Measures of Economic Performance (GDP, Inflation, Unemployment)

    OCR
    GCSE

    The quantitative assessment of aggregate economic activity constitutes the foundation of macroeconomic policy formulation. Candidates must interrogate the methodology, utility, and limitations of primary indicators: Gross Domestic Product (GDP) for growth, the Consumer Price Index (CPI) for inflation, and the Labour Force Survey (LFS) versus Claimant Count for unemployment. Mastery requires critical evaluation of these metrics as proxies for standard of living and economic welfare, acknowledging the distinction between nominal and real values, and understanding the trade-offs inherent in simultaneous policy targets.

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    Objectives
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    Exam Tips
    4
    Pitfalls
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    Key Terms
    4
    Mark Points

    What You Need to Demonstrate

    Key skills and knowledge for this topic

    • Award marks for precise definitions of key terms (e.g., 'Consumer Price Index' not just 'inflation rate').
    • Credit logical chains of reasoning (BLT: Because, Leading to, Therefore) when explaining consequences.
    • Responses must explicitly use data from the provided case study to secure AO2 application marks.
    • Evaluation must go beyond listing pros/cons to assess magnitude, time lags, or prioritization of objectives.

    Marking Points

    Key points examiners look for in your answers

    • Award marks for precise definitions of key terms (e.g., 'Consumer Price Index' not just 'inflation rate').
    • Credit logical chains of reasoning (BLT: Because, Leading to, Therefore) when explaining consequences.
    • Responses must explicitly use data from the provided case study to secure AO2 application marks.
    • Evaluation must go beyond listing pros/cons to assess magnitude, time lags, or prioritization of objectives.

    Examiner Tips

    Expert advice for maximising your marks

    • 💡When calculating percentage change, always show the working: (New - Old) / Old x 100.
    • 💡In 6-mark 'Analyse' questions, provide two distinct, developed chains of reasoning linked to the context.
    • 💡For 12-mark 'Evaluate' questions, ensure the final judgement is supported by the preceding analysis, not just a summary.
    • 💡Check axis labels on charts carefully; distinguish between index numbers, percentages, and absolute monetary values.

    Common Mistakes

    Pitfalls to avoid in your exam answers

    • Confusing a 'fall in the rate of inflation' (disinflation) with a 'fall in prices' (deflation).
    • Stating 'unemployment costs the government money' without specifying the mechanism (increased welfare payments vs. lost income tax revenue).
    • Failing to distinguish between Real GDP (adjusted for inflation) and Nominal GDP.
    • Conflating 'standard of living' (quantitative) with 'quality of life' (qualitative).

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    Key Terminology

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