Economics
A-Level
The UK Economy – Performance
and Policies
- Macro Economics
,Macroeconomics
- The cataclysm of WW1 require statisticians to assist in measuring, after the war there was more measuring e.g. how much ene
consume and how much do we need to survive.
- The great depression high level of unemployment in theory decreasing wages should solve this, this is essentially where macro
born.
GDP – Gross domestic product - per capita = per head
Adjusted for Inflation and measured in x-years prices – hold the level constant
Measures of Economics Performance – Prices
Inflation – a persistent rise in the average level of prices over a period of time - the loss in the purchasing power of money, fall in
value of money
It's one of the key measures of financial well-being because it affects what consumers can buy for their money. If there is inflation
go as far - if wages don't keep up with inflation, purchasing power and the standard of living falls. A little inflation, however, typica
people to buy products sooner and makes it easier for companies to put up wages, both of those things boost economic growth.
That's why most countries' central banks have an inflation target of between 2% and 2.5%. .
Disinflation – prices are rising but at a decreasing rate, there is still inflation but it is falling
Deflation – prices are decreasing (inflation is in the negative)
UK Inflation Rates – 25% per annum in around 1975, 2000s around 2% per annum, financial crash rose to around 5%, now prices a
at a decreasing rate, risk of prices falling
Lots of strike activity in the 70s, possibly because they want their wages to go up in line with inflation
Hyperinflation – the rate of inflation is accelerating exponentially, money starts to lose its purchasing power e.g. in Germany in th
,Measuring Inflation
In the UK various measures are used:
- Consumer Price Index –looks at the prices of thousands of things consumers commonly spend money on
- Consumer Prices Index including owner-occupiers' housing costs (CPIH)
- Retail Price Index – the RPI
The index compares prices of products in on year against another year (the base year)
Prices of a representative basket of goods collected
The prices are weighted – a weight represents the proportion (%) of a consumers expenditure spent on that item
The basket of goods:
- This changes over time, recent entrances: Netflix, flavoured milk, fruit snack pots. Recent Dropouts: DVD recorders, hardwoo
- The basket is update annually, to ensure inflation is accurately measures by elimination biases such as: changing consumption
development of new goods and services
- around the middle of each month price collectors record about 100,000 prices for around 520 items consisting of specified ty
and services. The price collectors carry out price collection on behalf of the ONS, visiting a variety of shops in around 150 loc
throughout the UK. The price collectors go to the same shops each months, noting the prices of the same products so that ov
compare ‘like with like’
- For many goods and services it is more efficient to collect prices centrally as they are the same every were e.g. water supply,
about 80,000 prices for 190 items in all – are obtained from central sources
Reason for collecting prices in the middle of the month – no bank holidays, shops are unlikely to have excess stock, like at the en
and so won’t have sales on that do not reflect their normal prices
, What came into and was taken out of the Basket of Goods in 2020?
Added: Removed:
- Gluten Free breakfast cereal - Individual fruit pies
- Crumpets - Home killed beef, topside
- Beef joint - Frozen imported leg of lamb
- Fresh/diced mince turkey - Frozen chicken breasts
- Vegetable Crisps - Fresh turkey stakes
- Pre-mixed spirit drink - Softwood
- Reusable bottle - Car battery
- Airport parking - Blu-ray player
- Gin - DVD player
- Computer games - MP4 player
- Burger in a bun - Computer game
- Self tanning - Eat in burger bun
- Takeaway burger bun
- Bank overdraft charges
A-Level
The UK Economy – Performance
and Policies
- Macro Economics
,Macroeconomics
- The cataclysm of WW1 require statisticians to assist in measuring, after the war there was more measuring e.g. how much ene
consume and how much do we need to survive.
- The great depression high level of unemployment in theory decreasing wages should solve this, this is essentially where macro
born.
GDP – Gross domestic product - per capita = per head
Adjusted for Inflation and measured in x-years prices – hold the level constant
Measures of Economics Performance – Prices
Inflation – a persistent rise in the average level of prices over a period of time - the loss in the purchasing power of money, fall in
value of money
It's one of the key measures of financial well-being because it affects what consumers can buy for their money. If there is inflation
go as far - if wages don't keep up with inflation, purchasing power and the standard of living falls. A little inflation, however, typica
people to buy products sooner and makes it easier for companies to put up wages, both of those things boost economic growth.
That's why most countries' central banks have an inflation target of between 2% and 2.5%. .
Disinflation – prices are rising but at a decreasing rate, there is still inflation but it is falling
Deflation – prices are decreasing (inflation is in the negative)
UK Inflation Rates – 25% per annum in around 1975, 2000s around 2% per annum, financial crash rose to around 5%, now prices a
at a decreasing rate, risk of prices falling
Lots of strike activity in the 70s, possibly because they want their wages to go up in line with inflation
Hyperinflation – the rate of inflation is accelerating exponentially, money starts to lose its purchasing power e.g. in Germany in th
,Measuring Inflation
In the UK various measures are used:
- Consumer Price Index –looks at the prices of thousands of things consumers commonly spend money on
- Consumer Prices Index including owner-occupiers' housing costs (CPIH)
- Retail Price Index – the RPI
The index compares prices of products in on year against another year (the base year)
Prices of a representative basket of goods collected
The prices are weighted – a weight represents the proportion (%) of a consumers expenditure spent on that item
The basket of goods:
- This changes over time, recent entrances: Netflix, flavoured milk, fruit snack pots. Recent Dropouts: DVD recorders, hardwoo
- The basket is update annually, to ensure inflation is accurately measures by elimination biases such as: changing consumption
development of new goods and services
- around the middle of each month price collectors record about 100,000 prices for around 520 items consisting of specified ty
and services. The price collectors carry out price collection on behalf of the ONS, visiting a variety of shops in around 150 loc
throughout the UK. The price collectors go to the same shops each months, noting the prices of the same products so that ov
compare ‘like with like’
- For many goods and services it is more efficient to collect prices centrally as they are the same every were e.g. water supply,
about 80,000 prices for 190 items in all – are obtained from central sources
Reason for collecting prices in the middle of the month – no bank holidays, shops are unlikely to have excess stock, like at the en
and so won’t have sales on that do not reflect their normal prices
, What came into and was taken out of the Basket of Goods in 2020?
Added: Removed:
- Gluten Free breakfast cereal - Individual fruit pies
- Crumpets - Home killed beef, topside
- Beef joint - Frozen imported leg of lamb
- Fresh/diced mince turkey - Frozen chicken breasts
- Vegetable Crisps - Fresh turkey stakes
- Pre-mixed spirit drink - Softwood
- Reusable bottle - Car battery
- Airport parking - Blu-ray player
- Gin - DVD player
- Computer games - MP4 player
- Burger in a bun - Computer game
- Self tanning - Eat in burger bun
- Takeaway burger bun
- Bank overdraft charges
