On what is the CPI based?
A representative group of goods and services (market basket) purchased by a typical household.
Price Level
Weighted average of the prices of all goods and services
PPI
Measures the cost of production of goods.
Prices measured at the point at which the goods enter the supply chain for the first time.
Includes capital and intermediate expenses
Base period
A year relatively to which the CPI/PPI is measured and calculated. The base period is always 100.
Inflation
Continued increase in the general price level.
Inflation rate
Growth rate of a price index.
Real income
The purchasing power of the income.
What one can afford to buy with the money.
Working age population
People 16 - 64 years of age.
Broad labor force
Those of the working-age labour force who are willing and able to work. (INCLUDES discouraged work-seekers)
Narrow labour force
Those of the working age labour force who are willing and able to work, excluding discouraged work-seekers.
Discouraged work-seekers
- those in the Broad labour force
- are unemployed in the reference period
- available to work but did not take active steps to find a work during the last 4 weeks before the interview.
Valid reasons for a why discouraged work-seeker is not actively searching:
- No jobs available in the area
- ## Unable to find a job that requires his skills
Broad Economically inactive population
Those too young/too old to work.
Those who form part of the working age but are not willing nor able to work.
Narrow definition of economically inactive population.
- Those too young/too old to work
- Those not willing or not able to work
- Discouraged workseekers
Employed
Those in the broad labour force who performed work for pay, profit or family, for at least one hour prior to the reference week or who were temporarily absent from work.
Five types of unemployment:
- Frictional unemployment
- Structural unemployment
- Natural unemployment
- Cyclical unemployment
- Seasonal unemployment
4 Categories of reasons for unemployment
- Job loser
- Job leaver
- Re-entrant
- New entrant
Full Employment
Where the unemployment rate equals natural unemployment
Gross Domestic Product
The final value of all goods and services produced for a country within a given period of time.
Gross Domestic Expenditure
Total value of spending on goods and services within the country.
Gross National Product
Total income earned by a nation’s permanent residents.
Net National Product
Total income from a nation’s residents minus losses from depreciation
(Net) National Income
Total income earned by a nation’s residents in the production of goods and services.
Personal Income
Income actually received by households
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Chapter 1: Introducing Economics27
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Chapter 640
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Chapter 8: Aggregate Demand & Supply61
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Chapter 9: The Self-regulating Economy15
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Chapter 7: GDP and Real GDP51
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Chapter 3: Demand and Supply38
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Chapter 1046
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Chapter 12: Money, Banking and the Financial System33
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Chapter 13: The South African Reserve Bank12
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Chapter 14: Money & The Economy17
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Chapter 15: Monetary Policy27
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Chapter 16: Expectations Theory and the Economy12
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Chapter 17: Economic growth: Resources, technology, ideas and institutions10
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Chapter 21: International trade13
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Chapter 22: International Finance25
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Chapter 23: Globalization24
