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macro indicators Flashcards

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1
Q

what are macro indicators

A

statistics used to assess the health and performance of an economy

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2
Q

list 6 macro indicators

A
  • GDP growth
  • inflation
  • unemployment
  • balance of payments
  • interest rates
  • exchange rates
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3
Q

GDP

A

key measure of national insurance, total market value of all goods and services produced over a period of time, including indirect tax

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4
Q

inflation

A

The sustained increase in the general price level of goods and services in an economy.

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5
Q

unemplyment

A

The percentage of the labor force that is unemployed but actively seeking employment

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6
Q

interest rates

A

refer to the cost of borrowing money and the return on savings

They are set by central banks (e.g., the Bank of England in the UK) and influence economic activity

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7
Q

balance of payments

A

a record of all financial dealings over a period of time between one country and all other countries

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8
Q

exchange rates

A

a relative price of one currency expressed in terms of another currency (or group of currencies)

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9
Q

what does a cut in income tax do

A

stimulus to increase consumption

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10
Q

what is mini budget

A

is a small-scale financial statement or fiscal update issued by a gov, typically outside of the regular annual budget cycle.

It is usually introduced to address urgent economic issues, make policy adjustments, or respond to unexpected financial circumstances

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11
Q

features of mini budget

A
  • targeted changes
  • short term focus
  • government response
  • without parliamentary approval
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12
Q

3 targeted changes in mini budget

A

Focus on specific areas like
- taxation
- public spending
- economic stimulus

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13
Q

Short-Term Focus of mini budget means

A

Unlike a full budget, it does not cover an entire fiscal year (fiscal year is between UK1st April - 31st March)

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14
Q

Government Responses in mini budget are usually ex..

A

Often introduced in response to economic crises, inflation, recession, or political needs.

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15
Q

limitation of parliamentary approval of mini budget

how does this effect the implementation

A

Depending on the country, some mini-budgets can be implemented quickly without extensive legislative processes.

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16
Q

GVA

A

gross valued added at basic prices minus indirect taxes and subsidies on goods

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17
Q

What is ‘the basic’
-when calculating (GDP) at factor cost from GDP at market prices

A

indirect taxes minus subsidies

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18
Q

GDP at market price

A

is main headline figure for national insurance because the data is quickly available

rate of growth of the GDP is the main indicator of the growth of the economy

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19
Q

GNP

A

gross national product is the market value of all products produced yearly by the labour and the assets that generates income supplied by the citizens of one country (whether inside or outside its borders)

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20
Q

What are transfer payments?

A

Transfer payments are payments made by the government to individuals without any exchange of goods or services.

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21
Q

True or False: Transfer payments are a form of government spending.

A

True

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22
Q

Fill in the blank: Transfer payments include social security, unemployment benefits, and _______.

A

welfare payments

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23
Q

What is the primary purpose of transfer payments?

A

The primary purpose of transfer payments is to provide financial assistance to individuals in need.

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24
Q

Multiple Choice: Which of the following is NOT a type of transfer payment? A) Social Security B) Unemployment Benefits C) Public Education Funding

A

C) Public Education Funding

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25
How do transfer payments impact the economy?
Transfer payments can stimulate economic activity by increasing consumer spending among recipients.
26
True or False: Transfer payments are typically funded through taxation.
True
27
Short Answer: Name one example of a transfer payment program.
Medicaid
28
What is the difference between transfer payments and government purchases?
Transfer payments do not involve the purchase of goods or services, while government purchases do.
29
Multiple Choice: Which demographic is most likely to benefit from transfer payments? A) High-income individuals B) Low-income individuals C) Corporations
B) Low-income individuals
30
True or False: Social Security benefits are considered transfer payments.
True
31
Fill in the blank: _________ payments are made to individuals who are unemployed and seeking work.
Unemployment
32
Which of the following is NOT an example of a transfer payment? A) Welfare B) Subsidies C) Public Education
C) Public Education
33
List one example of a transfer payment aimed at supporting low-income families.
Supplemental Nutrition Assistance Program (SNAP)
34
What is national income a measure of?
National income is a measure of the total economic output of a country.
35
what is National income is used to do
is used to compare the economic performance of different countries
36
Which of the following is NOT a reason for measuring national income? A) Economic planning B) Assessing living standards C) Determining tax rates D) Predicting weather patterns
D) Predicting weather patterns
37
Why is it important to measure national income over time?
Measuring national income over time helps in analyzing economic growth and cycles.
38
What is the definition of purchasing power parity (PPP)?
Measures the relative purchasing power of currencies in different countries by comparing the cost of a standard 'basket of goods' and services in each country
39
True or False: Purchasing power parity suggests that in the long run, exchange rates should equalize the price of identical goods in different countries.
True
40
Fill in the blank: The concept of purchasing power parity is often used to compare the ________ between countries.
standard of living
41
Which of the following is a key assumption of purchasing power parity? A) Markets are perfectly competitive B) There are no transportation costs C) Goods are identical across countries D) All of the above
D) All of the above
42
How does purchasing power parity help in economic analysis?
Purchasing power parity helps in economic analysis by providing a method to compare economic productivity and standards of living between countries.
43
why can national insurance be inaccurate
due to secret/hidden economy such as tax evasion the stats are inaccurate
44
big mac index
the market is not equal and needs comparative figures so take a big mac which is sold globally, then calculate it's average value
45
3 ways to calculate national income
- national output (0) - national expenditure (E) - national income (Y) O=E=Y
46
what effects can a negative supply side shock lead to on the economy
higher inflation and lower output
47
supply side shock
a sudden, unexpected event that disrupts the production or availability of goods and services, impacting the economy's supply side oil price spikes
48
why are supply side shocks a macro indicator
it directly impacts the aggregate supply curve
49
what is Consumer Price Index
Measures the change in the price of a 'basket of goods and services' commonly purchased by households over time Used to track inflation and understand how much consumers pay for goods and services within a specific country.
50
Negatives of a positive output gap
- demand pull inflation - unsustainable growth, overuse of resources/ human capital - rise in interest rates - worsening current account (demand for imports increases) - resource depletion (overuse of inputs)
51
What are market-based supply-side policies?
Policies that aim to boost economic efficiency and productive potential by reducing government intervention and allowing markets to work more freely
52
Give two examples of market-based supply-side policies
Tax cuts and deregulation
53
How does privatisation improve supply-side performance?
It increases efficiency by introducing competition and profit incentives.
54
Name a disadvantage of market-based supply-side policies
They may increase inequality or cause underprovision of public goods
55
What are interventionist policies?
Government actions that directly intervene in the economy to improve outcomes, correct market failure, or promote growth
56
Give examples of interventionist supply-side policies
- Spending on education and trainung - infrastructure - Subsidies for key industries - industrial policy
57
How do subsidies support supply-side improvements?
They reduce firms' costs and encourage investment in R&D or training
58
Why is investment in healthcare a supply-side policy?
It improves workforce health and productivity, increasing long-run aggregate supply
59
What is a potential disadvantage of interventionist policies?
High opportunity cost and risk of government failure or inefficiency
60
Give two examples of market-based supply-side policies
Tax cuts and deregulation
61
What are market-based supply-side policies?
Policies that aim to boost economic efficiency and productive potential by reducing government intervention and allowing markets to work more freely
62
Which supply-side policies are more likely to cause inequality?
Market-based policies, due to reduced worker protections and welfare.
63
What is the aim of labour market reform?
To increase flexibility, reduce unemployment, and make labour markets more efficient
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