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L6 Economics Paper 2 Revision List

This document provides a revision list for an economics paper covering topics related to the UK economy including economic growth, inflation, unemployment, balance of payments, aggregate demand, aggregate supply, national income, economic growth and cycles, demand-side policies, and supply-side policies.

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Danilo Zarkovic
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8 views

L6 Economics Paper 2 Revision List

This document provides a revision list for an economics paper covering topics related to the UK economy including economic growth, inflation, unemployment, balance of payments, aggregate demand, aggregate supply, national income, economic growth and cycles, demand-side policies, and supply-side policies.

Uploaded by

Danilo Zarkovic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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L6 Economics Paper 2 Revision List

Theme 2: The UK Economy –


Performance and Policies

Economic Growth
□ Real and nominal GDP
□ GDP and GNI
□ Understanding of Purchasing Power Parities
□ Limitations of GDP when measuring living standards
□ Economic well-being and happiness

Inflation
□ Process of calculating the rate of inflation using CPI
□ Limitations of CPI as a measure of inflation
□ Causes of inflation (demand-pull, cost-push, money supply)
□ Effects of inflation on consumers, firms, the government and workers
□ Disinflation and deflation (causes, effects, policies)

Unemployment
□ Measures of unemployment
□ Under-employment □ Economic inactivity
□ Causes of unemployment
□ Significance of migration and skills for employment & unemployment
□ Effects of unemployment on consumers, firms, workers, the government and society

Balance of payments
□ Trade in goods and services
□ Components of the balance of payments on current account
□ Current account deficits and surpluses
□ Relationships between current account and other macro objectives
Aggregate demand
□ Components of AD: C+I+G+(X-M)
□ AD curve - movements along and shifts of AD curve
□ Consumption - factors affecting
□ Investment - factors affecting
□ Government expenditure (G)
□ Net trade (X-M)

Aggregate supply
□ The characteristics of AS
□ The characteristics of AS
□ The AS curve - distinction between movement along, and a shift of, the AS curve
□ Short-run AS - factors influencing SRAS
□ Long-run AS- factors influencing LRAS
□ Keynesian and classical LRAS curves

National Income
□ Circular flow of income
□ Injections and withdrawals
□ Equilibrium levels of real national output
□ Use of AD/AS diagrams to show how shifts in AD or AS cause changes in real GDP and
prices
□ The multiplier - ratio, process
□ Calculations of the multiplier using the formulae 1/(1-MPC) and 1/MPW, where
MPW=MPS+MPT+MPM

Economic Growth and Cycles


□ Causes of economic growth
□ Output gaps
□ Trade (business) cycle
□ The impact of economic growth - benefits and costs
Demand-side Policies
□ Monetary policy instruments
□ Quantitative Easing
□ Fiscal policy instruments
□ Distinction between government budget (fiscal) deficit and surplus
□ Use of AD/AS diagrams to illustrate demand-side policies
□ Awareness of demand-side policies in the
Great Depression and the Global Financial
Crisis of 2008

Supply-side Policies
□ Distinction between market-based and interventionist methods
□ Use of AD/AS diagrams to illustrate supply-side policies

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