Download Unit 2 Managing The Economy

Economics Unit 2 Managing The Economy
Exam – 1 hour and 30 mins
Marked out of 50
Last question worth 30 marks
Content
OK? Notes
Economic growth – how is it
measured?
Problems with growth
figures for measuring living
standards
Problems with comparing
growth between countries
Inflation – how is it
measured?
Understand basket of goods
and how CPI is calculated
Why is inflation important?
Costs
How is unemployment
measured?
Claimant count
ILO measure
Types of unemployment
Why is unemployment
important? Costs
Effects of migration on
unemployment
Balance of payments
Visible goods
Invisible goods
Deficit
Surplus
Causes of the UK’s balance
of payments deficit
HDI as a development
measure – definition, what
is included?
Advantages and limitations
of the HDI
What other measures of
development are there?
E.g. mobile phones per
1000 population
National income – GDP – a
measure of economic
activity
Circular flow of income
Injections
Leakages / withdrawals
Incomes
Wealth e.g. shares, house
Aggregate demand
The formula for AD
Main influences on
consumption
Main influences on
investment
Main influences on
government investment
Exports minus imports.
What influences the trade
balance?
Exchange rate e.g. $ per £
Movements along the AD
curve – Why does AD slope
downwards ?
Shifts of the whole AD
curve. These are caused
by?
Aggregate Supply –
definition
What factors influence the
aggregate supply curve
Differences between
Keynesian and Classical
views on the AS curve –
HIGHER LEVEL
What would cause the AS
curve to shift?
Equilibrium real – national
output
The multiplier – calculations
not needed.
What is it?
The larger the multiplier the
greater the effect on the
economy of any injections
of income into it.
The greater the leakages in
the economy the lower the
final effect of any injection
into the economy.
Sustainable growth
Output gaps
Draw the AS / AD diagram here
- Include a diagram to
show this
Rates of economic growth –
growth is still growth but the
rate may fall or be low.
Causes of economic growth
Be careful when explaining data – unless GDP is
negative there is still growth!!!!!!
Benefits of economic
growth
Costs of economic growth
Macro – economic
objectives of government
Conflicts between
objectives – we have also
called these trade offs
Monetary policy
Use a diagram here
MPC – Monetary Policy
Committee
Base Interest Rate
MPC inflation target
Transmissions mechanism
– how changes in interest
rates affect the economy
Mortgage
Quantitative easing
Fiscal Policy
VAT
Excise Duty
Transfer payments
Automatic stabilisers
Income tax
Corporation tax
Budget deficit
Size of UK budget deficit
Implications of a budget
deficit. What has happened
in the UK?
Supply side policies
Examples of supply side
policies
Diagram of effective supply
side policies – AS / AD
Conflicts from using policy
instruments – see below
Distribution of income
Effect of interest rate on
exchange rate
Conflicts between fiscal and
supply side policies
Inflationary impact of fiscal
policy
Growth vs the environment
Black economy
Prioritisation