2019 ppqs Flashcards
Describe what is meant by a ‘tariff’.
a tariff is a tax on imports/exports/goods traded internationally (1). It makes imports less attractive/more expensive or makes domestic goods more attractive (DEV) (1)
a tariff is a trade barrier
Explain the benefits of ‘free trade’ to the UK economy.
less/no restrictions on trade (ID) so increased opportunity for international trade/exporting (EXP) (1) This can improve the Balance of Payments position
UK consumers have access to cheaper goods/services (ID) which means their real income increases (EXP) (1) Standards of living increase
UK firms have access to larger markets (ID) so can benefit from economies of scale
Describe reasons for economic growth being a government objective.
to achieve higher standards of living/lift people out of poverty (1)
to increase employment/to reduce transfer payments
to increase tax revenue
Explain why ‘investing more in infrastructure projects’ may result in an even greater increase in National Income.
better infrastructure may improve geographical mobility of labour (ID) which allows vacancies to be filled, increasing output
government may receive more tax revenue (ID) which can be spent on education and training so increase output
investing creates jobs and incomes in the economy (ID) which generates demand/consumer spending (EXP) (1)
o this leads to further investment spending or increased AD/output/consumer spending (DEV) (1)
o this creates further jobs and incomes (DEV) (1)
o this triggers the multiplier effect
Describe what is meant by ‘current spending’
day to day spending
examples include, nurses’ wages,
Explain why the government intervenes to provide
(i) public goods
(ii) merit goods.
to ensure services such as police/street lights are provided (ID) to reduce crime/accidents
to ensure that they are provided to everyone (ID) as the government believes all of society deserve to benefit from them
Define the following terms. • PSNCR
• National debt
government debt/borrowing for the year (1)
when annual government expenditure exceeds revenue/ annual
deficit
accumulated/total/sum of government borrowing over time
Explain ways in which globalisation could help reduce the UK national debt.
UK firms may access new/larger markets (ID) which may result in increased tax revenue from tariffs (EXP) (1)
UK firms may earn more profit (ID) which will increase corporation tax revenue
access to cheap labour (ID) reduces costs for firms so increased profits will generate more corporation tax
Describe ‘further problems’ the NHS may face after losing access to ‘freedom of movement of labour’.
skills shortage (1)
increased spending needed for training (1)
smaller pool of labour to choose from (1)
higher wages needed to attract staff (1) causing strain on other NHS budgets
more pressure on existing staff
Define scarcity.
scarcity is the problem of unlimited wants faced with finite resources (1)
scarcity is a universal problem/affects all economies (1)
scarcity is permanent (1)
scarcity is a relative concept
Explain methods of reducing the impact of scarcity.
discovery of new resources (ID) for example finding new reserves of oil (EXP) (1)
specialisation (ID) in order to improve efficient use of scarce resources
alternative resources can be sought (ID) for example solar/wind energy instead of fossil fuels
Explain the law of diminishing marginal returns.
as output increases the efficiency of production falls (ID) causing higher average costs (EXP) (1). If marginal costs are higher than average costs, then average cost is being pulled up (DEV) (1)
this occurs in the short run only (ID) when one factor of production is fixed (for example, capital
Describe internal and external economies of scale.
in others deck
Explain ways in which fiscal policy measures can be used to reduce the level of
income inequality in the UK.
increase income tax (tax brackets) (ID)
- as this is a progressive tax (EXP) (1)
- as highest earners will pay more (EXP) (1)
- as increased government revenue can be redistributed
(EXP) (1) For example, increased welfare spending
reduce VAT (ID)
- as this is a regressive tax (EXP) (1)
- as lower earners will pay less of their income on tax
increase job seekers’ allowance (ID) which will increase disposable incomes for unemployed
gdp v gnp
measures the value of all goods and services produced by UK firms within the UK. is a measure of the UK’s national output/value of all the goods and services produced in an economy. for example includes Famous Grouse whisky produced in Scotland used by many nations as the main measure of economic activity
vs
measures the value of goods and services produced by UK firms whether in UK or not.includes GDP + net property income from abroad. for example includes Primark producing clothes in Bangladesh. used mainly by the USA as its measure of economic activity
GNP is higher than GDP because it includes GDP (DEV)
