A level economics edexcel

Globalisation: The process by which the world is becoming a single economy Sustainable Development: Development that meets the needs of current generations without compromising the needs of future generations Transfer Pricing: An account technique used by TNC's for reducing taxes on profits. By buying internally to ensure losses in high tax countries and profits declared in low tax regions. Capital Markets: Financial Markets which provide long-term borrowing and lending...

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3 pages

Written in 2023/2024

Grade A

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Globalisation Refers to the increasing integration and interdependence of the World's national economies into a single international market. It involves the free trade of goods and services, the free movement of capital and labour and the free interchange of technology and intellectual capital Developed economy An economy that that is economically developed and its population has a high GDP per capita e.g USA, Australia Developing economy An economy that that is less economical...

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8 pages

Written in 2023/2024

Grade A

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GDP Gross domestic product measures the value of goods and services produced in an economy, it also measures national income/national expenditure Nominal GDP Measures the monetary value of GDP (this may include the effects of inflation) Real GDP Measures GDP adjusted for the effects of inflation, it measures the actual purchasing power of consumers in an economy GDP per capita Is the level of GDP divided by population The volume of goods and services Is the quant...

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6 pages

Written in 2023/2024

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Economic Growth This is an increase in real or potential GDP. This will lead to higher living standards and high levels of employment. GDP Gross Domestic Product Gross Domestic Product This is the value of all the goods and services produced in an economy in a year. Real Gross Domestic Product This is measured at constant prices adjusted for inflation. Nominal Gross Domestic Product This is measures at current prices including inflation. Total Gross Domest...

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11 pages

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Gross Domestic Product (GDP) [alternative definition] The total value of all finished goods and services produced within an economy's borders in a given period of time Standards of Living (SoL) The quality of life enjoyed by people. This comprises material aspects (i.e. how much people are getting of the things they want and need), and non-material aspects (i.e. how healthy, educated, and happy they are) Short-run economic growth The change in the actual value of GDP measured i...

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2 pages

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Actual economic growth The rate growth of GDP in a period Aggregate demand The total amount of spending on goods and services produced in an economy during a period of time Aggregate demand curve The relationship between the AD and the overall price level; it shoes planned expenditure at any given possible overall price level Automatic stabilisers Effects by which government expenditure adjusts to offset the effects of recession and boom without the need for active inter...

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8 pages

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Balance of Payments (BoP) A record of all of the transactions between one economy (country) and all other economies (countries) over a given period of time. It is an account of all of the money flows into and out of an economy . The two halves of Balance of Payments 'Current Account' and 'Capital and Financial Accounts' Current account The part of the BoP where payments relating to 1) Trade in Goods 2) Trade in Services 3) Net Income, and... 4) Current Transfers are reco...

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2 pages

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Price Level The average of the prices of all goods and services within the economy. Other names for Price Level 'General Price Level' and 'Average Price Level' Inflation A sustained INCREASE in the price level. This means that prices for a range of goods and services are RISING, which means that the VALUE OF MONEY is FALLING in relation to the goods and services it is used to buy. Deflation A sustained DECREASE in the price level. This means that prices for a range o...

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8 pages

Written in 2023/2024

Grade A+

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What are the four assumptions of micro economics? Rational Consumers, perfectly competitive market, average consumer, ceteris paribus What is a positive statement? a statement that can be tested and validated What is a normative statement? an opinion, a value judgement What is the economic problem? Resources are scarce, however wants are unlimited. There are finite resources so goods/services need to be allocated efficiently. What is opportunity cost? Cost of the next be...

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2 pages

Written in 2023/2024

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Macroeconomics The study of the economy as a whole, including inflation, growth and unemployment. Aggregate demand The total amount of goods / services demanded in an economy at a given time at a given price level. Aggregate supply Total amount of goods and services supplied in the economy at a given time at given price level. What is GDP? Gross Domestic Product = the total value of all goods and services produced in an economy in a given time period. What does % ...

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26 pages

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1.1.1 - The Economic Problem The basic economic problem Scarcity - unlimited wants and finite resources, so choices have to be made. Resources have to be used and distributed optimally. Scarcity refers to the shortage of resources in relation to the quantity of human wants. Scarcity Example For example, if you only have £1 and you go to a shop, you can buy either the chocolate bar or the packet of crisps. The scarcity of the resource (the money) means a choice has to be made bet...

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6 pages

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Globalisation Increased interdependence between countries and the rapid rate of change it brings about Factors contributing to globalisation (5) Improvements in infrastructure (Quicker, more reliable and cheaper methods enabling production) Improvements in IT and communication (Allows global operations) Trade Liberalisation (Reduces protectionism and makes trade cheaper - specialisation) International financial markets (Raising money and transferring it globally) TNCs (Low p...

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31 pages

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Factors influencing demand for labour Demand for final product - if rise in output > increase in productivity Relative productivity of labour to capital - substitution effect £3,000 subsidy for hiring unemployed 18-24 y.o. = half UK's youth minimum wage Factors influencing supply of labour Cost of living Cost of gaining skills UK uni fees capped at £9,250 per year Number of workers UK raises state pension age from 67 to 68 Market failures in labour markets Geograph...

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23 pages

Written in 2023/2024

Grade A+

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Production Possibility Frontier Supply and demand diagram showing equilibrium Supply and demand surplus Increase in demand Decrease in demand Increase in supply Decrease in supply Consumer surplus Producer surplus Inelastic demand Elastic demand Unitary elastic demand Perfectly elastic demand Perfectly inelastic demand Inelastic supply Elastic supply Substitutes diagram Ad valorem tax Tax diagram Subsi...

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11 pages

Written in 2023/2024

Grade A+

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Macroeconomics The study of the economy as a whole, including inflation, growth and unemployment. Aggregate demand The total of all demands or expenditures in the economy at any given price. Aggregate demand curve Shows the relationship between the price level and equilibrium national income. As the price level rises the equilibrium level of national income falls. Animal spirits Business confidence: the mood of managers and owners of firms about the future of their indus...

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33 pages

Written in 2023/2024

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Microeconomics The study of individuals, markets, firms and industries. Focuses on the details of small-scale components within the economy. Macroeconomics The study of whole economic systems: national economies and the global economy. Looks at the whole economy on a large scale. Standards of Living (SoL) The quality of life enjoyed by people. This comprises material aspects (i.e. how much people are getting of the things they want and need), and non-material aspects (i.e. how healt...

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5 pages

Written in 2023/2024

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scarce resources resources that are limited or finite opportunity cost the value of the next best alternative forgone economic problem resources are scarce but wants are unlimited production possibility frontier a diagram that shows all the combinations of two goods that can be produced when all factors of production are being used normative statement an economic statement based on a value judgement and therefore cannot be tested positive statement an eco...

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10 pages

Written in 2023/2024

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Backwards vertical integration a joining together into one firm of two or more firms where the purchaser merges with/takes over one or more of its suppliers Conglomerate integration a joining together into one firm of two or more firms producing unrelated products Demerger when a firm splits into two or more independent businesses Divorce of ownership from control when managers and directors of a business are different from the owners of a business (the shareholders) ...

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12 pages

Written in 2023/2024

Grade A

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Economics The study of the allocation of scarce resources. Economic Goods Resources that are scarce. Short Run A time period where at least one factor of production is fixed. Long Run A time period where all factors of production are variable. Productivity The output per unit of input. The Economic Problem Resources are scarce but wants are infinite. Scarcity The world's resources are limited, there are only limited amounts of land, water, oil, f...

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23 pages

Written in 2023/2024

Grade A+

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Economics The study of the allocation of scarce resources. Economic Goods Resources that are scarce. Short Run A time period where at least one factor of production is fixed. Long Run A time period where all factors of production are variable. Productivity The output per unit of input. The Economic Problem Resources are scarce but wants are infinite. Scarcity The world's resources are limited, there are only limited amounts of land, water, oil, f...

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55 pages

Written in 2023/2024

Grade A+

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