Exam prep lesson Flashcards
What’s the structure for the 25 marker
- Introduction - Tell then what your going to tell them
- Clarify/define some of the key concepts in the question e.g what is the industrial policy, what is macroeconomic performance (do this through out the essay)
- Analysis- Yes because… Yes because… No because… (Evaluate as you go through)
- Conclusion
What is industrial policy
Government policy aimed at improving performance of UK business
What do fiscal policy focus on
Tax and spending
What does monetary policy focus on
Interest rates and money supply
What do supply-side policy focus on
Increasing LRAS/PPF
What graphs should you use for the 25 marker
Supply- side graphs (LRAS)
What are on the axis of a Supply-side (LRAS) graphs
Price level (Top) Real GDP (bottom)
What does expansion do
Boost AD
What does contraction do
Reduce AD
Injections of circular flow of income
Exports
Government expenditure
Investment
Withdrawals from circular flow of income
Imports
Savings
Taxation
What is the current account deficit
When money received by selling products to other countries is less than money spent to buy goods and services from other nations.
What is budget deficit
A budget deficit is where the government spends more money than it receives through taxation.
(National expenditure is more than national income)
What affect does AD have to imports
Inverse relationship
AD falling increase imports
AD rising decreases imports
Formula for AD
C+I+G+(X-M)
