Download new ial scheme of work for unit 2 File

Unit 2
EC4 I and EC4 J Scheme of Work
New Specification
August to October
break.
Following on from our introduction to AD in June, we continue with this
topic.
Components of AD.
Consumption which included MPC and MPS and other factors
affecting C including:
Disposable income
IR, social safety net, confidence, culture, wealth effect.
AD Curve (shifts and movement along)
Investment
Factors affecting investment
Interest Rates
Confidence (there are quantifiable measures of business confidence which
we could use)
Risk
Influence of Govt and regulations
Level of retained profits
Accelerator
Government Expenditure
Exports minus Imports
All the major factors of current account are mentioned here, but perhaps
the teaching of this is left to the section entitled “Balance of Payments”
Definition of Marginal Propensity to import.
Quiz on AD.
August to October
break.
Aggregate Supply
Distinction between movement along and a shift in AS curve.
Different types of AS curves (Classical and Keynesian).
Distinction between short and long term AS curves.
Short run: costs of raw materials, exchange rates and taxes.
Long run: technological changes, relative productivity, education and skills,
regulation and tax changes, demographic changes, competition policy.
August to October
break.
Interaction of AD and AS
Impact on real output and price level as a result of changes in one or both
curves.
Multiplier.
Calculations with the multiplier.
Significance of multiplier (which I suppose means leakages).
Circular Flow of Y
Distinction between Y and wealth bring that up in Consumption anyway.
Injections and withdrawals (which we will have mentioned in multiplier
anyway)
Test on AD and LRAS
Measures of Economic
Performance
From October break to
end of November.
Economic Growth
Real GDP as a measure
Distinction between real and nominal and total and per capita GDP.
Awareness of other national y measures.
GNP, GNI, GDP at PPP.
GDP comparisons over time and between countries.
The limitations of using GDP to compare living standards between
countries and over time.
More about growth
Causes of growth: increase in AD or potential growth due to AS shift.
Constraints on growth: poor FOP, inadequate capital markets, unstable
Govt, poor infrastructure, absence of property rights and poor ovt
regulation.
Benefits of growth: these can be illustrated with examples for citizens,
firms and Govt.
Costs of growth: environment, Bal of Pay, inflation (some could be worse
off in real terms), opportunity cost of growth.
Output gaps. Difference between actual and potential growth.
POGs and NOGs.
Definition and characteristics of recession.
Christmas test will examine everything up to here.
December 2015
Employment and Unemployment
Measures of U using ILO
Causes of U: skills mismatch, occupational immobility, geo immobility,
demand deficiency, real wage inflexibility.
The consequences of U; poverty, G budgets, social effects more could be
added here.
Distinction between U and underemployment
Significance of changes of rates of employment and unemployment.
Impact of migration on employment and unemployment.
January 2016
Inflation
Inflation, disinflation, deflation.
Calculating inflation CPI referring to weighting.
Producer Price Index as possible future indicator
Causes including demand pull and cost push, excessive growth of money
supply.
Effects of inflation including Y distribution, competitiveness and I.
From end of January we
increase the lessons to
six a week.
Late January to Feb
break:
Balance of Payments
Components of B of P
Surpluses and deficits.
Causes of an imbalance, at a basic level. (This seems a lot shorter than the
previous specification – look at past papers, email examiner to find out the
depth we need to go here) Impact of deficit? Corrective measures?)
Late January to Feb
break:
Measures of development
HDI
Definitions of PPPs
Advantages of HDI is making comparisons between countries.
Other measurements:
Adults males in agriculture, access to clean water, energy consumption per
capita, access to mobile phones per 1,000.
March
Macroeconomic Objectives
Growth, price control, full employment, equilibrium in Bal of Pay.,
balanced fiscal budgets, fair redistribution of Y, protection of the God
damn environment.
March
Conflicts between objectives:
Phillips Curve, economic growth and environmental sustainability, inflation
and current account, balanced budgets and short run growth.
March to mid April
Macroeconomic Policy Instruments.
Monetary and Fiscal and use of diagrams.
Decision making process of the Bank of England will be covered.
Definition of Supply Side policies and use of supply side policies such as
free market and interventionist SS measures.
Free market: deregulation, privatisation, reduction in taxation, comp
policy, changing level of benefits, cutting bureaucracy.
Interventionist: subsidies to education, training and investment, regional
policy, finance for investment start ups, infrastructure.
Strengths and Weaknesses of Demand and Supply Side Policies
Mid April to May:
Revision
May
TEST