Theme 2: The UK economy – performance and policies

2.1 Measures of economic performance

• 2.1.1 Economic growth
• 2.1.2 Inflation
• 2.1.3 Employment and unemployment
• 2.1.4 Balance of payments

 

2.2 Aggregate demand (AD) 

• 2.2.1 The characteristics of AD
• 2.2.2 Consumption (C)
• 2.2.3 Investment (I)
• 2.2.4 Government expenditure (G)
• 2.2.5 Net trade (X-M)

 

2.3 Aggregate supply (AS)

• 2.3.1 The characteristics of AS
• 2.3.2 Short-run AS
• 2.3.3 Long-run AS

 

2.4 National income

• 2.4.1 National income
• 2.4.2 Injections and withdrawals
• 2.4.3 Equilibrium levels of real national output
• 2.4.4 The multiplier

 

2.5 Economic growth 

• 2.5.1 Causes of growth
• 2.5.2 Output gaps
• 2.5.3 Trade (business) cycle
• 2.5.4 The impact of economic growth

 

2.6 Macroeconomic objectives and policies

• 2.6.1 Possible macroeconomic objectives
• 2.6.2 Demand-side policies
• 2.6.3 Supply-side policies
• 2.6.4 Conflicts and tradeoffs between objectives and policies