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EnglandEconomics

Component 2: Macroeconomics - Macroeconomic indicators

5 dot points across 5 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How is economic growth measured through GDP, and what are the limits of GDP as a measure of living standards?

2.1 Measuring growth: real and nominal GDP, GDP per capita, index numbers and the rate of growth, the difference between actual and potential growth, and the limitations of GDP.
An OCR H460 answer to measuring economic growth, covering real and nominal GDP, GDP per capita, index numbers and growth rates, actual versus potential growth, and the limitations of GDP as a measure of living standards and welfare.
11 min answer →

How is unemployment measured, what are its types and causes, and what are its costs?

2.1 Employment and unemployment: the measurement of unemployment (the Labour Force Survey and the claimant count), the types and causes of unemployment, and the economic costs of unemployment.
An OCR H460 answer to employment and unemployment, covering how unemployment is measured through the Labour Force Survey and the claimant count, the types and causes of unemployment (frictional, structural, cyclical, seasonal and real-wage), and the economic costs of unemployment.
10 min answer →

How is the distribution of income measured, and why does inequality matter for an economy?

2.1 Inequality: the difference between income and wealth, the measurement of inequality through the Lorenz curve and Gini coefficient, the causes of inequality, and the equity-efficiency trade-off.
An OCR H460 answer to inequality, covering the difference between income and wealth, the Lorenz curve and Gini coefficient, the causes of income and wealth inequality, and the equity-efficiency trade-off in redistribution.
10 min answer →

How is inflation measured through the CPI, what causes it, and why do its costs matter?

2.1 Inflation: the CPI and RPI, how the index is constructed, demand-pull and cost-push causes, the role of the money supply, and the costs of inflation, deflation and disinflation.
An OCR H460 answer to inflation, covering the CPI and RPI and how the price index is constructed, demand-pull and cost-push causes and the role of the money supply, and the costs of inflation, deflation and disinflation.
11 min answer →

What are the main macroeconomic objectives, and how is the performance of an economy measured against them?

2.1 Economic policy objectives: economic growth, low and stable inflation, low unemployment, a satisfactory balance of payments, and other objectives such as low inequality and environmental sustainability.
An OCR H460 answer to the macroeconomic objectives, covering economic growth, low and stable inflation, low unemployment and a satisfactory balance of payments, plus wider objectives such as low inequality and environmental sustainability, and how performance is judged and traded off.
9 min answer →