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  • As Economics Unit 2 Macroeconomic Performance Lesson 1

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    Economic growth is the capacity of the economy to produce more goods and services over time. GDP is the most common measure of economic growth; total value of goods and services produced in the economy. Measured as a percentage. Output Gaps are negative output Gaps where the economy is producing less than it's trend output. Positive output Gaps are when actual GDP exceeds trend GDP increasing inflationary pressure. Unemployment begins to rise Unemployment begins to fall AD begins to fall consumer confidence is high and firms benefit from high profits from high demand. Firms are suffering from

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    Economic growth is the capacity of the economy to produce more goods and services over time. GDP is the most common measure of economic growth; total value of goods and services produced in the economy. Measured as a percentage. Output Gaps are negative output Gaps where the economy is producing less than it's trend output. Positive output Gaps are when actual GDP exceeds trend GDP increasing inflationary pressure. Unemployment begins to rise Unemployment begins to fall AD begins to fall consumer confidence is high and firms benefit from high profits from high demand. Firms are suffering from

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    266 просмотров16 страниц

    As Economics Unit 2 Macroeconomic Performance Lesson 1

    Загружено:

    api-53255207
    Economic growth is the capacity of the economy to produce more goods and services over time. GDP is the most common measure of economic growth; total value of goods and services produced in the economy. Measured as a percentage. Output Gaps are negative output Gaps where the economy is producing less than it's trend output. Positive output Gaps are when actual GDP exceeds trend GDP increasing inflationary pressure. Unemployment begins to rise Unemployment begins to fall AD begins to fall consumer confidence is high and firms benefit from high profits from high demand. Firms are suffering from

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    Attribution Non-Commercial (BY-NC)
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    Macroeconomic Performance

    AS Economics Unit 2

    Aims and Objectives


    Aim: To understand measures of Macroeconomic Performance Objectives: Define aggregate demand and aggregate supply Explain economic cycle Compare international economic cycles Analyse the features of economic cycle Evaluate employment policy

    Macroeconomics
    Macroeconomics is the study of the economy as a whole. Aggregate Demand:
    The total demand in the economy made up of consumption, investment, government spending, exports and imports. C + I + G + (X-M)

    Aggregate Supply:
    The total value of goods and services supplied in the economy.

    MEASURES OF MACROECONOMIC PERFORMANCE

    Economic Growth
    Economic Growth: the capacity of the economy to produce more goods and services over time. GDP: most common measure of economic growth; total value of goods and services produced in the economy. Measured as a percentage. Displayed on Business Cycle/Economic Cycle

    UK GDP

    Economic Boom

    Downturn

    Recovery

    Recession

    Task: Two significant points of comparison.

    UK GDP Growth Comparison

    Task: Two significant points of comparison.

    UK GDP Growth Comparison

    Task: Two significant points of comparison.

    Output Gaps
    Negative Output Gap: where the economy is producing less than its trend output.

    Positive Output Gap: when actual GDP exceeds trend GDP increasing inflationary pressure.

    GDP

    Trend Growth

    Actual Growth

    Time

    Output Gaps and Economic Cycle


    Draw out the economic cycle on your whiteboards. Write out the following statements and suggest with each letter where each statement occurs on the economic cycle. E.g.
    GDP B Trend Growth

    Actual Growth A

    Time

    Unemployment begins to rise

    Unemployment begins to fall

    AD begins to rise

    AD begins to fall Consumer confidence is high and firms benefit from high profits from high demand. Firms are suffering from a contraction in AD and making redundancies.

    Government intervenes to stimulate AD.

    Household incomes are increasing.

    I J K L M

    Aggregate demand is exceeding aggregate supply, resulting in higher prices and inflationary pressure.

    Consumer confidence is low, and instead of spending, consumers are saving, resulting in a contraction of AD.

    Workers demand higher wage levels to keep up with inflation.

    Interest rates are low in an attempt to boost consumer spending

    The number of people claiming welfare benefits rises.

    Employment and Unemployment


    Both vary over the course of the business cycle. Unemployment tends to occur when there is a negative output gap. Unemployment causes negative externalities. As economy grows, employment is created. However increases in technology may result in unemployment.

    Unemployment
    http://www.bbc.co.uk/news/business-16608394

    Task: Two significant points of comparison.

    Plenary
    The Office for National Statistics (ONS) said the unemployment rate also rose to 8.4% from 8.3%, the highest since January 1996. What would you do as a policy maker to address this problem?

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