IntroductionMacroeconomics is concerned with the economy as a whole, such as production and growth which measures the economy's total income in goods and services and inflation whose percentage increases each year in the price of goods and services. Also included is employment, which concerns changes in the labor market. The UK government's aim is to achieve stable growth and employment. This is what the UK needs to build a strong economic future. The government aims to increase encouraging growth rates and achieve increasing success by creating economic opportunities for the public. 1.1 Explain the purpose of a selection of indicators of national economic behavior which are economic growth, unemployment, inflation and balance of payments. Economic Growth Growth is the most basic indicator of the health of an economy, or the rate at which national income grows. Economic growth is an increase in what an economy can produce if it uses all its scarce resources. A combination of two goods that can be produced in a country when available resources are fully and efficiently utilized is called a production possibilities frontier (PPF). An increase in the productive potential of an economy can be demonstrated by an outward shift in the economy's PPF. The simplest way to show economic growth is to combine all goods into consumer goods and investment goods. A rightward shift in a PPF means that an economy has increased its volume of production. PPF Unemployment Unemployment is a big problem in this society because it is a waste of resources. There is a possibility that this will lead to poverty for those who are out of work. High unemployment is an indicator of poor national economic performance, vice versa... middle of paper... A current account deficit can be the reason why an industry, or an entire sector of the economy, goes into crisis . in refusal. Over the last 30 years the UK economy has re-industrialised. Man-made goods that were previously created domestically are now imported from abroad. The increase in the amount of man-made goods imported has severely pushed the UK's current account into deficit. External Shocks An external shock that is beyond a country's control can have profound impacts on that country's current accounts. For example, the UK is now a net importer of oil because North Sea oil commodities are disappearing. Demand for oil is price inelastic because it has few alternatives. If the supply of oil from the Middle East were disrupted, even a moderately small adjustment in the price of oil would more or less permanently push the UK current account into a further deficit..