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What are the macroeconomics objectives?
- Low unemployment
- Price stability
- High sustainable growth
- Balance of Payments in equilibrium
What is national income?
- The monetary value of the output of goods and services produced within the economy over a period of time.
What is GDP?
A measure of a country's economic activity, namely the value of all Gs + Ss produced in a year.
What are the main problems in measuring national income?
- Non-marketed output e.g. DIYUnderclared economic activity e.g. the shadow economy
- Transfer payments e.g. unemployment and child benifits
- Double counting
What is the marginal propensity to consume?
The proportion of each extra pound spent by consumers. If there is a fall in the marginal propensity to save then this means the marginal propensity to consume must have increased.
Define economic growth?
An increase in the prodcutive capacity of the economy to produce Gs + Ss.
Define economic growth rate?
the percentage increase in real GDP over a period of 12 months.
What is recession?
Two consecutive quaters of negative economic growth.
People who are registered as willing and able to work and who is actively seeking work.
What is full employment?
Full employment occurs when unemployment equals the natural rate of employment.
Includes those who are unemployed and eligible to claim the Job Seeker's Allowance.
This tends to understate the 'true' level of unemployment because many people are interested in findinng work but do not meet all the criteria for claiming JSA.
A survey of those who have looked for work in the past month and are able to start employment in the net two weeks.
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