Unemployment Measuring GDP and the Multiplier
Output: measuring
Claimant Count: Thethe value of people
number what weclaiming
produceJSA.
through
However,
primary,include
doesn’t secondary and
those tertiary from
returning activity. Double but
maternity counting can
includes
occur. who claim purely for benefit.
those
Expenditure:
ILO Aggregate
unemployment rate:demand
Based on– the
C+I+G+(X-M)
Labour Force Survey,
Income: Measures
however amountand
is representative of income
doesn’texchanged
consider for FOP.
underemployment.
Real GDP =between
Frictional: (Nominaljobs.
GDP X base year index)/current year index
Structural: changes in the pattern of economic activity.
Cyclical: during a downturn of the economic cycle.
Demand-Deficient: deficiency of AD.
Seasonal: seasons where demand is low.
AD:
The total demand for a countries goods and services at a given
price level at a given period of time.
Income can also
come from
welfare
AS:
The total amount that producers in an economy are willing
and able to supply at a given price level in a given period of
time.
Economic Growth
Aims of Government
Sustained: steady growth which avoids fluctuations in activity
Stable prices:
and the uncertainty
It maintains economicthisgrowth/stability
can generate. and prevents
Sustainable:
devaluation of the currencyisand
growth which maintained yearofafter
a reduction year and
spending.
can be enjoyed
Sustained by future generations.
and sustainable growth: (not depleting non-
renewable
A growth inresources)
GDP will lead to greater living standards as there
are more jobs and greater spending on If increases in AS and AD
public services.
Current Account BoP: are matched the growth is
said to match
A balance between exports and imports (X=M). If either the trend
is
growth this
unbalanced your economy can become reliant on foreign avoids the
economies. consequences of a
Low unemployment: negative (unemployment)
and spending
Tax revenue will go up as well as benefit positive (inflation)
falling.
output gap.
Leads to greater standard of life and more consumption.
Inflation AD and The Price Level
The rate
Lower of change
prices in the goods
make British general pricecompetitive
more level. A sustained
– X up M
general rise in prices.
down (international trade effect)
It causes
Lower reduced
prices international
increase the buyingcompetitiveness,
power of wealthreduced value
held (real
of savings,effect)
balances inequality (poor hold wealth in cash), negative real
interest
A rates and
fall in interest business
rates uncertainty.
is usually followed by a fall in IR which
Disinflation:
leads A fall in
to increased the rate ofand
investment inflation.
consumption (interest rate
Calculated by % change in CPI
effect)
Demand Pull: AD in an economy outpaces AS. (too much money
chasing too few goods growth of money supply)
Cost Push: An increase in costs for supplying firms. (minimum
wage increase, depreciation in ER…)
Output: measuring
Claimant Count: Thethe value of people
number what weclaiming
produceJSA.
through
However,
primary,include
doesn’t secondary and
those tertiary from
returning activity. Double but
maternity counting can
includes
occur. who claim purely for benefit.
those
Expenditure:
ILO Aggregate
unemployment rate:demand
Based on– the
C+I+G+(X-M)
Labour Force Survey,
Income: Measures
however amountand
is representative of income
doesn’texchanged
consider for FOP.
underemployment.
Real GDP =between
Frictional: (Nominaljobs.
GDP X base year index)/current year index
Structural: changes in the pattern of economic activity.
Cyclical: during a downturn of the economic cycle.
Demand-Deficient: deficiency of AD.
Seasonal: seasons where demand is low.
AD:
The total demand for a countries goods and services at a given
price level at a given period of time.
Income can also
come from
welfare
AS:
The total amount that producers in an economy are willing
and able to supply at a given price level in a given period of
time.
Economic Growth
Aims of Government
Sustained: steady growth which avoids fluctuations in activity
Stable prices:
and the uncertainty
It maintains economicthisgrowth/stability
can generate. and prevents
Sustainable:
devaluation of the currencyisand
growth which maintained yearofafter
a reduction year and
spending.
can be enjoyed
Sustained by future generations.
and sustainable growth: (not depleting non-
renewable
A growth inresources)
GDP will lead to greater living standards as there
are more jobs and greater spending on If increases in AS and AD
public services.
Current Account BoP: are matched the growth is
said to match
A balance between exports and imports (X=M). If either the trend
is
growth this
unbalanced your economy can become reliant on foreign avoids the
economies. consequences of a
Low unemployment: negative (unemployment)
and spending
Tax revenue will go up as well as benefit positive (inflation)
falling.
output gap.
Leads to greater standard of life and more consumption.
Inflation AD and The Price Level
The rate
Lower of change
prices in the goods
make British general pricecompetitive
more level. A sustained
– X up M
general rise in prices.
down (international trade effect)
It causes
Lower reduced
prices international
increase the buyingcompetitiveness,
power of wealthreduced value
held (real
of savings,effect)
balances inequality (poor hold wealth in cash), negative real
interest
A rates and
fall in interest business
rates uncertainty.
is usually followed by a fall in IR which
Disinflation:
leads A fall in
to increased the rate ofand
investment inflation.
consumption (interest rate
Calculated by % change in CPI
effect)
Demand Pull: AD in an economy outpaces AS. (too much money
chasing too few goods growth of money supply)
Cost Push: An increase in costs for supplying firms. (minimum
wage increase, depreciation in ER…)
