1. How can we tell if an economy is performing well? You may have heard people talking about the ‘performance’ of the Irish economy. How can we tell if an economy is performing well or poorly? In sport, coaches use numbers and statistics to judge performance. They count kilometres run, goals scored, tackles made or passes completed. Similarly, economists use numbers and statistics to measure the performance of the economy. We call these numbers and statistics economic indicators.
There are four key indicators used by economists around the world to tell if an economy is performing well:
Inflation Rate Unemployment Rate
Economic Indicators
Economic Growth Interest Rates
LO 3.9 3.10 3.11
2. What is unemployment? The labour force refers to those people between the ages of 18-65 who are willing and able to work. It does not include full-time students, pensioners or those with a disability that prevents them from working.
Unemployment refers to those people who are willing to work, but are unable to find work. People who are unemployed usually qualify for a weekly social welfare payment from the State to help them cover their basic needs. Unemployment is affected by economic growth. When economic growth is strong, unemployment falls. When economic growth is weak, unemployment rises.
