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AQA A2 Economics Unit 6 Macroeconomy Advice

Unit 6 Macroeconomics Paper (AQA)

50 revision questions to consider as you prepare for this synoptic paper

You'll find many of the answers to these key questions in our series of new, free A2 economics revision briefings at
http://www.tutor2u.net/forum/topic.asp?TOPIC_ID=9935

Jim

1. What are the main causes of cyclical instability in a country?
2. What supply and demand side shocks have affected the UK over the last five years?
3. What are the limitations in a government opting to use fiscal policy to smooth cyclical fluctuations in real incomes, output and employment?
4. What are the main supply-side components of an improvement in the trend rate of growth?
5. Explain the importance of innovation as a source of long-term economic growth
6. Evaluate the reasons for the productivity gap between the UK and other industrialised economies
7. Analyse how product and labour market reforms might promote an improvement in the long run economic performance of UK and other European Union countries
8. What is meant by the term sustainable economic growth?
9. How might economic growth bring about environmental improvement?
10. How might we measure differences in living standards between individuals within the EU?
11. What are the main limitations of national income statistics as a measure of living standards?
12. What alternative measures of living standards have been developed in recent years?
13. Distinguish between demand and supply-side causes of unemployment
14. What are the main characteristics of a flexible labour market? To what extent does the UK have a flexible labour market in place?
15. What are the main economic and social costs of unemployment?
16. Explain what is meant by the natural rate of unemployment and by the NAIRU
17. Evaluate the policies likely to be most effective in reducing the natural rate of unemployment
18. Explain the nature of the short run and long run Phillips Curve and the expectations-augmented Phillips Curve
19. Evaluate the reasons for the improvement in the unemployment-inflation trade-off in the British economy over the last decade
20. What factors explain the sustained fall in UK unemployment since 1993?
21. Can the British economy reach full-employment?
22. What is an inflation target? What are the main advantages of having an inflation target?
23. Distinguish between demand and supply-side causes of inflation with reference to the UK economy
24. Identify and evaluate the main economic and social costs of a high rate of inflation?
25. What is meant by deflation? What might cause deflation and identify and evaluate the possible economic consequences of a period of deflation
26. 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
27. Analyse how changes in short term interest rates influences policy objectives such as inflation, unemployment and the balance of payments
28. Consider the possible relationships between changes in interest rates and movements in the sterling exchange rate
29. Evaluate the relative merits of indirect taxes versus direct taxes as a means of raising government revenue
30. What factors determine the level of and growth of real government spending on goods and services?
31. Assess the arguments for and against a substantial increase in government spending on public services such as education, health and transport
32. Analyse the causes and possible consequences of a budget deficit. Why is the budget deficit so hard to forecast accurately from year to year?
33. How can changes in government fiscal policy be used to manage the growth of aggregate demand?
34. 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?
35. What is meant by globalisation? What are the main threats and opportunities arising from globalisation for the British economy?
36. Using the model of comparative advantage, discuss the basis for the possible static and dynamic gains from specialisation and international trade
37. What are the main limitations of the theory of comparative advantage?
38. Evaluate the economic arguments for introducing different forms of trade protection
39. Analyse the economic effects of tariffs and quotas on trade in goods and services
40. What factors explain why the British economy experienced a record trade deficit in goods of £46 billion and a current account deficit in excess of 2% of GDP in 2003?
41. Evaluate the economic significance of a country running a persistently large current account deficit on its balance of payments accounts
42. Distinguish between expenditure reducing and expenditure switching policies designed to control the size of a current account deficit on the balance of payments
43. Explain the factors that determine the value of a currency in a floating exchange rate system
44. Analyse the effects of a sustained appreciation of the exchange rate on an economy such as the UK
45. Evaluate the arguments for choosing a floating rather than a fixed exchange rate system
46. What is meant by international competitiveness? What factors determine the competitiveness of countries inside the European Union?
47. Evaluate the arguments for and against a decision by the UK government to remain outside of the single European currency for the time being.
48. What should be the main objectives of government macroeconomic policy? Can all policy objectives be achieved simultaneously?
49. Why has the British economy out-performed the Euro Zone in recent years?
50. Evaluate the opportunities and threats for the UK economy of the rapid growth of the Chinese and Indian economies