Measures of economic performance

Economic growth

An increase in the production of goods and services in an economy over a specific period, typically measured by GDP.

PPP

an additional exchange rate adjustment that equalises the price of internationally traded goods across countries.

National income

the total value of all goods and services produced in an economy in a given period of time

Unemployment

The number of people who are actively seeking work but are unable to find employment.

costs of unemployment - individuals

Falling income, poverty, depression, health problems, poor standard of living

Hysteresis

A rise in unemployment caused by a recession may cause the natural rate of unemployment to increase. This is because when workers are unemployed for a time period, they become deskilled and demotivated and are less able to get new jobs

costs of unemployment - economy

Crime, tax revenues fall, welfare pay rises, losing workers to foreign countries

claimant count

Measures people who are receiving job seeker allowance

ILO - Labour force survey

Defines unemployment as someone who has been actively looking for a job in the past four weeks and would be ready to start work in the next two weeks

frictional unemployment

the space between jobs

structural unemployment

when the skills someone has does not match the skills firms are looking for

cyclical unemployment/ demand deficient

it is caused by a recession or expansion in the economic cycle

seasonal unemployment

unemployment due to the seasons of the year