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Edexcel A-Level Economics A 9EC0
The Nature of Economics
Topic overviewEconomics as a social sciencePositive and normative economic statementsThe economic problemWhat a production possibility frontier showsShifts in the PPF, and capital against consumer goodsThe division of labour and its advantagesSpecialisation for trade between countriesThe four functions of moneyFree market, command and mixed economiesThe advantages and disadvantages of the free marketCommand and mixed economies assessed
How Markets Work
Topic overviewRational decision makingDemandPrice, income and cross elasticity: formulae and valuesInterpreting income and cross elasticity of demandWhat determines the elasticity of demandUsing elasticities: taxes, subsidies and business planningElasticity and total revenueSupplyPrice elasticity of supply and its valuesWhat determines elasticity of supply, and the short and long runPrice determinationPrice mechanismConsumer and producer surplusIndirect taxes and the incidence of a taxSubsidies and how their benefit is sharedAlternative views of consumer behaviour
Market Failure
Government Intervention
Measures of Economic Performance
Topic overviewMeasuring growth: real GDP, GDP per capita and GNIPurchasing power parity and the limitations of GDPNational wellbeing and the Easterlin paradoxInflation, deflation and how the CPI measures themThe limitations of the CPI, and the RPIDemand-pull, cost-push and monetary causes of inflationThe effects of inflationMeasuring employment, unemployment and inactivityThe causes of unemployment, migration and skillsThe effects of unemploymentThe components of the current accountCurrent account deficits, surpluses and global imbalances
Aggregate Demand
Aggregate Supply
National Income
Topic overviewThe circular flow of incomeThe distinction between income and wealthInjections, withdrawals and the equilibrium conditionWhat counts as an injection and a withdrawalMacroeconomic equilibrium and shifts in AD and ASThe shape of AS, demand-pull inflation and stagflationThe multiplier processMarginal propensities to consume, save, tax and importCalculating the multiplier and why its size matters
Economic Growth
Topic overviewWhat causes economic growthActual against potential growth, and export-led growthTrend growth and positive and negative output gapsIdentifying an output gap on an AD/AS diagramThe four phases of the trade cycle, and the boomRecession, recovery and the output gapThe impact of economic growth
Macroeconomic Objectives and Policies
Topic overviewPossible macroeconomic objectivesMonetary policy: interest rates and quantitative easingFiscal policy: spending, taxation and the budgetDemand-side policy on an AD/AS diagramThe Bank of England, and policy in the 1930s and 2008The strengths and weaknesses of demand-side policyMarket-based and interventionist supply-side policiesLabour market, skills and infrastructure policiesThe strengths and weaknesses of supply-side policyConflicts between growth, inflation and the current accountThe Phillips curve and the trade-offs in a policy mix
Business Growth
Business Objectives
Revenues, Costs and Profits
Topic overviewTotal, average and marginal revenueRevenue, elasticity and the revenue-maximising outputTotal, fixed, variable, average and marginal costWhy short-run cost curves take their shapeThe long-run average cost curve and returns to scaleTypes of economies and diseconomies of scaleInternal and external economies of scaleNormal profit, supernormal profit and lossesThe short-run and long-run shut-down points
Market Structures
Topic overviewEfficiencyThe assumptions of perfect competition and its revenue curvesPerfect competition: equilibrium and efficiencyThe characteristics of monopolistic competitionMonopolistic competition: short-run and long-run equilibriumExcess capacity and efficiency in monopolistic competitionThe characteristics of oligopoly and concentration ratiosCollusive and non-collusive behaviourGame theory, price and non-price competitionThe characteristics of monopoly and its equilibriumThird degree price discriminationThe costs and benefits of monopoly, and natural monopolyWhat monopsony is and where its power comes fromThe costs and benefits of monopsonyContestable markets and hit-and-run competitionBarriers to entry and exitSunk costs and the degree of contestability
The Labour Market
Topic overviewDemand for labourWhat determines the supply of labourGeographical and occupational immobility of labourWage determination in competitive and monopsony marketsCurrent issues in the UK labour marketMinimum and maximum wages, and public sector payThe elasticity of demand for and supply of labour
Government Intervention in Markets
International Economics
Topic overviewWhat globalisation is and what has driven itThe winners and losers from globalisationAbsolute and comparative advantageThe assumptions and limitations of comparative advantageThe gains and costs of international specialisationPattern of tradeTerms of tradeTypes of trading bloc and the hierarchy of integrationTrade creation, trade diversion and the costs of trading blocsThe World Trade OrganisationWhy governments restrict trade, and the instruments usedThe effects of protectionismBalance of payments in a global contextExchange rate systems, and appreciation against revaluationWhat moves a floating rate, and how governments interveneThe Marshall-Lerner condition and the J-curve effectMeasuring competitiveness: unit labour costs and export pricesWhat determines competitiveness, and the cost of losing it
Poverty and Inequality
Emerging and Developing Economies
Topic overviewThe Human Development Index and its three dimensionsThe limits of the HDI, and other development indicatorsPrimary product dependency, the savings gap and Harrod-DomarPopulation, debt, financial exclusion and infrastructureGovernance, corruption, conflict and geographyMarket-orientated strategies: trade liberalisation and FDIInterventionist strategies: human capital and protectionismInfrastructure, joint ventures and buffer stock schemesThe Lewis model, tourism, primary industries and FairtradeAid, debt relief, the World Bank, the IMF and NGOs
The Financial Sector
The Role of the State in the Macroeconomy
Topic overviewCapital, current and transfer spending, and what drives itThe effects of public expenditure, and crowding outProgressive, proportional and regressive taxesThe Laffer curve and the effects of tax changesAutomatic stabilisers, deficits and the national debtWhat drives deficits and debt, and why their size mattersReducing fiscal deficits and national debtPolicies to reduce poverty and inequalityMonetary, exchange rate and supply-side policy across countriesDirect controls, and why policy works differently elsewhereWhat an external shock is, and the kinds that occurFiscal, monetary and supply-side responses to a shockPolicy lags and the constraints on respondingMeasures to control global companies' (transnationals') operationsProblems facing policymakers when applying policies
Emerging and Developing Economies
- 10 subtopics
- 30 things to know
- Papers 2 and 3
What Emerging and Developing Economies covers
Covers development beyond income alone: the Human Development Index, the barriers that hold poorer economies back, and the market-orientated and interventionist strategies used to overcome them.
Where it is assessed
Papers 2 and 3
The national and global economy, then the synoptic paper.
Check the Pearson Edexcel specification ↗The 10 subtopics
Each one has its own page.
- The Human Development Index and its three dimensionsRecall questions on the health, education and income dimensions, the indicators used for each, and how they are combined.Open →
- The limits of the HDI, and other development indicatorsRecall questions on what the HDI misses, and on GNI per capita, infant mortality, literacy, access to clean water and the Multidimensional Poverty Index.Open →
- Primary product dependency, the savings gap and Harrod-DomarRecall questions on commodity price volatility, the Prebisch-Singer hypothesis, the savings gap, the Harrod-Domar model and the foreign currency gap.Open →
- Population, debt, financial exclusion and infrastructureRecall questions on population growth, age structure and the dependency ratio, the demographic dividend, external debt and debt traps, financial exclusion, inadequate infrastructure, low education and skills, and the absence of property rights.Open →
- Governance, corruption, conflict and geographyRecall questions on the quality of governance, corruption, political instability, civil conflict and geography as barriers to development, including landlocked countries, weak property rights, corruption and aid, capital flight and tropical climates.Open →
- Market-orientated strategies: trade liberalisation and FDIRecall questions on trade liberalisation, attracting foreign direct investment, special economic zones, subsidy removal, privatisation and floating exchange rates.Open →
- Interventionist strategies: human capital and protectionismRecall questions on investment in education and health, infant industry protection, managed exchange rates and other interventionist measures.Open →
- Infrastructure, joint ventures and buffer stock schemesRecall questions on transport, energy, telecommunications and sanitation investment, joint ventures with global companies, and how a buffer stock scheme works.Open →
- The Lewis model, tourism, primary industries and FairtradeRecall questions on surplus labour and the Lewis model, the development of tourism and primary industries, and what Fairtrade schemes guarantee.Open →
- Aid, debt relief, the World Bank, the IMF and NGOsRecall questions on bilateral, multilateral and tied aid, debt relief, the roles of the World Bank and the IMF, conditionality, and what NGOs contribute.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Evaluation
What do market-orientated development strategies involve?
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How does the quality of governance influence a country's economic growth and development?
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What range are each of the HDI dimension indices converted into before combination?
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Define GNI per capita and explain how it differs from GDP per capita.
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Define the literacy rate as a development indicator.
Numbers
State the formula for the rate of growth in the Harrod-Domar model and define each term.
Numbers
Calculate the rate of economic growth when savings ratio = 35 %, capital-output ratio = 5.
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What is the dependency ratio and why does it matter for development?
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How can migration patterns influence a country's growth and development?
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What would likely happen to foreign direct investment flows if a country experienced a significant increase in corruption levels?
Evaluation
What is a special economic zone, and how does it encourage FDI?
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Why is investment in energy systems important for economic development?
Process
Why is storage of commodity stocks necessary for buffer stock schemes?
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How does reinvestment of profits drive capital accumulation in the Lewis model?
Evaluation
Explain the multiplier effects of tourism in a local economy.
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What is bilateral aid?
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What is the primary focus of World Bank activities?
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Why is healthcare provision considered part of human capital development?
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What is an import quota, and how does it protect domestic industries?
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What are the three dimensions measured by the Human Development Index?
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Give three important aspects of development that the HDI does not measure.
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Why does primary product dependency limit export revenue growth as global incomes rise?
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What is a demographic dividend?
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In what ways does corruption act as a barrier to economic growth and development?
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Why are legal protections for foreign capital important in attracting FDI?
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Give an example of an administrative barrier used for protectionism.
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How do joint ventures with global companies facilitate technology transfer?
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In the Lewis model, what is meant by surplus labour in the traditional sector?
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How does multilateral aid differ from bilateral aid?
Take Emerging and Developing Economies further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Market-orientated development strategies vs Interventionist development strategies
Market-orientated development strategies: approaches that open the economy and leave allocation to prices and private enterprise. Interventionist development strategies: approaches that direct resources through the state, protecting industries and funding capacity.
The savings gap vs The foreign currency gap
The savings gap: a shortfall in domestic saving that leaves too little finance available for investment. The foreign currency gap: a shortfall in export earnings that leaves too little foreign exchange to buy imported capital.
Bilateral aid vs Multilateral aid
Bilateral aid: assistance given directly by one government to another. Multilateral aid: assistance channelled through an international institution funded by many governments.
Questions from this topic
Each one with the model answer underneath.
- 1
What are the three dimensions measured by the Human Development Index?
Model answer
Education, health, and living standards.
- 2
Which dimension of the HDI captures knowledge and learning outcomes?
Model answer
The education dimension.
- 3
Which HDI dimension reflects longevity and wellbeing?
Model answer
The health dimension.
- 4
Which HDI dimension captures economic prosperity and material welfare?
Model answer
The living standards dimension.
- 5
If a country has high GDP per capita but low life expectancy and limited schooling, what would happen to its HDI score compared to using GDP alone?
Model answer
Its HDI score would be lower than its GDP ranking suggests, because HDI also accounts for poor health and education outcomes.
- 6
What indicator is used to measure the health dimension of the HDI?
Model answer
Life expectancy at birth.
What is inside Levo
Six ways to work the same material.
Emerging and Developing Economies revision questions
- What does Emerging and Developing Economies cover in Edexcel A-Level Economics A?
- 10 subtopics: the human development index and its three dimensions, the limits of the hdi, and other development indicators, primary product dependency, the savings gap and harrod-domar, population, debt, financial exclusion and infrastructure, governance, corruption, conflict and geography, market-orientated strategies: trade liberalisation and fdi, interventionist strategies: human capital and protectionism, infrastructure, joint ventures and buffer stock schemes, the lewis model, tourism, primary industries and fairtrade and aid, debt relief, the world bank, the imf and ngos. Each one has its own page with questions and model answers.
- How is Emerging and Developing Economies organised?
- By the Edexcel 9EC0 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Emerging and Developing Economies, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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