revision chapter 5

The economy examine in:
* Economics growth - when economy increase in output.When output increasing,unemployment usually falls for economy it is better when unemployment is low.
* Inflation/deflation
* Assessed by examining it is balance of payments.
There are some reasons why inflation rate has fallen and stayed relatively low:
*reduction in inflationary expectations (result from government monetary policy)
* high value of the pound
* increased global competition ( when firms  have to keep their costs and prices low)
* advanced in technology adn the immigration from EU and the rest of the world it helped to increase AD and AS.
Inflation rate - the % increase in the proce level over a period of time.
Basicly government have always had general policy objections in the macroeconomy but in recent years many have more specific targets.
Sustainable economic growth - economic growth step by step =>increase in AD/AS=> trend growth (the expected increase in potential output over time.It is measure of how fast the economy can grow without generating inflation.
Current account deficit - when money going out from the country more then money going in the result of sales of it is exports,income and current  transfers from abroad being less than imports and income and current transfers going abroad.
Economic stability when:
balance of payments  position has been somewhat downgraded (decrease) as an objective.
Hyperinflation - an inflation rate above 50%
Nominal GDP - an output which is measured in terms of the prices in the year.Nominal GDP can be distorted by inflation.
When GDP risen it is mean that labour prodactivity is risen (output per worker hour)
Informal economy - in comparing country's real GDP over time and between country's, other problems cam occure,economic activity that is nor recorded of registered with the authorities in order to avoid paying tax or complying with regulations,or because the activity is illegal.
Consumer price index - a measure of changes in the price of a representative basket of consumer goods and services.
Retail price index - measure of infaltion that is used for adjusting and other benefits to take account of changes in inflation and frequently used in wage negotiations.