Macroeconomics

Consumer Price Index

The average of the prices of the goods and services that the typical consumer buys expressed as an index number. It’s used as a measure of the cost of living in a country and to calculate inflation.

Consumption

Spending by households on durable and non-durable goods and on services over a period of time.

Economic Growth

Refers to increases in real GDP over time.

Employment Insurance /Unemployment Benefits

Payments, usually made by the government, to people who are unemployed

Exports

Goods and services produced in one country and purchased by consumers in another country.

GDP Expenditure Approach

One of three approaches of measuring GDP that adds all the expenditures made on final domestic goods and services over a period of time by households, firms, the government and foreigners.

Gini Coefficient

A measure of the degree of income inequality of a country that ranges from zero (perfect income equality) to one (perfect inequality). Diagrammatically it is the ratio of the area between the Lorenz curve and the diagonal over the area of the half-square.

Government Debt

The sum of all past budget deficits minus any budget surpluses; the total amount the government owes to domestic and foreign creditors.

Government Deficit

When government expenditures exceed government (tax) revenues usually over a period of a year.

Government spending

All spending by the government, including current expenditures, capital expenditures, and transfer payments.

Gross Domestic Product (GDP)

The value of all final goods and services produced within an economy over a period of time, usually a year or a quarter.

Gross National Income (GNI)

The income earned by all national factors of production independently of where they are located over a period of time; it is equal to GDP plus income earned abroad minus income paid abroad.

Happiness Index

An index used to measure the economic well-being of a population using several quality of life dimensions.

Happy Planet Index

An index that combines four elements to show how efficiently residents of different countries are using environmental resources to lead long, happy lives. The elements are well-being, life expectancy, inequality of outcomes and ecological footprint.

Imports

The value of goods and services purchased domestically that are produced abroad.

Inflation rate

The percentage change between two periods of the average price level, usually measured through the CPI.

Interest rates

The cost of borrowing money or the reward for saving money over a period of time expressed as a percentage.

Investment

Spending by firms on capital goods such as machines, tools, equipment and factories.

Minimum Wage

A type of price floor where the wage rate or the price of labour is set above the market equilibrium wage rate.

Natural Rate of Unemployment

The rate of unemployment that occurs when the economy is producing at its potential output or full employment level of output. It is the sum of structural, frictional and seasonal unemployment.

Poverty line

A level of income determined by a government or international body that is just enough to ensure a family can satisfy minimum needs in terms of food, clothing and housing.

Relative poverty

the inability of an individual or family to afford an adequate standard of goods or services, taken to be a percentage of society’s median income.

Seasonal unemployment

Unemployment that arises when people are out of work because their usual job is out of season, for example, agricultural workers during winter months.

Structural unemployment

A type of long-term unemployment that arises from technological change, changes in the patterns of demand for different labour skills, changes in the geographical location of industries, and labour market rigidities.

Unemployed

someone of working age who is actively looking for work, but is without a job.

Unemployment rate

The number of unemployed workers expressed as a percentage of the total workforce.