Macroeconomics Year 1
Revision pack
CONTENTS
1
,Key terms………………………………………………………….…………..6-13
Formula………………………………………………………………….……….14
Diagrams……………………………………………………………………..15-26
Macroeconomic objectives and why they conflict…………..…………...27-29
Lead and lag indicators and index numbers……………………………..30-34
How the macroeconomy works in summary…………………….…………...35
Aggregate demand: consumption and saving………………….………...36-38
Aggregate demand: investment and the accelerator………………...….39-40
Aggregate demand: the multiplier effect………………………....……….41-43
Short run aggregate supply………………………………….……………..44-45
Long run aggregate supply…………………………………….…………..46-47
Aggregate demand and supply: putting it all together…………………..48-49
The economic cycle and output gaps……………………………...…….50 - 53
The benefits and costs of economic growth………………………………….54
Types and causes of unemployment……………………………………..55-58
Methods of measuring unemployment……………………………………….59
Negative consequences of unemployment………………………………….60
Strategies for reducing unemployment………………………….…………...61
Types of inflation and the quantity theory of money…………..………..62-64
The impact of inflationary expectations……………………………………...65
The negative impact of inflation……………………………………………...66
Deflation…………………………………………………………………….67-68
2
,The current account components and issues with a deficit…………..69-70
Issues with a current account surplus……………………………………...71
Monetary policy: interest rates…………………………………………..72-74
Monetary policy: quantitative easing……………………………………….75
Fiscal policy…………………………………………………………………...76
Fiscal policy as a demand side policy……………………………………..77
Crowding out…………………………………………….…………………...78
Fiscal policy as a supply side policy……………………………………....79
Budget deficit and public borrowing…………………………………..80 - 81
Reasons for taxation………………………………………………………...81
Principles of taxation………………………………………………………..82
Government spending……………………………………………………...83
Types of tax………………………………………………………………….84
Supply side: interventionist and non interventionist…………………….85
Trickle down theory and the Laffer curve………………………………..86
The backward sloping supply curve……………………………………...87
3
, 4
Revision pack
CONTENTS
1
,Key terms………………………………………………………….…………..6-13
Formula………………………………………………………………….……….14
Diagrams……………………………………………………………………..15-26
Macroeconomic objectives and why they conflict…………..…………...27-29
Lead and lag indicators and index numbers……………………………..30-34
How the macroeconomy works in summary…………………….…………...35
Aggregate demand: consumption and saving………………….………...36-38
Aggregate demand: investment and the accelerator………………...….39-40
Aggregate demand: the multiplier effect………………………....……….41-43
Short run aggregate supply………………………………….……………..44-45
Long run aggregate supply…………………………………….…………..46-47
Aggregate demand and supply: putting it all together…………………..48-49
The economic cycle and output gaps……………………………...…….50 - 53
The benefits and costs of economic growth………………………………….54
Types and causes of unemployment……………………………………..55-58
Methods of measuring unemployment……………………………………….59
Negative consequences of unemployment………………………………….60
Strategies for reducing unemployment………………………….…………...61
Types of inflation and the quantity theory of money…………..………..62-64
The impact of inflationary expectations……………………………………...65
The negative impact of inflation……………………………………………...66
Deflation…………………………………………………………………….67-68
2
,The current account components and issues with a deficit…………..69-70
Issues with a current account surplus……………………………………...71
Monetary policy: interest rates…………………………………………..72-74
Monetary policy: quantitative easing……………………………………….75
Fiscal policy…………………………………………………………………...76
Fiscal policy as a demand side policy……………………………………..77
Crowding out…………………………………………….…………………...78
Fiscal policy as a supply side policy……………………………………....79
Budget deficit and public borrowing…………………………………..80 - 81
Reasons for taxation………………………………………………………...81
Principles of taxation………………………………………………………..82
Government spending……………………………………………………...83
Types of tax………………………………………………………………….84
Supply side: interventionist and non interventionist…………………….85
Trickle down theory and the Laffer curve………………………………..86
The backward sloping supply curve……………………………………...87
3
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