What this lesson teaches
I can read real GDP, GNI, per-capita figures, unemployment rate, CPI, balance of trade, HDI and the Gini coefficient.
Syllabus 9570, 3.2.1(c). Standard of Living and Macroeconomics Indicators: Macroeconomic indicators; Indicators of economic performance include real Gross Domestic Product (GDP) or Gross National Income (GNI), real GDP or GNI per capita, unemployment rate, Consumer Price Index (CPI) and balance of trade; Human Development Index (HDI) as an indicator to reflect standard of living; Gini coefficient as an indicator to reflect income distribution
I can compare living standards over time and between countries, and say where the comparison is weak.
Syllabus 9570, 3.2.1(d). Standard of Living and Macroeconomics Indicators: Comparison of living standards over time and over space (between economies)
Make a guess
A table shows real GDP growth falling from 5.2% to 1.4% over four years. A student writes "the economy shrank". Is that right?
- No. Real GDP grew every year, just more slowly.
- Yes, by 3.8%, the drop in the growth rate.
- Yes. A big fall in growth means a fall in output.
Show the answer
No. Real GDP grew every year, just more slowly.
Growth figures measure the speed of change. As long as growth is positive, output is still rising.
Give the overall trend, add one refinement, and quote the figures that prove it.
Every case study opens with short data questions worth 1 to 4 marks. They are the easiest marks in the paper if you read the data the way markers do. Most mark schemes give 1 mark for the overall trend and 1 for a refinement, and they expect the figures quoted.
The overall trend is the general direction from the first year to the last: rose, fell, or stayed about the same. A refinement adds one precise detail: the year it peaked, an exception to the trend, or when the change was fastest. Listing every year earns nothing extra.
Watch what each series measures. A growth rate is the speed of change, not the level. If real GDP growth falls from 5.2% to 1.4%, real GDP still rose every year, just more slowly. Likewise, a fall in inflation means prices rise more slowly, not that they fall.
A rate that moves from 3.0% to 3.2% has risen by 0.2 percentage points. As a percentage of the old rate, that is a rise of about 7%. Say "percentage points" for the gap between two rates, so a marker cannot misread you.
A price index compares prices with a base year set to 100. A CPI of 117.5 means prices are 17.5% above the base year. It does not mean prices are higher than in a country whose index reads 110, because each country has its own base. The CPI is weighted: an item with a large share of household spending moves the index more.
When an extract supports your point, quote the exact words in quotation marks, then explain what they show. A quote followed by "this shows that ..." is how evidence marks are earned in the explain and discuss parts too.
- Trend + refinement
- Overall direction first, then one precise detail: a peak, an exception or the fastest change.
- Percentage points
- The gap between two rates: 3.0% to 3.2% is 0.2 points, a 7% rise in the rate.
- Growth rate
- Falling but positive growth means the level is still rising.
- Index
- 117.5 means 17.5% above the base year; each country has its own base.
| Year | Real GDP growth (%) | Unemployment rate (%) | CPI (2020 = 100) | Inflation (%) | Nominal wage growth (%) |
|---|---|---|---|---|---|
| 2020 | -3.0 | 4.6 | 100.0 | 0.5 | 1.0 |
| 2021 | 5.2 | 4.0 | 102.0 | 2.0 | 3.5 |
| 2022 | 4.1 | 3.4 | 108.1 | 6.0 | 4.5 |
| 2023 | 2.6 | 3.1 | 112.4 | 4.0 | 4.8 |
| 2024 | 1.9 | 3.0 | 115.2 | 2.5 | 3.6 |
| 2025 | 1.4 | 3.2 | 117.5 | 2.0 | 3.0 |
Worked example: Trend and refinement from Table 1
Table 1 below shows invented data for Country N. Question: describe the trend in Country N's real GDP growth from 2021 to 2025.
- Overall trend: real GDP growth slowed, falling from 5.2% in 2021 to 1.4% in 2025.
- Refinement: growth stayed positive every year, so real GDP kept rising, only more slowly.
- That is the full 2 marks. Do not list each year in turn, and do not say the economy shrank.
- For "compare", give one similarity and one difference. Inflation and wage growth both rose and then fell, but inflation peaked first, at 6.0% in 2022, while wage growth peaked at 4.8% in 2023.
Watch out for this
Real GDP growth fell from 5.2% to 1.4%, so Country N's output fell.
Output fell only if growth is negative. Growth of 1.4% still means real GDP rose, but more slowly than before.
Check your understanding
Country N's unemployment rate rose from 3.0% in 2024 to 3.2% in 2025. Which description is accurate?
- Unemployment rose by 0.2%.
- Unemployment rose by about 7 percentage points.
- Unemployment rose by 0.2 percentage points.
Show the answer
Unemployment rose by 0.2 percentage points.
Right. The gap between two rates is measured in percentage points: 3.2 - 3.0 = 0.2.