Economics Notes: Economic Indicators
1. What Are Economic Indicators?
Statistics used to assess the health and direction of an economy.
2. Main Economic Indicators
Gross Domestic Product (GDP):
oMeasures total value of goods/services produced.
oReal GDP adjusts for inflation.
Inflation Rate:
oMeasures the rate of change in general price levels.
oCommonly measured by CPI (Consumer Price Index).
Unemployment Rate:
oPercentage of the labour force without a job but actively seeking
work.
Balance of Payments:
oTracks economic transactions with the rest of the world.
Interest Rates:
oCost of borrowing, set by central banks.
Consumer Confidence Index:
oGauges how optimistic consumers are about the economy.
Business Confidence Index:
oMeasures business outlook and investment intentions.
3. Uses of Indicators
Guide government policy
Help businesses plan production
Aid investment decisions
