506440
Description
Mind Map by 07nelvjose, updated more than 1 year ago
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Created by 07nelvjose
almost 11 years ago
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Macroeconomics Performance
- Trade-off
- Opportunity cost such as at OB
- Imports increase and exports decrease
- Due to less price competitive
- Due to inflationary pressure and increased wages
- As imports appear cheaper
due to increased income
- As imports appear cheaper
due to increased income
- Due to less price competitive
- Imports increase and exports decrease
- Opportunity cost such as at OB
- Inflation
- Persistent increase in the level of prices occurs over time
- Caused by increased costs .e.g wages, scarce resources
- Too high inflation
- Unemployment increases
- AD will fall
- Actual growth falls below trend
- Actual growth falls below trend
- If prices increase quicker elsewhere
- Reduced demand for exports
- Reduced demand for exports
- Unemployment increases
- Target for inflation set by
government
- Bank of England ensure to meet target
- Control AD depending on inflation
- Control AD depending on inflation
- Bank of England ensure to meet target
- Measured using Index numbers
- Designed to measure the
magnitude of economic
changes over time
- A base year is chosen
and the index number 100
is given to price of chosen
goods and services
- Designed to measure the
magnitude of economic
changes over time
- Retail Price Index
- Main domestic measure of inflation in the UK and
calculated by Office of National Statistics
- Measures average change from month
to month in the price of goods and
services consumed by households
- Kept up-to-date with entry of
new goods and services by
replacing old products to reflect
change in consumption pattern
- Kept up-to-date with entry of
new goods and services by
replacing old products to reflect
change in consumption pattern
- Main domestic measure of inflation in the UK and
calculated by Office of National Statistics
- Consumer Price Index
- Used in euro area and can be
used to compare with
European countries
- Does not include changes in house prices
and related areas
- Used in euro area and can be
used to compare with
European countries
- Persistent increase in the level of prices occurs over time
- International Competitiveness
- National assets determines the trade
- Increased sales aboard
- Boost AD
- Improves output gap
- Can lead to increased imports
- Reduced spending in economy to control imports
- Might cause rising unemployment&slow
growth
- Might cause rising unemployment&slow
growth
- Reduced spending in economy to control imports
- Improves output gap
- Boost AD
- Increased sales aboard
- UK national assets
- Financial services
- High valued manufactured goods
- Financial services
- National assets determines the trade
- Economic Indicators
- Gross Domestic Product
- Diagram
- Negative output gap at OA
- High unemployment & slow growth
- Opportunity cost of waste of scarce resources
- Living standards fall
- Growing benefit expenditure
- Opportunity cost of waste of scarce resources
- High unemployment & slow growth
- Positive output gap at OB
- Rising inflation and lower unemployment
- Rising inflation and lower unemployment
- Negative output gap at OA
- Used to measure the value of all goods
and services produced in the economy
- Measured as %
- UK expected increase is 2.5-2.75%
- UK expected increase is 2.5-2.75%
- Manufacturing, agriculture and services
industries
- Measured as %
- Nominal GDP-output figures
not adjusted for inflation
- Real GDP-adjusted for
inflation
- Diagram
- Economic statistics that provide
information about the expansions and
contractions of business cycles
- Gross National Product
- Includes incomes received from
aboard minus the amount paid out
of the economy to overseas
- Includes incomes received from
aboard minus the amount paid out
of the economy to overseas
- GDP per capita
- GDP divided by population
- Better indicator for measuring living
standards as it shows how much income
earned by average person have risen over
time
- GDP divided by population
- Gross Domestic Product
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