Macro revision checklist

Personalised Learning Checklist

Edexcel Year 1 A-Level & AS Economics A
Quantitative Methods
Quantitative Methods

Review quantitative skills

Develop an understanding of index numbers in different contexts (e.
g. production, productivity, unit labour cost, etc.)
Measures of Economic Performance
Economic Growth
Understand rates of change of real Gross Domestic Product (GDP)
as a measure of economic growth
Understand the distinction between:
Real and nominal
Total and per capita
Value and volume
Understand other national income measures:
Gross National Product (GNP)
Gross National Income (GNI)
Understand Purchasing Power Parities (PPPs) and the use of PPP-
adjusted figures in international comparisons
Understand the limitations of using GDP to compare living standards
between countries and over time
Inflation
Display an understanding of:
Inflation
Deflation
Disinflation
Be able to use the process of calculating the rate of inflation in the
UK using the Consumer Prices Index (CPI)
Understand the limitations of CPI in measuring the rate of inflation
Understand the Retail Prices Index (RPI) as an alternative measure
of the rate of inflation
Explain the causes of inflation:
Demand pull
Cost push
Growth of the money supply
Understand the effects of inflation on consumers, firms, the
government
Employmentand and workers
unemployment
Understand the measures of unemployment:
The claimant count

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Macro revision checklist

The International Labour Organisation (ILO) and the UK Labour

Force Survey
The distinction between unemployment and under-employment
Understand the significance of changes in the rates of:
Employment
Unemployment
Inactivity
Understand the causes of unemployment:
Structural unemployment
Frictional unemployment
Seasonal unemployment
Demand deficiency and cyclical unemployment
Real wage inflexibility
Explain the significance of migration and skills for employment and
unemployment
Understand the effects of unemployment on consumers, firms,
workers, the government and society
Balance of Payments
Understand the components of the balance of payments, with
particular reference to the current account, and the balance of trade
in goods and services
Explain current account deficits and surpluses
Understand the relationship between current account imbalances and
other macroeconomic objectives.
Explain the interconnectedness of economies through international
trade
Aggregate Demand
Characteristics of AD
Understand the components of AD: C+I+G+(X-M)
Explain the relative importance of the components of AD
Understand the AD curve
Understand the distinction between a movement along, and a shift of,
the AD curve
Consumption (C)
Understand disposable income and its influence on consumer
spending
Display an understanding of the relationship between savings and
consumption
Explain other influences on consumer spending:
Interest rates
Consumer confidence
Wealth effects
Investment (I)
Understand the distinction between gross and net investment

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Macro revision checklist

Understand the influences on investment:

The rate of economic growth
Business expectations and confidence
Keynes and ‘animal spirits’
Demand for exports
Interest rates
Access to credit
The influence of government and regulations
Government Expenditure (G)
Explain the main influences on government expenditure:
The trade cycle
Fiscal policy
Net trade (X-M)
Understand the main influences on the (net) trade balance:
Real income
Exchange rates
State of the world economy
Degree of protectionism
Non-price factors
Aggregate Supply
The characteristics of AS
Understand the AS curve
Understand the distinction between movement along, and a shift of,
the AS curve
Explain the relationship between short-run AS and long-run AS
Short run Aggrate Supply
Understand the factors influencing short-run AS:
Changes in costs of raw materials and energy
Changes in exchange rates
Changes in tax rates
Long-Run Aggregate Supply
Understand the different shapes of the long-run AS curve:
Keynesian
Classical
Explain the factors influencing long-run AS:
Technological advances
Changes in relative productivity
Changes in education and skills
Changes in government regulations
Demographic changes and migration
Competition policy
National Income

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Macro revision checklist

National Income
Explain the circular flow of income
Understand the distinction between income and wealth
Injections and withdrawals
Explain the impact of injections into, and withdrawals from, the
circular flow of income
Equilibrium level of real national output
Understand the concept of equilibrium real national output
The use of AD/AS diagrams to show how shifts in AD or AS cause
changes in the equilibrium price level and real national output
The multiplier
Understand the multiplier ratio
Understand the multiplier process
Explain the effects of the economy on the multiplier
Understand marginal propensities and their effects on the multiplier:
The marginal propensity to consume (MPC)
The marginal propensity to save (MPS)
The marginal propensity to tax (MPT)
The marginal propensity to import (MPM)
Be able to calculate the multiplier using the formulae 1/(1-MPC) and
1/MPW, where MPW=MPS+MPT+MPM
Explain the significance of the multiplier to shifts in AD
Economic Growth
Causes of growth
Understand the factors which could cause economic growth
Understand the distinction between actual and potential growth
Explain the importance of international trade for (export-led)
economic growth
Output gaps
Understand the distinction between actual growth rates and long-term
trends in growth rates
Display an understanding of positive and negative output gaps and
the difficulties of measurement
Explain the use of an AD/AS diagram to illustrate an output gap (level
of spare capacity) in an economy
Trade (business) cycle
Display an understanding of the trade (business) cycle
Explain the characteristics of a boom
Explain the characteristics of a recession
The impact of economic growth
Understand the benefits and costs of economic growth and the
impact on:
Consumers

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Macro revision checklist

Firms
The government
Current and future living standards
Macroeconomic Objectives and Policies
Possible macroeconomic objectives
Explain economic growth
Explain low unemployment
Explain low and stable rate of inflation
Explain the balance of payments equilibrium on current account
Explain balanced government budget
Explain protection of the environment
Explain greater income equality
Demand-side policies
Understand the distinction between monetary and fiscal policy
Understand monetary policy instruments:
Interest rates
Asset purchases to increase the money supply (quantitative easing)
Understand fiscal policy instruments:
Government spending and taxation
Explain the distinction between government budget (fiscal) deficit and
surplus
Explain the distinction between, and examples of, direct and indirect
taxation
Use AD/AS diagrams to illustrate demand-side policies
Understand the role of the Bank of England:
The role and operation of the Bank of England's Monetary Policy
Committee
Supply-side policies
Understand the distinction between market-based and interventionist
methods
Explain market-based and interventionist policies:
To increase incentives
To promote competition
To reform the labour market
To improve skills and quality of the labour force
To improve infrastructure
Use AD/AS diagrams to illustrate supply-side policies
Explain the strengths and weaknesses of supply-side policies
Conflicts and trade-offs between objectives and policies
Explain potential conflicts and trade-offs between the macroeconomic
objectives
Understand the short-run Phillips curve
Explain potential policy conflicts and trade-offs