161 Economics As Level Revision Notes Series By Zain Mushtaq

Description

Economics As Level Revision Notes Series By Zain Mushtaq

TABLE OF CONTENT

UNIT 1 BASIC ECONOMIC PROBLEM AND PPC
Needs vs Wants
Factor of production and factor Reward/Payment
Role of enterprise in a modern economy
The Basic Economic Problem/Fundamental economic Problem/Problem of scarcity
Opportunity cost
Production possibility curves
Shape of PPC
Production points
Shifts in PPC
Consumer goods vs capital goods
Resource allocation
Economic systems
Private and Public Sectors
Market System
Planned System
Mixed System
Positive and normative statements
Specialization and division of labor

UNIT 2 DEMAND AND SUPPLY CURVES
Market
Demand
Non-Price Determinants of demand
Supply
Non-Price Determinants of Supply
Market Equilibrium
Excess supply
Excess demand
Microeconomics Equilibrium Shifts

UNIT 3 ELASTICITIES
Price elasticity of demand (PED)
Determinants of PED
Other degrees of PED
Price elasticity of demand and Total Revenue
Price elasticity of demand along the demand curve
Income elasticity of demand (YED)
Cross elasticity of demand (XED)
Price elasticity of supply (PES)
Determinants of PES
Other degrees of PES
Business use and limitations of all elasticites
PED
PES
XED
YED
Limitations
Government use of PED and PES
Subsidy

UNIT 4 GOVERNMENT MICROECONOMIC INTERVENTION
Free goods, private goods (economic goods) and public goods
Public goods
Merit Goods, Demerit Goods as the outcome of imperfect information by the consumers
Merit Goods
De-Merit Goods
Consumer surplus
Producer surplus
Social/Society Surplus
Price Controls (Maximum and Minimum Prices)
Maximum Price (Price Ceiling) and Market impact
Minimum Price (Price Floor) and Market Impact
Indirect taxes
Indirect Taxation-Market Impact
Subsidy-Market Impact
Direct Provision of Goods and Services
Buffer stock schemes
Resource allocation in different economic systems and issue of transition
Economics systems/Systems of resource allocation
Market System
Planned System

UNIT 5 ADDRESSING INCOME AND WEALTH INEQUALITY
Income and wealth
Measuring income and wealth inequality
Reasons for inequality
Policies to redistribute income and wealth
Transfer payments
State provision of essential goods and services

UNIT 6 NATIONAL INCOME STATISTICS
National income statistics
Circular flow of income
Ways of calculating GDP

UNIT 7 AGGREGATE DEMAND AND AGGREGATE SUPPLY ANALYSIS AND PRICE STABILITY
Aggregate Demand
Shifts in AD
Aggregate Supply
Classical Interpretation
Keynes Model (John Maynard Keynes)
Disagreement about Flexibility of wages
Shifts of LRAS is dependent on
Macroeconomic equilibrium
Inflation
Money Value vs Real Value
Measuring inflation using CPI (Consumer Price Index)
Causes if inflation
Demand-pull inflation
Cost-push inflation
Consequences of inflation
Deflation
Supply side deflation (Good deflation)
Demand side deflation (Bad deflation)

UNIT 8 ECONOMIC GROWTH
Nominal GDP vs Real GDP
Real GDP per head Actual versus Potential Growth
Consequences of economic growth
Recession

UNIT 9 UNEMPLOYMENT
Measures of unemployment
Causes and types of unemployment
Consequences of unemployment

UNIT 10 EXCHANGE RATES
Exchange rate
Free Floating Exchange Rate System
Determination of foreign exchange rate
The consequences of a fall in exchange rate (Depreciation)

The consequences of a rise in exchange rate (Appreciation)

UNIT 11 CURRENT ACCOUNT OF THE BALANCE OF PAYMENTS
Current account
Causes and consequences of current account deficit
Consequences of current account deficit
Causes and consequences of current account surplus Consequences of current account surplus

UNIT 12 TRADE PROTECTIONISM AND TERM OF TRADE
Assumptions
Absolute Advantage
Comparative Advantage
Absolute Advantage
Comparative Advantage
Limitations of this model
Free Trade
Benefits of free trade
Free Trade Diagram
Protectionism
Methods of protection and their impact
Tariffs
The terms of trade (TOT)
Movements in TOT
Factors affecting terms of trade
Short-Run Cause
Long-Run Cause
The impact of changes in terms of trade on balance of trade
Policies to correct imbalances in the current of the balance of payments

UNIT 13 GOVERNMENT MACROECONOMIC POLICY OBJECTIVES
Macroeconomic objectives
Fiscal Policy
Taxation
Tax systems
Direct Tax vs Indirect tax
Impact of direct taxes
Advantages
Canons of taxation
Reasons for taxation
Government Spending
Fiscal policy and LRAS
The Budget Position
Monetary Policy
Types of monetary policy
Monetary Policy and LRAS
Supply side policy measures

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