Macroeconomic performance
What Macroeconomic performance means in Economics A-Level, as defined for AQA.
Definitions of Macroeconomic performance
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Reference: AQA
Affected by shocks through changes in real GDP and the price level, with a negative supply shock reducing real output while raising the price level, creating stagflation.
Affected by unemployment, which wastes scarce resources and leaves the economy operating inside its production possibility frontier with a negative output gap.
Affected by distribution because a more equal distribution raises aggregate demand, as lower-income households have a higher marginal propensity to consume.
Stifled by entrenched deflation despite low interest rates, with falling aggregate demand leading to lower economic growth and higher cyclical unemployment.
The state of the economy diagnosed by tracking real GDP, inflation, unemployment and investment together to identify the current phase of the cycle.
Wage discrimination can reduce aggregate demand if wealth is transferred to shareholders, and it increases income inequality across the economy.
Topics that use Macroeconomic performance
- Aggregate demand and aggregate supply analysis (AQA A-Level)
- Discrimination in the labour market (AQA A-Level)
- Economic growth and the economic cycle (AQA A-Level)
- Employment and unemployment (AQA A-Level)
- Inflation and deflation (AQA A-Level)
- The distribution of income and wealth (AQA A-Level)
Related terms
- Aggregate demand
- Negative output gap
- Aggregate supply
- Inequality
- Productive capacity
- Real national output
- Supply-side policies
- Age discrimination
Using Macroeconomic performance in the exam
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