1
Macroeconomics
Year 2
, 2
Contents
Key
terms………………………………………………………………..…..….…...5 - 12
Diagrams and formula……………………………………………….….……….13 - 19
Characteristics and history of money………………………….…..….……...20 - 21
The money supply and Goodhart’s law………………………….…..…………….22
A bank’s balance sheet and profitability vs liquidity…………….………...23 - 25
Financial markets……………………………………………….………..…………….26
The inverse relationship between bond prices and interest rates…………….27
The role of the stock market and commercial vs investment banks……..…..28
Reasons banks fail………………………………………………………………….....29
How banks create money…………………………………………...…………….30-31
The role of the Bank of England……………………………………...………..31 - 32
Limitations of interest rate based monetary policy……………………………...33
The monetary policy committee………………………………………...…………..34
Quantitative easing recap………………………………………………….………....35
The funding for lending and help to buy schemes………………….…………...36
Financial regulation………………………………………………………….…….37-38
Economic growth and development……………………………………..………...39
Unemployment………………………………………………………………….…..40-41
Inflation…………………………………………………………………………….…….42
The quantity theory of money…………………………………………………..…...43
The Phillip’s curve……………………………………………………………...….44-45
Fiscal policy - a recap…………………………………………………………….…...46
Arguments for and against fiscal policy to manage demand………….……….47
The difference between a budget deficit and debt………………….……..……..47
Types of deficit…………………………………………………………………….…...48
, 3
When and how is fiscal policy used in the UK…………………………………...48
The impact of progressive, regressive and proportional taxation….………...49
Automatic stabilisers……………………………………………………………...…..50
The old and new fiscal rules……………………………………………………………….51
Arguments for and against the use of fiscal policy…………………………………...52
Supply side policy - a recap………………………………………………………….……53
Benefits and drawbacks of supply side policy……………………………….………..54
Globalisation………………………………………………………………………………….55
Impact on developing countries…………………………………………………………..56
Impact on developed countries…………………………………………………………...57
Absolute advantage………………………………………………………………………....58
Comparative advantage………………………………………………………………....59-60
Arguments for protectionism……………………………………………………………...61
Types of protectionism………………………………………………………………...……62
Arguments against protectionism………………………………………………………...62
Changing patterns of
trade………………………………………………………………....63
Types of economic integration…………………………………………………………….64
Results of trading blocs…………………………………………………………………….65
The World Trade Organisation…………………………………………………………....65
The balance of payments…………………………………………………………………..66
How to cure a balance of payments deficit……………………………………………..67
The Marshall Lerner Condition……………………………………………………...…68-69
The J curve…………………………………………………………………………………....70
Export led growth…………………………………………………………………………….71
How can we cure a surplus………………………………………………………………...72
The UK balance of payments………………………………………………………......72-73
Exchange rate systems………………………………………………………………….….73
Advantages and disadvantages of different types of exchange rate system....74-76
The advantages and disadvantages of a currency union…………………….....77 - 78
, 4
Economic development……………………………………………………………………..79
Indicators of development……………………………………………………………...79-80
The Human Development Index…………………………………………………….....80-81
Alternatives to the HDI - the ISEW………………………………………………………...82
Barriers to economic development………………………………………………..….83-84
Policies to promote economic development…………………………………………...85
Should developed countries provide aid?............................................................86-87
Macroeconomics
Year 2
, 2
Contents
Key
terms………………………………………………………………..…..….…...5 - 12
Diagrams and formula……………………………………………….….……….13 - 19
Characteristics and history of money………………………….…..….……...20 - 21
The money supply and Goodhart’s law………………………….…..…………….22
A bank’s balance sheet and profitability vs liquidity…………….………...23 - 25
Financial markets……………………………………………….………..…………….26
The inverse relationship between bond prices and interest rates…………….27
The role of the stock market and commercial vs investment banks……..…..28
Reasons banks fail………………………………………………………………….....29
How banks create money…………………………………………...…………….30-31
The role of the Bank of England……………………………………...………..31 - 32
Limitations of interest rate based monetary policy……………………………...33
The monetary policy committee………………………………………...…………..34
Quantitative easing recap………………………………………………….………....35
The funding for lending and help to buy schemes………………….…………...36
Financial regulation………………………………………………………….…….37-38
Economic growth and development……………………………………..………...39
Unemployment………………………………………………………………….…..40-41
Inflation…………………………………………………………………………….…….42
The quantity theory of money…………………………………………………..…...43
The Phillip’s curve……………………………………………………………...….44-45
Fiscal policy - a recap…………………………………………………………….…...46
Arguments for and against fiscal policy to manage demand………….……….47
The difference between a budget deficit and debt………………….……..……..47
Types of deficit…………………………………………………………………….…...48
, 3
When and how is fiscal policy used in the UK…………………………………...48
The impact of progressive, regressive and proportional taxation….………...49
Automatic stabilisers……………………………………………………………...…..50
The old and new fiscal rules……………………………………………………………….51
Arguments for and against the use of fiscal policy…………………………………...52
Supply side policy - a recap………………………………………………………….……53
Benefits and drawbacks of supply side policy……………………………….………..54
Globalisation………………………………………………………………………………….55
Impact on developing countries…………………………………………………………..56
Impact on developed countries…………………………………………………………...57
Absolute advantage………………………………………………………………………....58
Comparative advantage………………………………………………………………....59-60
Arguments for protectionism……………………………………………………………...61
Types of protectionism………………………………………………………………...……62
Arguments against protectionism………………………………………………………...62
Changing patterns of
trade………………………………………………………………....63
Types of economic integration…………………………………………………………….64
Results of trading blocs…………………………………………………………………….65
The World Trade Organisation…………………………………………………………....65
The balance of payments…………………………………………………………………..66
How to cure a balance of payments deficit……………………………………………..67
The Marshall Lerner Condition……………………………………………………...…68-69
The J curve…………………………………………………………………………………....70
Export led growth…………………………………………………………………………….71
How can we cure a surplus………………………………………………………………...72
The UK balance of payments………………………………………………………......72-73
Exchange rate systems………………………………………………………………….….73
Advantages and disadvantages of different types of exchange rate system....74-76
The advantages and disadvantages of a currency union…………………….....77 - 78
, 4
Economic development……………………………………………………………………..79
Indicators of development……………………………………………………………...79-80
The Human Development Index…………………………………………………….....80-81
Alternatives to the HDI - the ISEW………………………………………………………...82
Barriers to economic development………………………………………………..….83-84
Policies to promote economic development…………………………………………...85
Should developed countries provide aid?............................................................86-87
