Economics

Rational decision-making

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Rational decision-making   Traditional neo-classical economists believe that consumers act rationally by making decisions that maximise their utility. They also believe firms act rationally to maximise their profits.   Utility refers to the satisfaction a consumer gets from the consumption of a product or service.   However many economists have challenged this school of thought […]
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Rational decision-making
Conflicts between macroeconomic policies

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What are the three macroeconomic policies? Demand Side Policies – Shifts in AD Fiscal Policy – Government Spending & Taxation Monetary Policy – Interest Rates & Money Supply   Supply Side Policy – AS shifts to the right Short Run – Caused by a change in the cost of production Oil Wages Corporation Tax Long […]
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Conflicts between macroeconomic policies
The case against protectionism 

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Exam Boards: Edexcel, AQA, WJEC, CIE, OCR         Level: AS/A LEVELS/IB/IAL Why should countries not protect their domestic industries? Higher prices and less choice Due to increased trade diversion countries will now be purchasing from high-cost producers rather than low-cost producers for the same products.  Lack of efficiency Demand for local products will increase […]
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The case against protectionism 
What factors limit growth and development?

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Exam Boards: Edexcel, AQA, WJEC, CIE, OCR         Level: AS/A LEVELS/IB/IAL What factors limit growth and development? Primary product dependency Savings gap Corruption Government failure Wars Population issues Human capital problems Poor infrastructure Primary product dependency A variety of challenging issues are faced by countries dependent on primary products. Price fluctuations Primary products are […]
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What factors limit growth and development?
Strategies to promote growth and development

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Exam Boards: Edexcel, AQA, WJEC, CIE, OCR         Level: AS/A LEVELS/IB/IAL Strategies to promote growth and development There is a range of strategies that could be used by countries to promote growth and development. Strategies for growth and development in countries will be different depending on their social, economic, political and cultural environment. The […]
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Strategies to promote growth and development
Trading Blocs

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Exam Boards: Edexcel, AQA, WJEC, CIE, OCR         Level: AS/A LEVELS/IB/IAL Trading Blocs What are trading blocs? Trading blocs are groups of countries that agree to reduce or eliminate trade barriers between themselves. Examples of Trading Blocs ASEAN – Association of Southeast Asian Nations APEC – Asia Pacific Economic Cooperation EU – European Union […]
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Trading Blocs
Exchange Rates – AS/A LEVELS/IB/IAL

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Exam Boards: Edexcel, AQA, WJEC, CIE, OCR. Level: AS/A LEVELS/IB/IAL Exchange Rates The exchange rate is the rate at which one currency exchanges for another e.g. £1 = $2. Exchange Rate Systems Floating  The exchange rate is determined by market forces of supply and demand. Fixed This is when a country’s currency is fixed against a […]
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Exchange Rates – AS/A LEVELS/IB/IAL
Inequality – AS/A LEVELS/IB/IAL

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Exam Boards: Edexcel, AQA, WJEC, CIE, OCR. Level: AS/A LEVELS/IB/IAL Inequality Inequality is the unequal distribution of income and opportunity between different groups in society. What is the difference between income and wealth? Income  Income is a flow concept, e.g. the money earned over a period of time. This is usually generated from a salary.  Wealth  This is […]
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Inequality – AS/A LEVELS/IB/IAL
Poverty & Inequality – AS/A LEVELS/IB/IAL

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Poverty & Inequality Exam Boards: Edexcel, AQA, WJEC, CIE, OCR. Level: AS/A LEVELS/IB/IAL Absolute Poverty This is the minimum amount of resources a person needs to meet basic human needs such as food, clean water, shelter and clothing. Relative Poverty People are in relative poverty if they are living below a certain income threshold in a […]
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Poverty & Inequality – AS/A LEVELS/IB/IAL
National Minimum Wage (NMW)

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National Minimum Wage (NMW) The National Minimum Wage is the lowest level of hourly pay that an employer is allowed to pay an employee.  The national minimum wage was introduced by the government to ensure workers were not exploited with unfair low wages. The equilibrium wage rate paid by employers at (PE, QE) was deemed […]
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National Minimum Wage (NMW)

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