Macroeconomics: Economic Policy Objectives

What Macroeconomics: Economic Policy Objectives covers

Economic Policy Objectives is examined on component 02 of OCR Economics, Macroeconomics. 218 recall questions across 16 subtopics.

The 16 subtopics

Each one has its own page.

• Economic growth, real and nominal GDP and GDP per capitaRecall questions on economic growth as a policy objective, nominal and real GDP, calculating growth rates, and GDP per capita with worked calculations.Open →
• Short and long run growth, the economic cycle and the effects of growthRecall questions on short and long run growth, the four stages of the economic cycle, recession, the trend rate, growth on diagrams, its causes, benefits and environmental costs.Open →
• Economic structure, deindustrialisation and sustainable developmentRecall questions on the primary, secondary and tertiary sectors, deindustrialisation and its regional effects, sustainable development, and how growth supports or conflicts with it.Open →
• Limitations of GDP and the Human Development IndexRecall questions on the limitations of GDP as a measure of living standards, the Human Development Index and its calculation, alternative indicators and purchasing power parity.Open →
• Employment, unemployment rates and the objective of full employmentRecall questions on employment, unemployment, the labour force and economic inactivity, unemployment and participation rate calculations, underemployment and the objective of full employment.Open →
• Measures, types and costs of unemployment and the effects of full employmentRecall questions on the Labour Force Survey and claimant count, cyclical, frictional, structural, seasonal and real wage unemployment, hysteresis, and the costs and benefits of full employment.Open →
• Inflation, deflation, real values and the CPI and RPIRecall questions on inflation, deflation, disinflation and hyperinflation, the UK inflation target, nominal and real values, and how the CPI and RPI are built and differ.Open →
• Calculating inflation with index numbers and its causes and consequencesRecall questions on calculating inflation and price indices from index numbers, demand-pull and cost-push inflation, the wage-price spiral, and the costs of inflation and deflation.Open →
• Balance of payments accounts and current account calculationsRecall questions on the current, capital and financial accounts, trade in goods and services, primary and secondary income, and balance of payments calculations.Open →
• Causes and consequences of current account imbalancesRecall questions on a sustainable balance of payments, how competitiveness, exchange rates and growth cause current account deficits, and the consequences and financing of imbalances.Open →
• Key trends in UK macroeconomic performanceRecall questions on the indicators used to judge performance and key UK trends in growth, productivity, unemployment, inflation, the current account and government debt.Open →
• Comparing UK performance internationally and the limits of economic dataRecall questions on UK growth compared with developed and emerging economies, convergence, and why macroeconomic data, models and seasonal adjustment need careful interpretation.Open →
• Income and wealth, redistribution and absolute and relative povertyRecall questions on income and wealth, original and disposable income, equivalised income, policies and arguments on redistribution, and absolute and relative poverty with calculations.Open →
• Lorenz curves, the Gini coefficient and the causes of povertyRecall questions on mean and median incomes, quintiles and deciles, constructing Lorenz curves, calculating the Gini coefficient, and the causes and consequences of poverty and inequality.Open →
• The natural rate of unemployment and Keynesian and neo-classical aggregate supplyRecall questions on the natural rate of unemployment and NAIRU, and the Keynesian and neo-classical aggregate supply curves with their different policy implications.Open →
• Short and long run Phillips Curves and their usefulnessRecall questions on the short run and long run Phillips Curves, what shifts them, the adjustment to expansionary policy, stagflation, and the curve's usefulness to policymakers.Open →

What you need to know

Answer each one before you reveal it.

Take Macroeconomics: Economic Policy Objectives further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Frictional unemployment vs Structural unemployment

  Frictional unemployment: joblessness while people move between posts, which is usually short lived. Structural unemployment: joblessness because the skills or location of workers no longer match where the jobs are.

• Seasonal unemployment vs Real wage unemployment

  Seasonal unemployment: joblessness that follows the predictable annual pattern of an industry's activity. Real wage unemployment: joblessness because pay is held above the level that would clear the market.

• Absolute poverty vs Relative poverty

  Absolute poverty: an inability to afford the minimum needed to sustain life. Relative poverty: an income far enough below the national middle to exclude a household from ordinary life.

Questions from this topic

Each one with the model answer underneath.

1. 1

   What is economic growth?

   Model answer

   An increase in the real output of an economy over a period of time, normally measured as the percentage change in real Gross Domestic Product.

2. 2

   Why do governments pursue economic growth as a policy objective?

   Model answer

   Sustained growth raises average real incomes and living standards, creates employment and widens the tax base that funds public services.

3. 3

   What does Gross Domestic Product measure?

   Model answer

   The total value of all final goods and services produced within a country's borders over a given period.

4. 4

   Distinguish between nominal and real GDP.

   Model answer

   Nominal GDP values output at the prices of the day, while real GDP values it at constant prices so that the effect of inflation is stripped out.

5. 5

   Why can nominal GDP rise in a year when real GDP falls?

   Model answer

   Because prices can rise fast enough that the higher money value of output conceals a fall in the physical quantity actually produced.

6. 6

   How is nominal GDP converted into real GDP?

   Model answer

   It is deflated by a price index, multiplying nominal GDP by the base-year index value and dividing by the current index value.

What is inside Levo

Six ways to work the same material.

Macroeconomics: Economic Policy Objectives revision questions

What does Macroeconomics: Economic Policy Objectives cover in OCR A-Level Economics?

16 subtopics: economic growth, real and nominal gdp and gdp per capita, short and long run growth, the economic cycle and the effects of growth, economic structure, deindustrialisation and sustainable development, limitations of gdp and the human development index, employment, unemployment rates and the objective of full employment, measures, types and costs of unemployment and the effects of full employment, inflation, deflation, real values and the cpi and rpi, calculating inflation with index numbers and its causes and consequences, balance of payments accounts and current account calculations, causes and consequences of current account imbalances, key trends in uk macroeconomic performance, comparing uk performance internationally and the limits of economic data, income and wealth, redistribution and absolute and relative poverty, lorenz curves, the gini coefficient and the causes of poverty, the natural rate of unemployment and keynesian and neo-classical aggregate supply and short and long run phillips curves and their usefulness. Each one has its own page with questions and model answers.

How is Macroeconomics: Economic Policy Objectives organised?

By the OCR H460 specification, subtopic by subtopic, so it matches the order you are taught it in.