Download some psychology notes and more Summaries Economics in PDF only on Docsity!
Abbreviations: AL 2 = A Level Paper 2 ; AL3 = A Level Paper 3; the number refers to the year of examination 17 AL 2
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
2.1.1 Economic growth a) Rates of change of real Gross Domestic Product (GDP) as a measure of economic growth 3a 1a 3a b) Distinction between:
- real and nominal 1b
- total and per capita
- value and volume c) Other national income measures:
- Gross National Income (GNI) 1a d) Comparison of rates of growth between countries and over time e) Understanding of Purchasing Power Parities (PPPs) and the use of PPP- adjusted figures in international comparisons 2a 5c f) The limitations of using GDP to compare living standards between countries and over time 1b
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
g) National happiness:
- UK national wellbeing
- the relationship between real incomes and subjective happiness 6c 6c 2.1.2 Inflation a) Understanding of:
- inflation
- deflation 1b 6d
- disinflation b) The process of calculating the rate of inflation in the UK using the Consumer Prices Index (CPI) 1b c) The limitations of CPI in measuring the rate of inflation d) The Retail Prices Index (RPI) as an alternative measure of the rate of inflation e) Causes of inflation:
- demand pull
- cost push 1c 1b
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
- frictional unemployment
- seasonal unemployment
- demand deficiency and cyclical unemployment
- real wage inflexibility e) The significance of migration and skills for employment and unemployment 2e f) The effects of unemployment on consumers, firms, workers, the government and society 2.1.4 Balance of Payments a) Components of the balance of payments, with particular reference to the current account, and the balance of trade in goods and services 3b b) Current account deficits and surpluses 3c 2a c) The relationship between current account
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
imbalances and other macroeconomic objectives d) The interconnectedness of economies through international trade 1e 2.2.1 The characteristics of AD – note this topic is typically tested as part of general AD/AS analysis a) Components of AD: C+I+G+(X-M) 2a 2c 6d b) The relative importance of the components of AD 2c c) The AD curve d) The distinction between a movement along, and a shift of, the AD curve 2.2.2 Consumption a) Disposable income and its influence on consumer spending 4a 6b b) An understanding of the relationship between savings and consumption 1ac c) Other influences on consumer spending:
- interest rates 1c
- consumer confidence 2c 2b
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
2.2.5 Net trade a) The main influences on the (net) trade balance:
- real income
- exchange rates
- state of the world economy
- degree of protectionism
- non-price factors 2.3.1 The characteristics of AS - note this topic is typically tested as part of general AD/AS analysis a) The AS curve b) The distinction between movement along, and a shift of, the AS curve c) The relationship between short-run AS and long-run AS 2.3.2 Short-run AS a) Factors influencing short-run AS:
- changes in costs of raw materials and energy 6b
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
- changes in exchange rates
- changes in tax rates 2.3.3 Long-run AS a) Different shapes of the long-run AS curve:
- Keynesian
- Classical b) Factors influencing long- run AS: 4a
- technological advances 3c
- changes in relative productivity 2b
- changes in education and skills 2e
- changes in government regulations
- demographic changes and migration 2e
- competition policy
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
- the marginal propensity to consume (MPC)
- the marginal propensity to save (MPS)
- the marginal propensity to tax (MPT)
- the marginal propensity to import (MPM) e) Calculations of the multiplier using the formulae 1/(1-MPC) and 1/MPW, where MPW=MPS+MPT+MPM 2bc 2a 1b 4b 4b f) The significance of the multiplier to shifts in AD 2b 6d 2.5.1 Causes of growth a) Factors which could cause economic growth 2d 3c 6e b) The distinction between actual and potential growth c) The importance of international trade for (export-led) economic growth 1e
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
2.5.2 Output gaps a) Distinction between actual growth rates and long-term trends in growth rates b) Understanding of positive and negative output gaps and the difficulties of measurement 5b c) Use of an AD/AS diagram to illustrate an output gap (level of spare capacity) in an economy 2a 2.5.3 Trade (business) cycle a) Understanding of the trade (business) cycle 4a b) Characteristics of a boom 4a c) Characteristics of a recession 2.5.4 The impact of economic growth a) The benefits and costs of economic growth and the impact on:
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
- asset purchases to increase the money supply (quantitative easing) 6d c) Fiscal policy instruments:
- government spending and taxation 7 1e 8 1e 6b d) Distinction between government budget (fiscal) deficit and surplus 4bc e) Distinction between, and examples of, direct and indirect taxation 4a 1e 6a f) Use of AD/AS diagrams to illustrate demand-side policies 1a 1e 7 g) The role of the Bank of England:
- the role and operation of the Bank of England's Monetary Policy Committee h) Awareness of demand- side policies in the Great
AL
AL
AL 2
AL
AL
AL 3
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
Depression and the Global Financial Crisis of 2008
- different interpretations
- policy responses in the US and UK i) Strengths and weaknesses of demand- side policies 1e 2d 7 2.6.3 Supply side policies General questions on SSPs 6e^ 1e^ 2e^8 1d^ 6e^ 6e a) Distinction between market-based and interventionist methods b) Market-based and interventionist policies:
- to increase incentives
- to promote competition
- to reform the labour market
- to improve skills and quality of the labour force
- to improve infrastructure 2b 1e 7
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
25 A
L
AL
4.1.1 Globalisation a) Characteristics of globalisation 8 b) Factors contributing to globalisation in the last 50 years
c) Impacts of globalisation and global companies on individual countries, governments, producers and consumers, workers and the environment 6c 4.1.2 Specialisation and trade a) Absolute and comparative advantage (numerical and diagrammatic): assumptions and limitations relating to the theory of comparative advantage 1b 2c (abs ) 5b b) Advantages and disadvantages of specialisation and trade in an international context 1e 1e 4.1.3 Pattern of trade a) Factors influencing the pattern of trade between countries and changes in trade flows between countries:
- comparative advantage
- impact of emerging economies
- growth of trading blocs and bilateral trading agreements 7 1e
- changes in relative exchange rates 4.1.4 Terms of trade a) Calculation of terms of trade 2a 4ab b) Factors influencing a country's terms of trade c) Impact of changes in a country's terms of trade 4c
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
25 A
L
AL
4.1.5 Trade blocs and the WTO a) Types of trading blocs (regional trade agreements and
- bilateral trade agreements):
- free trade areas
- customs unions
- common markets
- monetary unions: conditions necessary for their success with particular reference to the Eurozone 6a 2e b) Costs and benefits of regional trade agreements 1a 6e 2e 1e c) Role of the WTO in trade liberalisation d) Possible conflicts between regional trade agreements and the WTO 4.1.6 Restrictions on free trade General questions on restrictions 6d^7 a) Reasons for restrictions on free trade b) Types of restrictions on trade:
- tariffs 5a
- quotas
- subsidies to domestic producers
- non-tariff barriers c) Impact of protectionist policies on consumers, producers, governments, living standards, equality 7 5a
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
25 A
L
AL
- economic growth and employment/unemployment
- rate of inflation
- foreign direct investment (FDI) flows 4.1.9 International competitiveness a) Measures of international competitiveness:
- relative unit labour costs 3ab
- relative export prices b) Factors influencing international competitiveness 2b 2a 7 1d c) Significance of international competitiveness:
- benefits of being internationally competitive
- problems of being internationally competitive 4.2.1 Absolute and relative poverty a) Distinction between absolute poverty and relative poverty 6a b) Measures of absolute poverty and relative poverty c) Causes of changes in absolute poverty and relative poverty 6b 2d 4.2.2 Inequality a) Distinction between wealth and income inequality b) Measurements of income inequality:
- the Lorenz curve (diagrammatic analysis) 6a
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
AL
25 A
L
AL
- the Gini coefficient 4b^ 5c^ 1e c) Causes of income and wealth inequality within countries and between countries 4a 5b 1b 8 6b 1d 1d d) Impact of economic change and development on inequality 2d e) Significance of capitalism for inequality 6d 4.3.1 Measures of development a) The three dimensions of the Human Development Index (HDI) (education, health and living standards) and how they are measured and combined 5a 2b b) The advantages and limitations of using the HDI to compare levels of development between countries and over time 5b c) Other indicators of development 4.3.2 Factors influencing growth and development General questions on factors 2b 2d 2d 8 a) Impact of economic factors in different countries:
- primary product dependency 1c 6c 1e
- volatility of commodity prices 2d
- savings gap: Harrod-Domar model
- foreign currency gap
- capital flight 3b
- demographic factors 6b^ 2b^ 2e
- debt 2a
- access to credit and banking 6e
- infrastructure 6b
