rises, measured as an annual percentage increase, crucial for economic stability.
Nominal Values
These are measured in current money terms, without adjusting for inflation.
Real Values
These are adjusted for inflation, reflecting the true purchasing power.
Consumer Price Index (CPI)
Indicator used to measure inflation, representing the average change over time in prices paid by urban consumers for a market basket of goods and services.
Fiscal Policy
Use of government spending and taxation to influence the economy, aiming to achieve economic objectives like growth, employment, price stability, and equitable income distribution.
Progressive Taxes
A tax system where the tax rate increases as income increases. It aims to reduce income inequality by taxing higher earners at a higher rate and using the revenue to fund social programs.
Monetary Policy
Actions by a central bank to manage money supply and interest rates to achieve economic objectives such as price stability and full employment.
Expansionary Policy
Lowering interest rates and increasing the money supply can stimulate economic activity by making borrowing cheaper and encouraging investment and consumption.
Contractionary Policy
Raising interest rates and reducing the money supply can slow down economic activity to prevent overheating and control inflation.
Supply Side Policies
Government measures to enhance the productivity and efficiency of the economy.
Market-Based Policies
Supply side policies aiming to promote free market operations and improve economic efficiency.
Interventionist Policies
Supply side policies involving government intervention to correct market failures and boost productivity.
Externalities
are costs or benefits incurred or received by third parties who are not involved in the economic transaction.