GCE A/L Economics study plan

Build a one-page circular-flow map with injections and withdrawals, then use it to explain how a rise in planned investment changes equilibrium national income.

Calculate national income by the output, income and expenditure methods from a supplied data set and reconcile any statistical discrepancy between them.

Convert nominal GDP into real GDP, calculate a GDP deflator, a growth rate and GDP per capita, and explain why real GDP per capita is an imperfect measure of living standards.

Derive the multiplier from a marginal propensity to consume and apply it to a numerical injection, showing the cumulative effect on equilibrium output.

Draw and label AD/AS diagrams for a demand-side shock, a supply-side shock and a negative output gap, stating the adjustment path to a new equilibrium in each case.

Explain the functions and characteristics of money and construct a numerical example of credit creation with a stated reserve ratio and cash-drain assumption.

Evaluate three instruments a central bank can use to tighten monetary conditions, stating the transmission mechanism from each instrument to aggregate demand.

Distinguish demand-pull from cost-push inflation and calculate an inflation rate from two years of consumer price index data, including the effect of a change in the weights.

Classify five given scenarios into frictional, structural, seasonal, cyclical or real-wage unemployment and explain the policy implication of each type.

Use a short-run Phillips curve to explain the inflation-unemployment trade-off and show how a shift in expectations moves the curve.

Classify eight given market events as a movement along, or a shift of, the demand or supply curve, and justify each classification.

Predict and diagram the effect of simultaneous demand and supply shifts on equilibrium price and quantity in four markets.

Calculate price elasticity of demand and price elasticity of supply from numerical data and classify each result as elastic, inelastic, unit elastic or perfectly elastic/inelastic.

Explain the relationship between price elasticity of demand and total revenue for a price rise and a price cut in three different markets.

Analyse one real market using demand and supply, explaining the rationing, signalling and incentive functions of the price mechanism.

Calculate income elasticity and cross elasticity of demand from data and classify goods as normal, inferior, substitute or complement.

Illustrate and explain the incidence of an indirect tax and of a subsidy under elastic and inelastic demand, identifying who bears the burden and why.

Analyse changes in consumer and producer surplus caused by a price ceiling, a price floor and an indirect tax, labelling the deadweight loss on each diagram.

Distinguish the short-run from the long-run production function and calculate total, average and marginal product from a table of inputs and outputs.

Derive total, average, average variable and marginal cost from a cost schedule and identify the output at which diminishing marginal returns set in.

Explain the shape of short-run and long-run average cost curves using diminishing returns and economies and diseconomies of scale.

Locate profit maximisation (marginal revenue equals marginal cost) and the shut-down point on cost and revenue schedules, calculating profit or loss at each output.

Compare perfect competition with monopoly on price, output, allocative efficiency, productive efficiency and consumer surplus using paired diagrams.

Distinguish normal from supernormal profit and show the long-run equilibrium position of a perfectly competitive firm and of a monopolistically competitive firm.

Evaluate price discrimination, natural monopoly and contestability with reference to at least two named industries.

Analyse oligopoly behaviour using the kinked demand curve, collusion and the prisoner's dilemma, and explain why price rigidity can persist.

Assess allocative, productive, dynamic and X-efficiency outcomes for each market structure and rank them by welfare outcome.

Distinguish private from external costs and benefits and diagram the welfare loss arising from a negative production externality.

Classify merit goods, demerit goods and public goods, and explain why each is under- or over-provided in an unregulated market.

Evaluate two alternative policies for correcting a negative externality, such as a Pigouvian tax versus tradable permits, with a diagram for each.

Match six microeconomic instruments (indirect tax, subsidy, regulation, tradable permits, information provision, property rights) to the specific market failures they address and note one limitation of each.

Evaluate fiscal policy in closing a deflationary gap and an inflationary gap, using AD/AS diagrams and stating the size of the required change in spending via the multiplier.

Explain the transmission mechanism of monetary policy and assess how its effectiveness depends on the interest elasticity of investment and of money demand.

Distinguish interventionist from market-based supply-side policies, giving two examples of each and identifying their likely time lags.

Assess the conflicts between macroeconomic objectives, including growth versus inflation, unemployment versus inflation and growth versus the balance of payments.

Explain comparative advantage by calculating opportunity cost ratios for two countries and identifying the limits within which mutually beneficial terms of trade must lie.

Analyse the causes of a current account deficit and evaluate expenditure-reducing, expenditure-switching and supply-side remedies for it.

Explain how floating and fixed exchange rates are determined and assess the effect of a depreciation on the current account using the J-curve and the Marshall-Lerner condition.

Distinguish economic growth from economic development and evaluate the Human Development Index against GDP per capita as a development measure.

Evaluate the case for and against protectionism, diagramming the welfare loss from a tariff and stating the distributional effects on consumers, producers and the government.