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economics (alevel) > econ dal workshop > Flashcards

econ dal workshop Flashcards

1
Q

what is the memory device used to remember non price factors for demand

A

Population
Advertising
Substitute
Income
Fashion/interests
Interest rates
Complementary good

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2
Q

what is the memory device used to remember non price factors for supply

A

Productivity
Indirect tax
Number of firms in market
Technology
Subsidy
Weather
Cost of production

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3
Q

what is the memory device for the price mechanism

A

Signals for more/lkess resources
Incentive to decrease/increase output
Rations via less/more demand
Allocative efficiency

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4
Q

why is (Q,P) = Allocative Efficiency(2)

A
  • maximising of society surplus
  • maximising of net social benefit
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5
Q

what are 3 characteristics of free market forces

A
  • no surpluses/ shortages
  • low prices , high quality/choice
  • no gov. failure
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6
Q

what is market failure

A

when the allocation of resources does not maximise social benefit

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7
Q

what is government failure

A

when costs of intervention outweigh the benefits, worsening resource allocation

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8
Q

what are the costs of government intervention

A
  • costs
  • unintended consequences
  • imperfect information
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9
Q

what is the UK inflation rate

A

3.4%

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10
Q

what is the UK unemplyment rate

A

3.9%

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11
Q

what is UK’s annual wage growth

A

5.6%

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12
Q

what is the UK current account deficit as % of GDP

A

2.5%

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13
Q

what is the goal of macroeconomic objectives

A

to be achieved at the same time

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14
Q

how to show the multiplier effect on a graph

A

show further AD increase(AD1 -> AD2 -> AD3)

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15
Q

what is the formula for the multiplier effect

A

1/mpw

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16
Q

what are the determinants of the value of the multiplier

A
  • savings
  • imports
  • taxation
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17
Q

what is economic growth

A

an increase in real GDP via an increase in AD or LRAS

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18
Q

how to measure capital

A

interest

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19
Q

what are the drawbacks of using GDP to measure economic growth

A
  • doesnt take into account informal activity
  • environmental costs
  • income inequality
  • remittance is not recorded
20
Q

what are the benefits of economic growth(4)

A
  • higher incomes
  • jobs(less unempoyment -> derived demand)
  • higher profits
  • fiscal dividends
21
Q

what are the costs of economic growth(4)

A
  • inflatin(demand pull)
  • income inequality
  • negative externalities
  • current account deficit
22
Q

what is unemplyment

A
  • working age
  • willing and able to work
  • actively seeking
  • do not have a job
23
Q

what are disadvantages of using the labour force survey

A
  • smapling errors(small amounts of people that are surveyed)
  • costs(£)
  • inactive groups(early retired)
  • underemployed(1 million ppl on zero hour contracts)
24
Q

what is the percentage of 16-64 that are inactive

A

21.8%

25
Q

what is structural unemplyment

A

immobility of labour due to long term change of structure of an industry

26
Q

what are the reasons for occupational immobility

A
  • technology advances( AI, amazon fresh)
  • poor education system
  • loss of comparative advantage( country less competitive)
27
Q

what 3 components make up monetary policy

A
  • exchange rate
  • money supply(QE)
  • interest rates
28
Q

what are the aims of an expansionary demand side policy

A
  • boost AD
  • reduce unemployment
  • increase inflation
29
Q

what are the aims of a contractionary demand side policy

A
  • reduce inflation
  • improve Gov. finances
  • reduce debt, promote saving
30
Q

what happened during the Lizz Truss takeover

A
  • broke the bond market(bond yield went up)
31
Q

what is the Ricardian Equivalence

A

when the income tax cut is saved rather than spent, in preparation for future tax rises

32
Q

what is the difference between interventionist and market based approach

A
  • interventionist = more gov. intervention
  • market based = reduces role of gov.
33
Q

what is the crowding out effect

A

when increased government borrowing leads to HIGHER interest rates for businesses and the whole economy(govt. is competing for funds)

34
Q

what are the components of the financial account

A
  • reserves(gold, foreign currency)
  • speculatory
  • FDI
35
Q

what are consequences of a current account deficit

A
  • Exchange rate weakening(increased supply of currency)
  • Trade deficit(lower AD)
  • loss of investment confidence(increased borrowing)
36
Q

what is the full definition of development(Sen)

A
  • process of improving well being and quality of life
  • through:
  • improvements in living standards
  • reduction in poverty
  • access to education and healthcare
37
Q

what is the definition of sustainable development

A
  • meeting the needs of current generations without compromising ability for fututre generation to meet their needs
38
Q

why is GNI better than GDP

A
  • it includes remittance and incomes earned from abroad
39
Q

what are the 3 components of HDI

A
  • education
  • healthcare
  • incomes
40
Q

what is the technique to write development essays

A
  • development factor
  • development indicator
  • refer to development definition(Sen)
41
Q

what is the definition for hot money

A

investor savings that chase the best interest rate internationally

42
Q

what are the factors that can affect the exchange rate

A
  • high import demand
  • low interest rates/QE
  • speculations/pessimism(brexit/lizz truss 2022)
  • outward direct investment(increased S of pounds)
43
Q

what does the term capital flight mean

A
  • money leaves a country because of a lack of confidence
44
Q

how much did the pound depreciate by during the brexit referendum

A

depreciated by 15%

45
Q

what are some evaluation points for exchange rates

A
  • incomes abroad/home
  • marshall lerner condition
  • inflation
46
Q

why isnt dpreciation of pound effective in the SR according to the marshall lerner/J curve

A

firms are not able to buy UK exports until contracts end

47
Q
A

economics (alevel) (13 decks)

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