Mind Map/Spider Diagram

•

What are the main causes of cyclical instability in a country?

•

What supply and demand-side shocks have affected the UK over the last five years?

•

What are the main limitations in using fiscal policy as a policy instrument to smooth cyclical fluctuations in real incomes, output and employment?

•

What are the main supply-side components of an improvement in the trend rate of growth?

•

Explain the importance of innovation as a source of long-term economic growth

•

Evaluate the reasons for the persistent productivity gap between the UK and other leading industrialised economies

•

Analyse how product and labour market reforms might promote an improvement in the competitiveness and macroeconomic performance of UK and other European Union countries

•

What is meant by the term sustainable economic growth? Should governments limit economic growth to protect the environment?

•

To what extent might growth be a source of environmental protection and improvement in the long run?

•

How might we go about measuring differences in living standards between individuals in member states of the European Union?

•

What are the main limitations of national income statistics as a measure of living standards? And what alternative measures of living standards have been developed in recent years?

•

Has globalisation helped to bring down world poverty?

•

Distinguish between demand and supply-side causes of unemployment

•

What are the main characteristics of a flexible labour market? To what extent does the UK have a flexible labour market in place and has it benefited our economic performance?

•

What are the main economic and social costs of unemployment? Can unemployment ever be beneficial for an economy?

•

Explain what is meant by the natural rate of unemployment and by the NAIRU

•

Evaluate the policies likely to be most effective in reducing the natural rate of unemployment

•

Explain the nature of the short run and long run Phillips Curve and the expectations-augmented Phillips Curve. As an economy approaches full-employment, is an acceleration in inflation inevitable?

•

Evaluate the reasons for the improvement in the unemployment-inflation trade off in the British economy over the last decade. What current economic factors might cause that trade-off to worsen?

•

What factors explain the sustained fall in UK unemployment since the early 1990s? And can the British economy reach full-employment?

•

Explain the calculation of the various measures of inflation

•

What is an inflation target? What are the main advantages of having an inflation target?

•

Distinguish between demand and supply-side causes of inflation with particular reference to the British economy. And identify and evaluate the main economic and social costs of a high rate of inflation?

•

What is meant by deflation? What might cause deflation and identify and evaluate the possible economic consequences of a period of deflation

•

Evaluate the contribution that the Monetary Policy Committee has made to the control of inflation and the management of the macro-economy since it was made independent in May 1997

•

Analyse how changes in short term interest rates influences policy objectives such as inflation, unemployment and the balance of payments.

•

Consider the possible relationships between changes in interest rates and movements in the sterling exchange rate.

•

Evaluate the relative merits of indirect taxes versus direct taxes as a means of raising government revenue

•

What factors determine the level of and growth of real government spending on goods and services?

•

Assess the arguments for and against a substantial increase in real government spending on public services such as education, health and transport

•

Analyse the causes and possible consequences of a budget deficit

•

Why is it difficult to forecast future movements in the government’s budget balance with accuracy?

•

How can changes in government fiscal policy be used to manage the growth of aggregate demand?

•

How can changes in taxation and benefits affect labour market incentives?

•

What have been the main changes in the pattern of UK trade in goods and services with the rest of the World over the last ten to twenty years?

•

What is meant by globalisation? What are the main economic threats and opportunities arising from globalisation for the British economy?

•

What is the difference between absolute and comparative advantage? Using the model of comparative advantage, discuss the basis for the possible static and dynamic gains from specialisation and international trade

•

What are the main limitations of the theory of comparative advantage?

•

Evaluate the economic arguments for introducing different forms of trade protection

•

Analyse the possible economic effects of countries opting to increase tariffs and reduce quotas on trade in goods and services

•

What factors explain why the British economy experienced a record trade deficit in goods of £65billion and a current account deficit of nearly 3% of GDP in 2005?

•

Evaluate the economic significance of a country running a persistently large current account deficit on its balance of payments accounts

•

Distinguish between expenditure reducing and expenditure switching policies designed to control the size of a current account deficit on the balance of payments

•

Explain the factors that determine the value of a currency in a floating exchange rate system

•

Analyse the effects of a sustained appreciation of the exchange rate on an open economy such as the UK

•

Evaluate the arguments for choosing a floating rather than a fixed exchange rate system

•

What is meant by international competitiveness? What factors determine the competitiveness of countries inside the European Union?

•

Evaluate the arguments for and against a decision by the UK government to remain outside of the single European currency for the time being.

•

What should be the main objectives of government macroeconomic policy?

•

Evaluate the effectiveness of Labour’s economic policies in terms of their impact on the performance of the UK economy since 1997.