Theme 2 – The UK Economy, Performance and Policies

This theme is included in AS Paper 2 and A-Level Paper 2 and Paper 3 for Edexcel Economics (A). You can find notes for it below:

Measures of Economic Performance

• a) Economic growth
• b) Inflation
• c) Employment and unemployment
• d) Balance of payments

Aggregate Demand

• a) The characteristics of AD
• b) Consumption
• c) Investment
• d) Government expenditure
• e) Net trade (X-M)

Aggregate Supply

• 1. The characteristics of Aggregate Supply (AS)
• 2. Short-run AS
• 3. Long-run AS

National Income

• a) National income
• b) Injections and withdrawals
• c) Equilibrium levels of real national output
• d) The multiplier

Economic Growth

• a) Causes of growth
• b) Output gaps
• c) Trade (business) cycle
• d) The impact of economic growth

Macroeconomic Objectives and Policies

• a) Possible macroeconomic objectives
• b) Demand-side policies
• c) Supply-side policies
• d) Conflicts and trade-offs between objectives and policies