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2. Policy Objectives
Macro
| Term | Definition |
|---|---|
| Actual Rate of Growth | economic growth measured by changes in real GDP |
| Economic Cycle | the tendency of economic growth to rise and fall above and below the trend rate of economic growth, causing booms and busts |
| Economic Growth | an expansion of the productive potential of the economy |
| GDP Per Capita | total GDP divided by the population of the country |
| Gross Domestic Product | the value of goods and services produced in a country over a given time period |
| Long Run Growth | an increase in the productive capacity of the economy |
| Nominal GDP | the value of GDP without being adjusted for inflation |
| Real GDP | the value of GDP adjusted for inflation |
| Short Run Growth | calculated annually by the percentage change in real GDP |
| Trend Rates of Growth | the average sustainable rate of economic growth over a given period of time |
| Aid | when a country voluntarily transfers resources to another or gives loans on a concessionary basis |
| Economic Development | an increase in living standards, freedom and life expectancy |
| Genuine Progress Indicator | a measure of development calculated from 26 different indicators looking at economic, environmental and social factors |
| Human Development Index | measures an economy's development based on income, health and education |
| Measuring National Wellbeing Programme | a report which measures how lives are improving; asks 4 key questions about life satisfaction, anxiety, happiness and worthwhileness |
| Primary Sector | the part of the economy focused on raw materials, such as farming or mining |
| Remittance | a sum of money sent back to the domestic economy of a migrant |
| Secondary Sector | manufacturing industry; the sector which transforms raw materials into goods for consumers |
| Structure of an Economy | how the economy is made up in terms of what proportion of output comes from the different economic sectors |
| Sustainable Development | development that occurs to meet the needs of the people of today without preventing future generations from meeting their needs; development that occurs without depletion of natural resources |
| Tertiary Sector | the part of the economy concerned with the supply of services |
| Claimant Count | a measure of unemployment; the number of people receiving benefits for being unemployed |
| Employment | those with a job |
| Labour Force Survey | a measure of unemployment which surveys people to class them as unemployed, employed or inactive under the International Labour Organisation (ILO) |
| Unemployment | those able and willing to work, but are not employed |
| Consumer Price Index | official measure used to calculate the rate of inflation, uses a weighted basket of goods |
| Deflation | the opposite of inflation, where the average price level in the economy falls |
| Disinflation | a falling rate of inflation; prices are still rising but not by as much |
| Hyperinflation | when the rate of inflation is high and accelerating to the extent that it is out of control |
| Inflation | the general rise in prices of goods and services that erodes the purchasing power of money |
| Retail Price Index | an old measure of inflation which has lost its national statistic status |
| Balance of Payments | a record of all financial dealings over a period of time between economic agents of one country and another |
| Capital Account | a part of the balance of payments; involves transfers of the ownership of fixed assets |
| Current Account | a record of the payments for the purchase and sale of goods and services, as well as income and transfers |
| Financial Account | a part of the balance of payments; records FDI, portfolio investment and the transfer of gold and currency reserves |
| Income and Current Transfers | net earnings on foreign investment, net cash transfers that have no return, such as aids and grants |
| Marginal Propensity to Import | the proportion of an increase in income spent on imports |
| Absolute Poverty | when people are unable to afford sufficient necessities to maintain life; those on less than $1.90 a day |
| Gini Coefficient | a measure of income inequality; the ratio of the area between the 45 degree line (line of perfect equality) and the Lorenz curve, and the whole area under the 45 degree line |
| Income Distribution | how the flow of assets is spread throughout the economy |
| Income Inequality | when income is unevenly distributed across a nation |
| Lorenz Curve | the cumulative percentage of population plotted against the cumulative percentage of income that those people have |
| Relative Poverty | when income falls below an average income threshold. In the UK, this is those on less than 60% of median household income |
| Wealth Distribution | how the stock of assets is spread across the economy |
| Wealth Inequality | when wealth is unevenly distributed across the economy |
| Natural Rate of Unemployment | the unemployment rate when the labour market is at equilibrium, when there is no demand-deficient unemployment and unemployment is only caused by supply side factors |
| Phillips Curve | shows the trade-off between the level of unemployment and the inflation rates |
Created by:
19thomps