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Economic performance - Coggle Diagram

- - - - Economics Growth
        
        Economic growth is the measure of the rate of change of a country's output. This is measured in GDP (Gross Domestic Porduct)
        
        Key benefits of Economic Growth:
        
        Job Creation
        
        Rising Incomes
        
        Improved Standards of living
        
        Improved international competitiveness of the UK economy
        
        Improved confidence of:
        
        ○ Consumers to Spend
        
        ○ Business to invest
        
        Lower government spending on job seekers allowance and associated benefits
        
        Tax revenue are likely to increase allowing the government to re-invest in infrastructure or spend on public services
      - Inflation
        
        Inflation is the rate of change of average prices in an economy as measured by the Consumer Price Index (CPI) Inflation is important as it affects the value of money, workers' wages demands and consumer confidence. Rising inflation damages the value of money and erodes spending power. The UK's target inflation rate is 2% ( +/- 1%) and is set by the bank of England.
      - Minimising Unemployment
        
        Unemployment is a major problem as it represents a waste of resources. High unemployment is typically and indicator of poor economic performance. Economies that have strong economics growth are likely to have low unemployment, therefore governments wish to pursue a policy of low unemployment
        
        Benefits of low unemployment
        
        Higher consumption and aggregate demand
        
        Higher incomes
        
        Improved standard of living
        
        High tax revenue for government
        
        Lower government spending on unemployment related welfare
        
        Improved productivity of UK economy
        
        Reduced poverty
        
        Social benefits
        
        ○ Reduced crime
        
        ○ Improved wellbeing
      - Stable Balance of payments
- - - - Frictional: Short-term unemployment while switching jobs or entering the workforce.
      - Structural: Mismatch between workers' skills and available jobs.
      - Cyclical: Job losses caused by economic downturns.
      - Seasonal: Jobs that depend on the time of year (e.g., tourism, farming).
      - Classical/Real-Wage: Wages set too high, causing excess labor supply.
      - Voluntary: People choosing not to work at current wages.