w w ap eP m e tr .X w s er om .c Unit 3 Macro economic measurement and inflation Recommended Prior Knowledge Understanding of micro/ macro distinction Context The unit introduces the measurement of macro economic variables and sets up the first elements of international economic aspects Outline The ways employment/unemployment and productivity are measured are examined and the structure of the balance of payments is set out. The construction of a price index to measure inflation is explained before the causes and consequences of inflation itself are considered. 5a 4f Candidates should: • understand the idea of the labour force • be familiar with the format of employment statistics and their recent patterns and trends • know how unemployment is measured and how it has behaved • understand the meaning and measurement of productivity Candidates should: • distinguish between exports and imports, goods and services • distinguish between trade and capital flows • understand the structure of the balance of payments account • analyse a balance of payments account • represent exports and imports in supply and demand diagrams • • • • • • • • • analyse recent trends in employment and unemployment compare trends between economies contrast different methods of measuring unemployment make international comparisons of productivity and comparisons over time Bamford Chap 5 Anderton Unit s 29 72, 97 Anderton* Unit 7 Economics 16-19 Unit 10 www.bized.ac.uk learning materials economics topic 9 Unemployment and inflation www.statistics.gov.uk employment and productivity data classify different trade and capital transactions assemble balance of payments table from random items examine recent balance of payments accounts compare international positions produce supply and demand diagrams for national and international economy Bamford Chap 4 Anderton Unit 30 Anderton* Unit 12 Economics 16-19 Unit 8 www.bized.ac.uk learning materials economics topic 11 International economics + virtual developing country trade field trip www.imf.org balance of payments data 8708/2 O/N 2001, 9074/2 J 1999, 9074/2 N 1998, 9074/2 J 1997 5b 6a Candidates should: • understand the idea of a general price level • construct a weighed price index and use it to measure price changes • be aware of the problems in constructing, maintaining and interpreting a price index • interpret the meaning of changes in price data Candidates should: • define inflation • understand the terms describing aspects of inflation • analyse the causes and consequences of inflation • • • • • examine trends in inflation construct student price index calculate changes over time contrast changes in weights over time analyse the differences between alternative price indices Bamford Chap 5 Anderton Unit 28 Anderton* Unit 9 Economics 16-19 Unit 11 www.statistics.gov.uk inflation data 8708/2 O/N 2001, 9074/2 N 1998 • case study of hyper inflation e.g. Germany 1923 contrast past instances of cost push, demand pull and monetary inflation compare effects of inflation from different viewpoints e.g. borrowers, lenders and government, taxpayers examine links between inflation and international competitiveness Bamford Chap 6 Anderton Unit 89 Anderton* Unit 9 Economics 16-19 Unit 11 www.bized.ac.uk learning materials economics topic 9 Unemployment and inflation + virtual developing country copper field trip www.bankofengland.co.uk inflation report 9074/2 N 1998 • • •