Objective 5: Economic Indicators

Formulation of economic policies requires an understanding of accurate measures of the economy's performance.

Gross Domestic Product (GDP) is the total dollar value of all final goods and services produced in a year.
Consumer price index (CPI) measures the monthly price changes of sample consumer goods and services.
Unemployment rate is the percentage of the labor force without jobs.
Balance of trade is the difference in dollar value between imports and exports.
Stock market averages are select groups of stocks whose performance is averaged, and over time, the averages serve as an indicator for the market. The Dow Jones Industrial Average, Nasdaq, and the S&P500 are examples of popular stock market averages that are frequently reported in the popular press.
Productivity is the amount of output per unit of input over a period of time.

Productivity and the standard of living are generally higher in economies that have limited government planning and limited control of the economy.

Economics