Edexcel B Theme 2: The Wider Economic Environment

Growth and its methods, R&D, the digital economy and small firms

• 2.1.1 Growth
• 2.1.2 Methods of Growth
• 2.1.3 Research and Development (R&D) and Innovation
• 2.1.4 How the Digital Economy Affects Markets and Firms
• 2.1.5 How Small Firms Compete

PED, pricing strategies, non-price competition and YED

• 2.2.1 Price Elasticity of Demand (PED)
• 2.2.2 Competing on Price
• 2.2.3 Types of Non-Price Competition
• 2.2.4 Income Elasticity of Demand (YED)

Productivity, capacity utilisation, lean production and costs

• 2.3.1 Productivity
• 2.3.2 Capacity Utilisation
• 2.3.3 Efficiency and Competitiveness Using Lean Production
• 2.3.4 Impact on Costs and Sales Revenue

Globalisation, types of economy, trade and exchange rates

• 2.4.1 Globalisation
• 2.4.2 Developed, Emerging and Developing Economies
• 2.4.3 International Trade
• 2.4.4 Exchange Rates

The cycle, the circular flow, inflation and unemployment

• 2.5.1 The Economic Cycle
• 2.5.2 Circular Flow of Income, Expenditure and Output
• 2.5.3 Inflation
• 2.5.4 Employment and Unemployment

Objectives, policy instruments and the trade-offs between them

• 2.6.1 Possible Macroeconomic Objectives
• 2.6.2 Policy Instruments
• 2.6.3 Potential Policy Conflicts and Trade-Offs