Key term
WJEC AS-Level Economics 1520QS
Scarcity and Choice
Topic overviewScarcity, choice and opportunity costProduction possibility frontiers (PPFs): Production possibility frontier diagrams to depict choiceProduction possibility frontiers (PPFs): Factors which may shift the PPF inwards or outwardsSpecialisation, division of labour and exchange: Advantages and disadvantages of specialisationSpecialisation, division of labour and exchange: Productivity
Demand and Supply in Product Markets
Topic overviewFactors influencing demand and supply in product markets: Product marketFactors influencing demand and supply: Main influences on demand and supply in product marketsThe determination of equilibrium price: Equilibrium price and output, and disequilibriumThe determination of equilibrium price: How the market adjusts to a new equilibriumThe determination of equilibrium price: Consumer and producer surplus on the diagramConsumer and producer surplusPrice, income and cross price elasticities: Price elasticity of demandPrice, income and cross price elasticities: Income and cross price elasticity of demandPrice, income and cross price elasticities: Price elasticity of supply, uses of elasticity and tax incidence
Demand and Supply in Labour Markets
Topic overviewWage determination: Demand for labour as a derived demandWage determination: Equilibrium wage rate and shifts in labour demand and supplyWage determination: Elasticity of demand for labour and Elasticity of supply of labourWage determination: Causes of wage differentials, Effects of wage differentials, and wages in WalesLabour market issues: Factors which affect flexibility in labour marketsLabour market issues: Effects of the statutory national minimum wage on labour marketsLabour market issues: Impact of migration on labour markets
Resource Allocation
Market Failure
Topic overviewUnderstanding market failure: Market failureUnderstanding market failure: Public goods, Merit and demerit goodsUnderstanding market failure: ExternalitiesUnderstanding market failure: Externalities of consumption and monopoly powerUnderstanding market failure: Information asymmetries and gaps, Income inequalityUnderstanding market failure: Volatile prices and externality diagramsWhy and how governments intervene in markets: Reasons for government intervention in marketsWhy and how governments intervene in markets: Maximum prices, road pricing, pollution permits and other interventionsWhy and how governments intervene in markets: Evaluating government interventionThe effects of government intervention: Government intervention can create distortions in marketsThe effects of government intervention: Reasons for government failure
Macroeconomic Theory (AS)
Topic overviewThe circular flow of income model: Flows in the circular flow modelThe circular flow of income model: Injections into and withdrawals from the circular flowThe circular flow of income model: Model to explain the concept of national income equilibriumThe units of aggregate demand (AD): Units of aggregate demand: consumptionThe units of aggregate demand (AD): Factors affecting consumption and investment, and the AD curveThe AD function: Why an AD function will slope downward from left to rightThe AD function: Changes in the unitsThe aggregate supply (AS) function: Shape of the Keynesian long run aggregate supply curveThe aggregate supply (AS) function: Factors which might result in a shift in LRASAD/AS analysis
Government Policy Objectives
Topic overviewEconomic growth: Actual and potential growth, output gaps and the business cycleEconomic growth: Benefits of economic growth for households, government and firmsEconomic growth: Illustrating growth on PPF and AD/AS diagramsUnemployment (AS): Measurement and typesUnemployment (AS): CostsUnemployment (AS): Causes
Policy Instruments (AS)
Topic overviewFiscal policy: FrameworkFiscal policy: Direct and indirect taxes and demand side fiscal policyFiscal policy: Automatic stabilisers, time lags and the Laffer curveMonetary policy: Bank of England and the Monetary Policy Committee, Inflation targetMonetary policy: Bank Rate and the transmission mechanismExchange rates and exchange rate policy: Exchange rates in a free marketExchange rates and exchange rate policy: Exchange rate policySupply side policies: Aims of supply side policiesSupply side policies: Market-based supply side policies and Limitations of supply side policies
Macroeconomic Theory (AS)
- 10 subtopics
- 30 things to know
- AS Units 1 and 2
What Macroeconomic Theory (AS) covers
Macroeconomic Theory (AS) is AS content, examined in both AS Unit 1 and AS Unit 2, which each cover the full AS content. 115 recall questions across 10 subtopics.
Where it is assessed
AS Units 1 and 2
Introduction to Economic Principles and Economics in Action, both covering the full AS content.
Check the WJEC specification ↗The 10 subtopics
Each one has its own page. WJEC AS Economics students sit this topic in the first year.
- The circular flow of income model: Flows in the circular flow modelRecall questions on The flows in the circular flow model.Open →
- The circular flow of income model: Injections into and withdrawals from the circular flowRecall questions on Injections into and withdrawals from the circular flow.Open →
- The circular flow of income model: Model to explain the concept of national income equilibriumRecall questions on The model to explain the concept of national income equilibrium and to explain how changes in injections and withdrawals might lead to changes in the equilibrium level of national income.Open →
- The units of aggregate demand (AD): Units of aggregate demand: consumptionRecall questions on The units of aggregate demand: consumption, investment, government spending and net exports.Open →
- The units of aggregate demand (AD): Factors affecting consumption and investment, and the AD curveHow income, wealth, interest rates, expectations and tax drive consumption and investment, and what the AD curve shows and what shifts it.Open →
- The AD function: Why an AD function will slope downward from left to rightRecall questions on Why an AD function will slope downward from left to right.Open →
- The AD function: Changes in the unitsRecall questions on Changes in the units of AD can cause the function to shift.Open →
- The aggregate supply (AS) function: Shape of the Keynesian long run aggregate supply curveRecall questions on The shape of the Keynesian long run aggregate supply curve.Open →
- The aggregate supply (AS) function: Factors which might result in a shift in LRASRecall questions on The factors which might result in a shift in LRAS.Open →
- AD/AS analysisEighteen recall questions on AD/AS analysis.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Key term
What causes the AD curve to shift?
Key term
Name the three effects that explain why the AD curve slopes downward.
Key term
What three macroeconomic variables are determined by the interaction of AD and AS in the long run?
Key term
State the fundamental identity that holds in the circular flow model.
Key term
Which injection represents spending by the public sector on goods and services?
Key term
Define a withdrawal (or leakage) in the circular flow model.
Key term
What happens to national income when injections exceed withdrawals, and why?
Key term
Explain the effect on national income when withdrawals exceed injections.
Key term
What are the four components that make up aggregate demand?
Key term
In the aggregate demand equation, what does 'C' represent?
Key term
How does the level of income in the economy affect consumption?
Process
In the real balance effect, what happens to the price level as the starting point for the mechanism?
Who and when
When the price level falls, what happens to the real value of money balances according to the real balance effect?
Key term
What happens to net exports as a result of the trade effect when domestic prices fall?
Key term
Describe the horizontal section of the Keynesian LRAS curve and explain what it represents about the economy.
Key term
At what point does the Keynesian LRAS curve become vertical, and what does this section represent?
Key term
Why does greater factor market flexibility shift the LRAS curve to the right?
Process
Through what mechanism do investment incentives affect the LRAS curve?
Who and when
What determines the equilibrium level of employment in the long run according to the AD/AS model?
Key term
What factors of production do households supply to firms in the circular flow?
Key term
What condition must hold for national income to be in equilibrium?
Process
Define the multiplier process.
Key term
In the aggregate demand equation, what does 'I' represent?
Key term
How does household wealth affect consumption?
Key term
What happens to consumption spending when consumers feel wealthier due to the real balance effect?
Process
In the interest rate effect, what happens to the price level at the start of the mechanism?
Key term
Why does the LRAS curve become vertical at the full employment level of output?
Key term
How does labour market deregulation act as a policy instrument to shift LRAS?
Key term
What condition defines equilibrium in the AD/AS model?
Take Macroeconomic Theory (AS) further
The same content, four other ways.
Questions from this topic
Each one with the model answer underneath.
- 1
What does the circular flow of income model illustrate about an economy?
Model answer
It shows the continuous movement of money, goods, and services between households and firms in an economy.
- 2
State the fundamental identity that holds in the circular flow model.
Model answer
Income equals output equals expenditure (Y = O = E).
- 3
Define each term in the equation Y = O = E.
Model answer
Y represents national income, O represents national output, and E represents national expenditure.
- 4
What factors of production do households supply to firms in the circular flow?
Model answer
Labour, land, capital, and enterprise.
- 5
What factor incomes do firms pay to households in return for the factors of production?
Model answer
Wages, rent, interest, and profit.
- 6
In the circular flow, what flows from firms to households in the product market?
Model answer
Goods and services.
What is inside Levo
Six ways to work the same material.
Macroeconomic Theory (AS) revision questions
- Is Macroeconomic Theory (AS) examined at AS in WJEC Economics?
- Yes. It sits in AS Units 1 and 2, which you take in the first year, so it is on the AS paper as well as counting towards the full A level.
- What does Macroeconomic Theory (AS) cover in WJEC AS-Level Economics?
- 10 subtopics: the circular flow of income model: flows in the circular flow model, the circular flow of income model: injections into and withdrawals from the circular flow, the circular flow of income model: model to explain the concept of national income equilibrium, the units of aggregate demand (ad): units of aggregate demand: consumption, the units of aggregate demand (ad): factors affecting consumption and investment, and the ad curve, the ad function: why an ad function will slope downward from left to right, the ad function: changes in the units, the aggregate supply (as) function: shape of the keynesian long run aggregate supply curve, the aggregate supply (as) function: factors which might result in a shift in lras and ad/as analysis. Each one has its own page with questions and model answers.
- How is Macroeconomic Theory (AS) organised?
- By the WJEC 1520QS specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Macroeconomic Theory (AS), 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.
Or £46 a year, about £3.83 a month. Cancel anytime.