Summary Economic performance unit 3 AQA AS Economics MACRO A* notes
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Course
A level
Institution
A Level
Specification-specific notes for UNIT 3 MACRO: economic performance. This includes Economic growth and the economic cycle, unemployment and employment, inflation and disinflation, balance of payments on current account and macroeconomic policy conflicts. A* notes
Unit 3 Economic Performance
a economic growth the economic cycle
b employment unemployment
c inflation disinflation
d balanie of payments on current account
e possible conflicts between macroeconomicpolicy objectives
1 economic growth the economic cycle
SPI difference between LR SR growth
economic growth an increase in the productivepotential of an economy
short run the l in w ease in a country's real GDP as it is usually measured annually caused by
real GDP effect of inflation removed caused by TAD
I also known as potential growth
long run growth occurs when the productive capacity of the economy is increasing it is when LRA
refers to trend rate of growth of real national output in an economy overtime Caused by
I
,E G t can be shown on PP Cl PPF curve
at
other
B C long run growth thcapacity commod
inwards
pygmy
sp2 polit
causes of SR growth demand side factors of EG MSR As shock
1 W Wealth affect it asset priceit feel wealthier T DI T C TAD
weat
2 cut in it in decem
1 41013 71 Disposable income T spending TC TAD
2 Lrate of return on savings th in ien live to consume s ratio 47 PC PAD
3 t mon A DI monthly t TM PL TC MAD
thy payments for variable rate mortgage s
4 tCoDfor firms reach hurdle easier requiredrate of return for investment projects togo ahead TMPI TI
3 gov could 4 marginal rate of income tax for those in lower income tax bandsfor T t ax tree allowan
, 6 Weak ER by 41127 Thot money outflows todemand of currency and since borrowing cheaper Tsu
ÉÉ SI
n
12 T t to weaken IR
g
p
p Qot currency
T money supply
selling domestic currency reserves
supply side factors of Ea
causes of LR growth P Q'otcapitapistoustitigictitristicien
evaluatifias A
Pl
If
OR k
A
pp pp realGDP
consumer y ya
goods services
1
govspending on education 7 spending on apprenticeship schemes adult re training school cirric
T productivity of labourtorte T human capital structural UE by providing skills to fill job vac
, 3 gotottering subsidies or tax allowanies to in sensitize firms to invest spending on new capital
R D innovation tha of capital stock in economy Tproductiveefficiency TLR As
or t Corporation tax it retained profit easier to reach hurdle A MPI PITT Q Otis
IReducing marginal rate of income tax in incentive to worktaider as less income will be taxed aw
hose economically inatterrelying on benefits as its than potential disposable incomesincen ti tied
abour torte TLRAS
5 Deregulation t laws gov imposed standards in economy leg environmental laws health safety
KCOP t and legal barriers to enter market 4 A competition 7 intentivisins max efficiency A
6 Tradeliberalisation trade barriers tar nits quotas in global comp fierce intense natu
to do whatever they can to compete dueto PMobjective 7 him in anti tied tow costs to 4prices
A produnite efficiency LEAs
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