Economics Unit 2 Edexcel - Managing the UK economy Tuesday 19th May 2015 (PM)

GNI (Gross National Income) = Income from residents of that country + any income from abroad

Correct me if I'm wrong, but it is mainly GDP, HDI, etc that is asked for when related to standards of living. I don't think it will ever refer directly to GNI

It's simply a record of international payments that a country makes over the course of a year. It is a macroeconomic objective to have an equilibrium in the balance of payments, so basically you want your records to be balanced.

For AS all you need to know is the current account which is the trade in goods, services, investment and transfers.

A current account deficit is when more money is flowing out of the country than flowing in. It can be caused by the currency being too strong, meaning that exports are more expensive and imports are cheaper, so you import more and export less which creates a disequilibrium. High wage costs and high levels of growth can cause a deficit as well because people may have more disposable income that they want to spend on imported goods, meaning that the country imports more.

A current account surplus is more money flowing in to the country than flowing out. This can be caused by the opposite of what causes a deficit. So weaker currency, low wages and low growth.

Evaluation can be that a current account surplus isn't always beneficial because it can cause inflationary measures. This is the conflict that occurs between BoP and Inflation because to sustain inflation the MPC may increase interest rates which could cause exchange rates to go up, making exports more expensive and imports cheaper. BUT the UK has a marginal propensity to import due to our lack of raw materials etc.

I hope this made sense!

Haha yeh I am, thanks so much! I'm sure you'll smash this too! Best of luck haha

Any detailed explanation how inflation could lead to unemployment?
Thank you!

aww thank you! kinda need all the luck i need :' good luck to you too! let me know how u find it after da exam tomorrow!

Any detailed explanation how inflation could lead to unemployment?
Thank you!

how would you describe supply side policies in a 30 marker, we werent really taught it well

To improve long term productive potential of the economy? Privatisation, Investment in technologies, Investment in education, Investment in health, subsidies to SMEs, reducing immigration laws, reducing minimum working age, increasing retirement age, reducing trade/worker union powers... Anything that basically affects quality and quantity of factors of production which will increase productive potential permanently (importantly NOT costs of factors of production).

Evaluations: Privatisation could lead to monopolies and if all public assets are sold to one firm, giving no increase in quality/quantity of goods and services, all of the investments you can talk about opportunity cost of government expenditure or increasing budget deficit/national debt.
Immigration I'd stick to magnitude of new workers coming in and whether or not they are skilled or not so you can talk about how/where they would contribute to the economy.
Final 3, dubious human rights, lowering living standards as people get tired more easily working longer hours/child labour is bad etc etc.

Not sure if this is what you were looking for but these are the general supply side polices we were taught/a couple I came up with now

how would you describe supply side policies in a 30 marker, we werent really taught it well

To improve long term productive potential of the economy? Privatisation, Investment in technologies, Investment in education, Investment in health, subsidies to SMEs, reducing immigration laws, reducing minimum working age, increasing retirement age, reducing trade/worker union powers... Anything that basically affects quality and quantity of factors of production which will increase productive potential permanently (importantly NOT costs of factors of production).

Evaluations: Privatisation could lead to monopolies and if all public assets are sold to one firm, giving no increase in quality/quantity of goods and services, all of the investments you can talk about opportunity cost of government expenditure or increasing budget deficit/national debt.
Immigration I'd stick to magnitude of new workers coming in and whether or not they are skilled or not so you can talk about how/where they would contribute to the economy.
Final 3, dubious human rights, lowering living standards as people get tired more easily working longer hours/child labour is bad etc etc.

Not sure if this is what you were looking for but these are the general supply side polices we were taught/a couple I came up with now

Could some please explain the possible trade off between inflation and the equilibrium on the balance of payments please? It is mentioned in the spec

You are actually a legend at economics

Sweet cheers