1. Opening Activity A: Short presentation of graphs by authors
B: Working through in the groups below compare your graphs - find similarities / differences in the timing of major events shown on your graphs across markets. (ie Comparing Unemployment (“UE”) and Short Term Interest Rates (“STIR”) -> did rising UE precede/follow lower STIR, any ideas why?) – please get a paper copy
Learning Objective: Have an appreciation and understanding of recent UK economic history

2. The UK economy - performance and policies
Comparison Groups
Session
Group A
Group B
Group C 1
GDP
GDP Growth Rate
Gov.Debt to GDP
Interest Rate
Oil Price
Unemployment
Population
GBP/USD
GBP/EUR
Balance of Trade 2
Gov. Debt to GDP
Balance of Trade Unemployment 3
The UK economy - performance and policies

3. Start of Topic: Economic Growth
Economic Growth is the first section (2.1.1) part of “Measures of Economic Performance”
The UK economy - performance and policies

4. Why Study Economic Growth?
Background
(Macro)Economics impacts the welfare of billions, the environment and social stability.
The measurement of Economic Growth is a key economic statistic
The UK economy - performance and policies

5. Activity – please start!
In anticipation of looking at Economic Growth please read the general definitions for:
GDP (Gross Domestic Product)
GNP (Gross National Product)
GNI (Gross National Income)
…in the Edexcel “Getting started” guide p (a) to (c) book marked last lesson
Macroeconomics: Theme 2 - The UK Economy - performance and policies

6. Key Measures of Economic Performance & Growth
Value of (UK) Economic Activity between 2 dates
Gross Domestic Product (GDP)
Gross National Product (GNP)
Gross National Income (GNI)
GROWTH: Change in above measures
So how do we track Economic Activity in an economy? -> Quick exercise then Circular flow of Income
The UK economy - performance and policies

7. Exercise: Value vs Growth
The UK’s GDP is ~$3 trillion and India’s GDP about $2 trillion.
If the UK growth in GDP is 2% and India’s is 10%, who will have the larger GDP in 6 years?
Growth Rate UK
India 2%
10%
Year $ $ 1 $ $
=3*(1+0.02)
=2*(1+0.1)
Year 1 done for you….there is a shortcut if you know the compounding formula 
The UK economy - performance and policies

8. The UK economy - performance and policies
UK vs India GDP Growth
If these growth rates materialise, the size of India’s economy will overtake the UK’s in 6 years.
Compound Growth (also used for Compound Interest):
UK = $3.0 x (1+0.02)6
The UK economy - performance and policies