Edexcel Theme 2: The UK Economy — Performance and Policies

Theme 2 Topics

• 2.1 Measures of Economic Performance

  +

  Economic growth, inflation, employment/unemployment, balance of payments

  • 2.1.1 Economic Growth
  • 2.1.2 Inflation
  • 2.1.3 Employment and Unemployment
  • 2.1.4 Balance of Payments

• 2.2 Aggregate Demand (AD)

  +

  Components of AD, AD curve, shifts in AD

  • 2.2.1 The Characteristics of AD
  • 2.2.2 Consumption (C)
  • 2.2.3 Investment (I)
  • 2.2.4 Government Expenditure (G)
  • 2.2.5 Net Trade (X-M)

• 2.3 Aggregate Supply

  +

  Short-run AS, long-run AS, factors influencing AS

  • 2.3.1 The Characteristics of AS
  • 2.3.2 Short-Run AS
  • 2.3.3 Long-Run AS

• 2.4 National Income

  +

  Circular flow of income, equilibrium, multiplier effect

  • 2.4.1 National Income
  • 2.4.2 Injections and Withdrawals
  • 2.4.3 Equilibrium Levels of Real National Output
  • 2.4.4 The Multiplier

• 2.5 Economic Growth

  +

  Causes, consequences, sustainability

  • 2.5.1 Causes of Growth
  • 2.5.2 Output Gaps
  • 2.5.3 Trade (Business) Cycles
  • 2.5.4 The Impact of Economic Growth

• 2.6 Macroeconomic Objectives and Policies

  +

  Policy conflicts, demand-side policies, supply-side policies

  • 2.6.1 Possible Macroeconomic Objectives
  • 2.6.2 Demand-Side Policies
  • 2.6.3 Supply-Side Policies
  • 2.6.4 Conflicts and Trade-Offs between Objectives and Polciies