Specifications that use this resource:
Scheme of work: year 1 – AS and A-level
This scheme of work offers a route through the AS Economics subject content, covering all the sections and sub-sections and includes opportunities to develop the necessary set of skills required for the economist’s ‘tool kit’.
Guidance is given about any prior knowledge which is helpful or required. The order is by no means prescriptive and there are alternative ways in which the content could be organised. A total of 9 hours has been built into each AS section to allow time for assessment activities and revision but all timings are approximate. The numerical coding for each section of this scheme of work ties in with the section numbers in the specification as published on the website.
Assumed coverage
This scheme of work assumes the AS course is a one-year course or the first year of a two-year A-level, with four hours of lessons per week, approximately 120 taught hours. As AS subjects should have 180 guided learning hours allocated to them, there is a significant amount of time (60 hours) which students should use for additional study and for completing assignments outside lesson time.
Scheme of work
Model for one teacher with microeconomics (Section 1) followed by macroeconomics (Section 2). With two teachers, teacher 1 could teach the micro alongside teacher 2 teaching the macro.
3.1.1 Economic methodology and the economic problem
Total time: 6 hours + 1 hour for assessment activities.
3.1.1.1 Economic methodology
Although placed at the beginning of the AS subject content, teachers might prefer to introduce economic methodology later in this section once students have developed an understanding of what economics is about.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn that Economics is classed as a social science and the similarities to and differences in methodology from natural and other sciences To learn meanings and examples of positive and normative statements, plus value judgements Skills The consequences of making statements when applying concepts to answers | Students should be able to understand that Economics involves the study of society and the manner in which economic agents behave and influence the world around them. It involves scientific study and observation of individuals, firms and organisations to explain economic patterns of behaviour and the construction of complex models to make sense of this and to make predictions as to future behaviour. A brief overview of course content may be useful Students should be able to identify features of positive and normative statements and appreciate the role of each in Economics (1 hour allocated) | Economics as a social science: This is the basic starting point of what students are to study. Teachers may begin by drawing similarities with other social sciences such as sociology, human geography or government and politics. Comparisons can be drawn with humanities subjects and students can be introduced to the difference between quantitative and qualitative information. This could be by reading a small article or passage from most A-level textbooks Introduction to positive and normative statements: Brief teacher-led activity on statements followed by use of textbooks to analyse positive and normative statements and appreciate their differences Statements clip: short clip explaining the validity of statements. Statements clip: short clip explaining the validity of statements Statements in recent news: Using two recent newspaper articles of a topical event, one reporting the events and another giving opinion to highlight the differences. If possible using an article which has both and get students to highlight the differences Key terms: Summary of all key terms used in basic problem section Ideas for differentiation and extension Application of the concepts to economic areas not yet studied or to non-economic topics | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 2-6 Anderton,A. Economics 6th edition Andertonpress (2015). pg 2-5 Lawrence,J. et al. (2008). pg 15 & 16. Powell,R. 2nd ed. (2013). pg 4-5. Economic and Social Research Council Economics Online YouTube Why Study Economics clip. YouTube Positive v Normative clip. |
3.1.1.2 The nature and purpose of economic activity
3.1.1.3 Economic resources
3.1.1.4 Scarcity, choice and the allocation of resources
Prior knowledge: None
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the nature of the subject/course, including ‘the basic economic problem’ Skills Note-making, note-taking plus appropriate use of textbooks and other resources. Multiple choice questions can also be introduced from an early stage | Students may have no economic knowledge before starting the course, although some may have studied a business-related subject. This section provides an introduction. A preparatory task could be set to introduce them to micro and macroeconomics by asking them to find out about an economic news story or investigate the basic problem. (3 hours allocated) | Introductory lesson: Non-economic ice-breakers, course administration, ground rules and looking at preparatory tasks. Introduce Students to “What is economics?” using newspaper articles or stories. Economic resources: Student activity separating resources into categories of land, labour, capital and the entrepreneur. This can either be done as lists or visual laminated items. The basic problem: Teacher led presentation of the basic economic problem and what how and for whom to produce. Scarcity: Using textbooks and clips of scarcity in other countries. Introduction to note taking. Use of textbooks exercises to assess knowledge gained. (Stretch and challenge opportunity in questions set). Allocation of resources: Teacher led look at how choices have an opportunity cost. Clips can include empty motorways in Portugal. A look at how different countries respond to the basic problem in terms of resource allocation. A brief teacher led introduction to the difference between the free market and command economies. Basic economic problem ICT opportunity: Basic problem quiz assessing knowledge gained or teacher led activity with Students showing responses to questions on whiteboards. Ideas for differentiation and extension Introduction to idea of ‘Wider Reading’ | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Anderton,A. 6th ed. (2015). pg 12-16. Lawrence,J. et al. (2008). pg 3-9. Powell,R. 2nd ed. (2013). pg 2-20. Threadgold,A. et al. Microeconomics for AS. 2nd ed. Anforme. |
3.1.1.5 Production possibility diagrams
Prior knowledge: knowledge of ‘The purpose of economic activity’; and the concepts of opportunity cost and economic resources (parts of 3.1.1) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what production possibility diagrams show and how they can be used Skills Drawing/labelling of diagrams | Students should be able to understand the basis on which production possibility curves are drawn, the significance of points inside, on and outside the boundary, plus their application, including related terminology (2 hours allocated) | Production possibility curves: Teacher-led introduction to production and the PPF. Use of textbooks exercises to explain movements within the curve and movements of the curve, including the concept of productive efficiency, under-utilisation of resources and trade-offs. PPF clip: Students watch clips with pre-prepared questions on how PPFs work. PPF comprehension: Use of articles to illustrate how PPFs are used in economics. PPF quiz ICT opportunity: PPF quiz assessing knowledge gained or teacher-led activity with students showing responses to questions on whiteboards. Ideas for differentiation and extension Use for macro as well as micro situations | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Anderton,A.6th ed. (2015). pg 17-21. Lawrence,J. et al. (2008). pg 9-17. Powell,R. 2nd ed. (2013). pg 10-12. Economics Today Vol. 19. Sep 2011. How does the PPF fit into Economics? |
3.1.2 Price determination in a competitive market
Total time: 17 hours + 2 hours for assessment activities
3.1.2.1 The determinants of the demand for goods and services
3.1.2.2 Price, income and cross-elasticities of demand
Prior knowledge: Possibly none but an awareness of ‘Economic methodology and the economic problem’ (3.1.1) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the factors that determine the demand for a product and the extent to which this demand will change in response to changes in other variables Skills Basic demand diagrams; and calculations, including percentage changes | Students should understand the difference between causes of shifts of and movements along the demand curve and be able to interpret different numerical values for the various elasticities of demand (6 hours allocated) | Demand: Teacher-led activity introducing the concept of demand and the differences between individual demand, market demand and effective demand with reference to demand schedules. Explain the concept of the law of demand. Understanding the relationship between price and quantity. Teacher-led presentation of demand. Factors such as normal goods, inferior goods, substitutes and complementary goods Plotting demand: Student-focussed activities based upon plotting demand curves based upon demand schedules Factors affecting demand: Analysis of different situations in which the demand curve can shift. Use sketch diagrams to illustrate changes. Understanding the differences between shifts in the demand curve and extensions and contractions in demand Real world scenarios: Examples of real world scenarios and the effects on demand using combinations of current news clips or articles from the news. Elasticity: For some Students this will prove complex. An explanation of why the curve may be “steeper” or “flatter” may be a good starting place. Calculations of percentage changes may also be useful before applying to elasticity. Maths skills: Use elasticity formulae to calculate basic elasticity. (Stretch and challenge opportunity: allow students with higher maths skills to calculate revenues before and after changes). Diagrammatical analysis: Activities allowing students to interpret elasticity results and recreating results diagrammatically. Other elasticities: Teacher led presentations of income elasticity and cross price elasticity. Interpretation of results and uses of each measure. Income elasticity used for normal/inferior. Cross elasticity used for substitute/complement. Students should understand the sign and size of the elasticity coefficient. P.E.D. quiz ICT: P.E.D. quiz assessing knowledge gained, or, teacher led activity with students showing responses to questions on whiteboards. Ideas for differentiation and extension Real world applications and more technical points about elasticity | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Anderton,A. 6th ed. (2015). pg 36-60 Lawrence,J. et al. (2008). pg 18-25 & 51-60. Powell,R. 2nd ed. (2013). pg 22-30, 48-53 & 57-60. Economics Today Vol. 19. Sep 2011.Elasticities P.E.D quiz .tutor2u |
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3.1.2.3 The determinants of the supply of goods and services
3.1.2.4 Price elasticity of supply
Prior knowledge: Possibly none but an awareness of ‘Economic methodology and the economic problem’ (3.1.1) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the factors that determine the supply of a product and the extent to which this supply will change in response to a change in price Skills Basic supply diagrams; and more practice of calculations, including percentage changes | Students should understand the difference between causes of shifts of and movements along the supply curve and be able to interpret different numerical values for the various elasticities of supply (4 hours allocated) | Supply: Teacher-led activity introducing the concept of supply and supply schedules. Explain the incentive concept and understand the relationship between price and quantity. Contrast the objectives of firms with that of individuals Plotting supply: Student- focussed activities based upon plotting supply curves based upon supply schedules Factors affecting supply: Analysis of different situations using sketch diagrams in which the supply curve can shift such as the cost of the factors of production and indirect taxation/subsidy. Understanding the differences between shifts in the supply curve and extensions and contractions in supply Real world scenarios: Examples of real world scenarios and the effects on supply using combinations of current news clips or articles from the news Elasticity: As with price elasticity of demand, some students find this difficult. Similarities and differences between formulae already learnt may be a good starting point. Calculations of percentage changes may also be useful before applying to elasticity of supply or questioning what makes supply “easier” or “more difficult” Quantitative skills: Use elasticity formulae to calculate basic elasticity.(Stretch and challenge opportunity: allow students with higher maths skills to calculate government revenue from taxation or the cost to the government of providing a subsidy) Diagrammatical analysis: Activities allowing students to interpret elasticity results and recreating results diagrammatically Ideas for differentiation and extension Students could explore the effects of indirect taxes and subsidies at this stage | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Anderton,A. 6th ed. (2015). pg 61-68 Lawrence,J. et al. (2008). pg 26-34 & 60-65. Powell,R. 2nd ed. (2013). pg 31-37 & 53-60. Economics Today. Vol 20. March 2013.Why do we get confused by price elasticity of supply?
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3.1.2.5 The determination of equilibrium market prices
3.1.2.6 The interrelationship between markets
Prior knowledge: Knowledge of the determinants of supply and demand and different elasticities (parts of 3.1.2) is necessary.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what is meant by equilibrium, the factors affecting it, different relationships between markets and how this applies in the real world Skills Use of supply and demand diagrams to show the effects of changes in supply and/or demand plus accompanying logical analysis | Students should appreciate the variety of ways that markets could be linked and how changes in one could affect changes in others. They should be able to articulate this using appropriate economic terminology, e.g. joint demand (7 hours allocated) | Equilibrium price and output: Teacher-led explanation and presentation of the concept of equilibrium and explanation of market forces determining the price of goods and services. Equilibrium on schedules: Use of demand and supply schedules to identify equilibrium and manipulate statistics from previous lessons. (Stretch and challenge opportunity by manipulating statistics for more able students). Equilibrium on diagrams: Students transpose data from previous activities onto graph paper to identify equilibrium to corresponding schedules Disequilibrium: Students are introduced to government intervention in the form of maximum and minimum prices (although this will be analysed later) and terms such as excess demand or surplus in supply used Extension/contraction: Teacher-led explanation on the effects of shifts in curves and the resultant effect on the other curve Markets: Teacher-led presentation and use of real world examples found in newspapers to illustrate how events affect the equilibrium price in various markets. Understanding of terms such as joint demand, derived demand, composite demand Consumer and producer surplus: : Concepts initially introduced by teacher allowing students to identify the effects of changes in price on consumer and producer surplus Note that Consumer and Producer surplus is not on the AS Economics specification. As the first year of a two year A level course it could be taught at this point. Elasticity and equilibrium: the effects on revenue: The effects of elasticity using real world examples such as taxation on a good which has inelastic P.E.D. such as cigarettes. Use of past exam papers, eg AQA's ECON 1, to highlight issues Supply & Demand quiz ICT Quiz assessing knowledge gained, or teacher-led activity with students showing responses to questions on whiteboards Key terms: Summary of key terms from supply and demand section Ideas for differentiation and extension To learn what is meant by equilibrium, the factors affecting it, different relationships between markets and how this applies in the real world | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 45 -73 Anderton,A. 6th ed. (2015). pg 69-80 Lawrence,J. et al. (2008). pg 35-76 Powell,R. 2nd ed. (2013). pg 38-47 & 61-74 Tutor2u equilibrium Market Prices Tutor2u functions of the price mechanism, Tutor2u demand and supply quiz Demand and Supply Equilibrium on Financial Times Oil price volatility on financial times |
Note: By the end of this section, Students should be able to tackle most parts of the data response questions
3.1.3 Production, costs and revenue
Total time: 7 hours + 1 hour for assessment activities.
3.1.3.1 Production and productivity
3.1.3.2 Specialisation, division of labour and exchange
Prior knowledge: Possibly none but an awareness of ‘Economic methodology and the economic problem and (3.1.1) would be helpful, and/or ‘Price determination in a competitive market’ (3.1.2)
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn the difference between production and productivity and the importance of specialisation and a medium of exchange Skills Possibly basic calculations of productivity, although this could serve as an extension exercise | Students should appreciate both the advantages and disadvantages or limitations of specialisation (3 hours allocated) | Production: Teacher-led activities explaining the nature of production. Students to understand the conversion of the factor inputs into outputs and the nature of these outputs for example consumer non-durables and durables. Games could be used to illustrate production lines with different factor resources Productivity: A basic introduction to the concept of the output per input highlighting labour productivity as the most widely used. A list of jobs could be given where students identify a variety of methods of measuring productivity and the problems of measuring productivity in some occupations Specialisation: Allow students to develop an understanding of specialisation through different activities. A variety of games can be used to illustrate the concept of specialisation and the division of labour. One example is getting students to produce flags using raw materials such as card, felt tips and straws in varying group sizes and measuring the output per worker Diminishing returns clip: The concept of diminishing returns highlighted using “cleaning a dorm” clip Efficiency: Teacher-led presentation allowing students to develop an understanding of the different types of efficiency and the differences Ideas for differentiation and extension Investigation of examples of specialisation in a variety of real-world situations, including where firms have combined this with variety of tasks and responsibilities for teams | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 74-87Anderton,A. 6th ed. (2015). pg 22-25 Lawrence,J. et al. (2008). pg 77-80. Powell,R. 2nd ed. (2013). pg 75-78. |
3.1.3.3 Costs of production
3.1.3.4 Economies and diseconomies of scale
3.1.3.5 Average revenue, total revenue and profit
Prior knowledge: An awareness of ‘Economic methodology and the economic problem’ (3.1.1); ‘Price determination in a competitive market’ (3.1.2); and ‘Production and productivity’ (part of 3.1.3) would all be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the meanings and calculation of different types of costs and revenue and what is meant by profit To learn the difference between economies and diseconomies of scale and how they affect average cost Skills Calculations of profit and different types of cost and revenue; recognition of U-shaped short-run average cost curve and alternative long-run average cost curves Link between economies and diseconomies of scale with average cost | Students should understand the difference between the short run and the long run and be able to undertake a variety of cost and revenue calculations but only average cost curves need to be drawn Students should be able to categorise different economies of scale and be able to explain how economies and diseconomies affect the shape of the long-run average cost curve (4 hours allocated) | Costs: Students are to be able to identify types of cost, fixed and variable given a list of different types of cost. Identification of difficulties and explanation of semi-variable cost The short run and long run: Explanation of the concepts possibly with some links to elasticity Costs on diagrams: Students to be able to plot cost curves such as total variable, fixed and average total cost diagrammatically. Particular attention should be paid to average cost curves. A variety of data to be used enabling students to analyse different scenarios. Also the concept of the margin may be introduced here. Students should also identify the minimum efficient scale. Revenues: An understanding of revenue, total revenue and average revenue from firms operating in different markets such as a competitive firm charging each unit at the same price to a monopoly price discriminating. Profit: The nature of abnormal (supernormal) profit, subnormal profit and normal profit only. Students to be able to calculate profits from revenue and cost information. Economies of scale: Explanation of economies of scale and development of the different types and categories Economies of scale on diagrams: Explanation of the differences between the short run and long run and that the long run is made up of several short run curves. Students to be able to recreate information on diagrams Diseconomies of scale: Students to identify why firms may not always benefit from growing because of communication problems or issues with control Ideas for differentiation and extension Students could explore real-world examples where optimum size has changed in recent years Students could explore related concepts that they will meet in the A level such as the law of diminishing returns | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 87-118 Anderton,A. 6th ed. (2015). pg 91-96 Lawrence,J. et al. (2008). pg 80-86. Powell,R. 2nd ed. (2013). pg 78-88 Tutor2u presentation costs and revenues Tutor2u economies and diseconomies of scalecale Tutor2u key terms costs and revenues |
3.1.4 Competitive and concentrated markets
Total time: 6 hours + 1 hour for assessment activities
3.1.4.1 Market structures
3.1.4.2 The objectives of firms
Prior knowledge: Knowledge of ‘Production, costs and revenue’ (3.1.3) is necessary; and an awareness of ‘Economic methodology and the economic problem’ (3.1.1) and ‘Price determination in a competitive market’ (3.1.2) would be helpful
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what is meant by market structure and that firms may have different objectives Skills An appreciation that market structure and objectives determine the behaviour of firms – an evaluative point which could be used to extend evaluation skills | Students are only required to have a basic knowledge of this topic area. Traditional ‘theory of the firm’ diagrams are not required (2 hours allocated) | Structures: Teacher-led presentation of the “spectrum of competition”. Students to identify characteristics of each market. A table could be used with blanks for the different characteristics Real world firms: Students to identify where real world examples fall on the spectrum of competition Comparing structures comprehension: Students to read about how the different structures can be compared Firms objectives: Introduction of basic assumptions such as profit maximisation as a starting point but developing alternatives based upon stakeholder concepts and behaviour Ideas for differentiation and extension Investigation of real-world examples of firms with different objectives | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019)Anderton,A. 6th ed. (2015). pg 97-100 Lawrence,J. et al. (2008) pg6. Lawrence,J. et al. (2009). pg 17-23. Powell,R. (2014). pg 12-20. Competition & monopoly pres.tutor2u Economics Today. Vol. 21. Jan 2014.How to compare market structures
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3.1.4.3 Competitive markets
3.1.4.4 Monopoly and monopoly power
3.1.4.5 The competitive market process
Prior knowledge: Knowledge of ‘‘Price determination in a competitive market’ (1.2), ‘Production, costs and revenue’ (1.3), ‘Market structures’ and ‘The objectives of firms’ (parts of 1.4) is necessary and an awareness of ‘The economic problem and economic methodology’ (1.1) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what is meant by market structure and that firms may have different objectives Skills Calculation of concentration ratios and the use of simple diagrams to illustrate features of monopoly | Students are not required to use cost and revenue diagrams to illustrate perfect competition and monopoly but should appreciate the pros and cons of monopoly power and the ways in which firms can compete with each other (4 hours allocated) | Competitive markets: Students to complete a case study of an individual market which may be in perfect competition. Explanation of what makes a market competitive such as an absence of the barriers to entry Monopoly: Teacher-led activity explaining monopoly and market failure. Analysis of why firms may wish to gain monopoly power Advantages and disadvantages of monopoly: Student-focussed activity looking at costs and benefits of monopoly separating issues and attempting to apply to real life situations Concentration ratios: An introduction to market share and different methods of measuring market share (such as turnover or volume of sales). Explanation of concentration ratios with students carrying out calculations Monopoly power and supply: Students to be able to analyse monopoly power using simple supply and demand analysis Key terms: Summary of all key terms from production and market structure section Ideas for differentiation and extension Investigation of examples of a range of industries with different market structures, including how they have been affected by recent changes, such as the internet | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 120 - 162 Anderton,A. 6th ed. (2015). pg 98-106 Lawrence,J. et al. (2008). pg 85-86 & 96-97. Lawrence,J. et al. (2009). pg 52. Powell,R. 2nd ed. (2013). pg 117-128. |
3.1.5 The market mechanism, market failure and government intervention in markets
Total time: 15 hours + 4 hours for assessment/revision activities
3.1.5.1 How markets and prices allocate resources
Prior knowledge: Knowledge of ‘Price determination in a competitive market’ (3.1.2) is required and an awareness of economic methodology and the economic problem and (31.1) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the functions of the price mechanism and their role in addressing the basic economic problem Skills An opportunity to revisit skills learnt whilst studying supply and demand | Students should be able to link the functions of price to their earlier work on the basic economic problem and supply and demand (2 hours allocated) | The functions of price: This may have been covered prior to this section but now can be made explicit. Rationing, signalling and incentive should all be understood and now can be used to explain situations The allocation of resources: Students to recap on how markets often allocate resources in an efficient manner using the explanations of the functions of price Misallocation of resources: A basic consideration of why the market may not work efficiently or why government intervention may be required. Considering markets which may not work well using news sources Ideas for differentiation and extension Application to a variety of markets | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 222 – 226 Anderton,A. 6th ed. (2015). pg 107-109. Lawrence,J. et.al. (2008). pg 87-122. Powell,R. 2nd ed. (2013). pg 46-47. |
3.1.5.2 The meaning of market failure
3.1.5.3 Public goods, private goods and quasi-public goods
3.1.5.4 Positive and negative externalities in consumption and production
3.1.5.5 Merit and demerit goods
3.1.5.6 Market imperfections
3.1.5.7 An inequitable distribution of wealth
Prior knowledge: Knowledge of ‘Price determination in a competitive market’ (3.1.2) and ‘Competitive and concentrated markets’ (3.1.4) is required; and an awareness of ‘Economic methodology and the economic problem’ (3.1.1) and ‘Production, costs and revenue’ (3.1.3) would be helpful
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how and why market failure occurs Skills Use of supply and demand diagrams to compare market and socially optimum outcomes. Also, students should now be working on all parts of data response questions | Supply and demand analysis will be expected to analyse situations of market failure, where relevant, but MSC/MSB diagrams are not required (7 hours allocated) | Introduction to market failure: Teacher-led presentation of different forms of market failure and why markets may fail such as imperfect information Public goods: Presentation demonstrating the characteristics of public goods such as non-rival and non-excludable Students could possibly be given a list of goods and able to identify which are public(Stretch and challenge students could also explore the nature of quasi-public goods and difficulties in the characteristics) Private costs and benefits vs social costs and benefits: A basic understanding can be developed using examples such as selling off the school/college field for housing with students identifying the various costs and benefits Demerit goods: Students to identify which goods may be over-produced and over-consumed if left to free market forces making lists. Reasons why they are over-consumed could be explored. Links to the effects on society and negative externalities made Demerit goods diagrammatically: Students to be able to draw supply and demand diagrams illustrating free market or private optimal equilibriums in comparison to social optimums or socially desirable outcomes using a variety of real world examples Merit goods: Students to identify which goods may be under-produced and under-consumed if left to free market forces making lists. Reasons why they are under-consumed could be explored. Links to the effects on society and positive externalities made Merit goods diagrammatically: Students to be able to draw supply and demand diagrams illustrating free market or private optimal equilibriums in comparison to social optimums or socially desirable outcomes using a variety of real world examples. Public and merit good quizzes ICT: quizzes assessing knowledge gained, or, teacher- led activity with students showing responses to questions on whiteboards Market failure comprehension: Student exploration and consideration of free market principles in comparison to social optimal principles Negative and positive externalities in production: Linking earlier learning in consumption, students will be able to apply understanding to production situations. Newspaper articles may be useful drawing attention to issues(ICT opportunity: Students to create a report about how negative externalities in production are dealt with around the world) Inequality and the difference between income and wealth: Introducing the concept of inequality with teacher-led presentation. Use of clips to highlight current issues and discussion of the concepts of income (a flow concept) and wealth (a stock concept) Inequality comprehension: Students to consider why current trends are occurring and possible methods which would reduce inequality Imperfect information: Students consider the role of information gaps in making choices by being given various scenarios and information. This could be linked to rules of thumb in behavioural economics studied in the second year Teacher- led q and a activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Application to a wide range of real-world situations | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 233 -256 Anderton,A. 6th ed. (2015). pg 110-115 & 118-128 Lawrence,J. et al. (2008). pg 87-101. Powell,R. 2nd ed. (2013). pg 89-128. Tutor2u introduction to market failure Tutor2u Merit goods presentation Merit good and public good revision video.tutor2u Public goods and market failure revision quizlet activity.tutor2u Economics Today. Vol. 21. Nov 2013.Should museums and cathedrals charge entry fees? Negative externalities pres.tutor2u Positive externalities pres.tutor2u Wednesdays child inequality. Youtube Economics Today. Vol. 21. Jan 2014.Does the UK have a bigger gap between rich and poor than any other developed country? Market Failure, wind and solar costs of financial times Externalities and Traffic Congestion Luxemburg Tackles congestion on Financial Times |
3.1.5.8 Government intervention in markets
3.1.5.9 Government failure
Prior knowledge: Knowledge of ‘Economic methodology and the economic problem’ (3.1.1);, ‘Price determination in a competitive market’ (3.1.2); ‘Production, costs and revenue’ (3.1.3); ‘Competitive and concentrated markets’ (3.1.4); and ‘The market mechanism and market failure’ (part of 3.1.5) are all required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how and why governments intervene in markets and why this may not necessarily improve economic welfare Skills Analysis, both diagrammatic and written, together with evaluation and synthesis | Students should be able to draw upon all their knowledge of this module in order to analyse and evaluate the case for and against government intervention, alternative forms and the possibility of government failure in a variety of situations of market failure (6 hours allocated) | Methods of intervention: Students to identify current interventions in each form of market failure. Teacher to broadly classify each method into categories such as regulation, taxation, subsidy, state provision or information provision Subsidies: Teacher-led presentation of how subsidies work and the effects on the market. Links made to how diagrams can be used to illustrate the effect Indirect taxation: Teacher-led presentation of how taxation works and the effects on the market. Links made to how diagrams can be used to illustrate the effect Subsidy and taxation diagrammatically: Student-focussed activity demonstrating “per unit” taxation using real world examples such as the previous budget announcements on demerit goods or subsidies for bus travel in the local area Maximum and minimum pricing: Students to recap on previous learning of effects of the market of maximum and minimum pricing Government failure: Teacher-led presentation on the problems of government intervention. Students to consider the relative effectiveness of each form of intervention. Students to possibly consider improvements for each intervention Government intervention comprehension: Assessment of whether government intervention always leads to failure Government intervention quiz ICT: Government intervention quiz assessing knowledge gained, or, teacher- led activity with students showing responses to questions on whiteboards Key terms: Summary of all key terms from market failure section. Ideas for differentiation and extension Investigation into a variety of examples of government intervention both in the UK and elsewhere, including an assessment of their success | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019)Anderton,A. 6th ed. (2015). pg 129-140 & 81-86 Lawrence,J. et al. (2008). 102-122. Powell,R. 2nd ed. (2013). pg 129-151. Economics Today. Vol.18. Jan. 2011.Are government attempts to reduce the impact of climate change beneficial or harmful to UK firms? Economics Today. Vol. 17. Jan. 2010.Do Government attempts to overcome market failure always result in government failure? Govt. Intervention quiz.tutor2u Diesel Taxes on Financial Times |
3.2.1 The measurement of macroeconomic performance
Total time: 6 hours + 1 hour for assessment activities.
3.2.1.1 The objectives of government economic policy
3.2.1.2 Macroeconomic indicators
Prior knowledge: None for macroeconomics but it may be considered helpful to have studied the AS micro unit first
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the objectives and indicators used to measure economic performance Skills Bar charts, perhaps of economic growth in recent years and/or how to find the mean and median for figures over a period of time | Students should be aware that the government may have a range of objectives and different ways of measuring their performance, and that there could be short-run conflicts and different priorities according to the state of the economy (4 hours allocated) | Macroeconomics: Teacher-led presentation explaining the difference between microeconomics and macroeconomics The macroeconomic goals: Teacher- led activity to explain the four main macroeconomic goals and why they are desirable Current trends: Teacher to highlight resources and sources of information for the UK and other countries Macroeconomic goals ICT: Student activity researching the data for several countries demonstrating relative economic performance National Income: The use of GDP figures – teacher led activities explaining issues such as “per capita” and “real” The use of data: The limitations of the use of data when assessing performance of an economy. This can be linked to assessment activities such as comparisons or significant features using past exam data. Stretch and challenge opportunities in levels of mathematical challenge Ideas for differentiation and extension Research into latest figures and/or recent trends for each of the government’s main macroeconomic objectives | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 292 - 304 Anderton,A. 6th ed. (2015). pg 141-146, 150-157 & 6-11 Lawrence,J. et al. (2008). pg 125-137. Powell,R. 2nd ed. (2013). pg 169-179. Threadgold,A. Macroeconomics for AS. 3rd ed. Anforme. UK Economy at a glance on FT (Also links to other countries’ Economies) |
3.2.1.3 Use of index numbers
Prior knowledge: None necessarily but an understanding of the meaning of inflation (part of 3.2.1.1) and some economic knowledge generally would help considerably to provide appropriate contexts
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how index numbers are calculated and used Skills Calculation and interpretation of index numbers | Students should understand how index numbers are obtained and acquire a basic knowledge of how they are used plus related terminology (2 hours allocated) | Use of index figures: Simple calculations and analysis of data. Students to develop an understanding of the usefulness of data and the validity of making statements Calculating percentages: Students to calculate percentage changes using both index figures and raw data. The relative benefits and problems of both can be analysed (Stretch and challenge opportunity: calculating percentages using more difficult or obscure data) Ideas for differentiation and extension Students could explore a wider range of contexts in which index numbers are used and/or find out more about price indices | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 307 - 313Anderton,A. 6th ed. (2015). pg 6-11 Lawrence,J. et al. (2008). pg 132-133. Powell,R. 2nd ed. (2013). pg 242-244. |
3.2.2 How the macroeconomy works: the circular flow of income, AD/AS analysis, and related concepts
Total time: 16 hours + 2 hours for assessment activities.
3.2.2.1 The circular flow of income
Prior knowledge: None necessarily but it may be helpful to have studied the objectives of government economic policy and macroeconomic indicators (3.2.1) first
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what is meant by the circular flow of income, injections and withdrawals Skills Calculation of percentage changes in income, in both nominal and real terms | Students do not need a detailed knowledge of national income accounts but should understand the meaning and significance of national income and how it is affected by changes in injections and withdrawals (2 hours allocated) | The circular flow: Teacher-led activity demonstrating the circular flow and relating to the flow of money and the flow and returns to factor inputs Injections and leakages: Student-led activity identifying factors which may alter the size of the flow and what may change the size of each of the injections and leakages The multiplier: An early reference to the multiplier may be suggested to explain how an injection could lead to a more than proportionate increase in the size of the flow Circular flow quiz ICT: quiz assessing knowledge gained, or, teacher-led activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Investigation into recent national income figures, in real and nominal terms, for the UK and/or elsewhere | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Pg 321 - 327 Anderton,A. 6th ed. (2015). pg 147-149 Lawrence,J. et al. (2008). pg 138-149. Powell,R. 2nd ed. (2013). pg 207-208. |
3.2.2.2 Aggregate demand (AD) and aggregate supply (AS) analysis
Prior knowledge: Knowledge of 'The measurement of macroeconomic performance’ (3.2.1), ‘The circular flow of income’, together with the concepts of aggregate demand and aggregate supply (parts of 3.2.2) is necessary
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To be able to use AD/AS analysis, in both written and diagrammatic form, to help to explain a range of macroeconomic problems and issues Skills Drawing accurately labelled AD/AS diagrams to show the effects of changes in AD and/or AS on the macroeconomy, in the short run and long run | Depending on what has been covered at this stage, students should be able to use AD/AS diagrams to illustrate a range of situations. There will be further opportunities to reinforce and extend this as more of the course is covered (5 hours allocated) | Combining AD and AS: Students to use diagrammatical analysis to bring AD and AS together Effects on the macroeconomic goals: Students to be given different scenarios and asked to explain the effects on GDP, unemployment, inflation and possible effects on imports AD/AS comprehension: Student activity developing understanding of AD/AS Economics in the news: Using a variety of newspaper articles or news sources to demonstrate the effects diagrammatically Key terms: Summary of key terms from first macroeconomic topics of economic goals and AD/AS Ideas for differentiation and extension Students could investigate further applications of AD/AS analysis, including recent examples relating to the UK economy | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) Anderton,A. 6th ed. (2015). pg 189-197 Lawrence,J. et al. (2008). pg 150-160. Powell,R. 2nd ed. (2013). pg 212-225. Economics Today Vol.19 March 2012. An introduction to aggregate demand and aggregate supply analysis.
Economics Help Aggregate Demand
Economics Help Aggregate supply
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3.2.2.3 The determinants of aggregate demand
3.2.2.4 Aggregate demand and the level of economic activity
Prior knowledge: None necessary but an understanding of ‘The measurement of macroeconomic performance’ (3.2.1) and ‘The circular flow of income’ (3.2.2.1) would help
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what is meant by aggregate demand, its components and how it influences the level of economic activity Skills Drawing AD curves with appropriate axes labels and interpretation of changes in different components of AD; a basic understanding of the multiplier and accelerator processes | Students do not need to undertake accelerator calculations or multiplier involving the MPC but should appreciate that a change in any component of AD is likely to change AD by a greater amount and affect the level of economic activity (5 hours allocated) | Aggregate demand: Teacher-led presentation explaining “the sum of all demand” and identifying the components. Students to be able to transfer this understanding to basic diagrams building on micro understanding. Introduction of C+I+G+(X-M) Consumption: Explanation of consumption. Students to identify factors affecting consumption and changes in consumption over time such as changes in confidence. Students to understand the concept of the savings ratio Investment: Teacher-led presentation on forms of investment highlighting different types of investment such as physical capital and human capital and also issues such as gross and net. Students should be aware that investment not only increases AD but also LRAS. Students could identify why investment may or may not occur Investment comprehension: Students to read articles on domestic and foreign investment Government spending: A very brief identification of the main areas of government spending using highlights or data from the previous budget. Government spending is likely to be covered in more detail in fiscal policy Net trade: Again this is likely to be studied in much more depth in the trade topic but a look at the current trade data or newspaper articles may be useful AD diagrams: Early links to be made to changes in any component altering AD and also the effects of government policy Multiplier diagrammatically: Students to demonstrate the effect of the multiplier on AD Aggregate demand / multiplier quiz ICT: Quiz assessing knowledge gained, or, teacher-led activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Students could investigate the significance of each of the components of AD, and perhaps compare this with other countries | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P325 - 355 Anderton,A. 6th ed. (2015). pg 171-175, 158-170 & 176-180 Lawrence,J. et al. (2008). pg 150-153 & 156-160. Powell,R. 2nd ed. (2013). pg 212-225 Aggregate demand presentation on Tutor2u Economics Today. Vol. 17. March 2010. What economic effects may result from an increase in foreign direct investment into an economy?
The Multiplier – Economics online
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3.2.2.5 Determinants of short-run aggregate supply
3.2.2.6 Determinants of long-run aggregate supply
Prior knowledge: Knowledge of Aggregate demand (part of 3.2.2) is necessary. Also an awareness of ‘The measurement of macroeconomic performance’ (3.2.1) and ‘The circular flow of income (3.2.2.1) would help
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what is meant by aggregate supply and what affects short-run, as opposed to long-run, aggregate supply Skills Drawing AS curves, both for short run and long run | At AS level, students should assume that the long-run aggregate supply curve is vertical (4 hours allocated) | Aggregate supply: Teacher-led presentation explaining the meaning of aggregate supply identifying the difference between short run and long run Shifts in short run aggregate supply: Brief teacher-led activity explaining why SRAS shifts to the left if things such as money wages or the cost of the other factor inputs increase Short-run aggregate supply comprehension: Student-led activity considering why the SRAS shifts. Students to evaluate the likelihood of events. Long-run aggregate supply: An explanation of what determines the “productive potential” or “capacity” of the economy. Simple links can be made to microeconomic principles expanded to the macroeconomy Diagrammatical analysis: Teacher-led explanation of the shape of both curves and the Keynesian aggregate supply curve. Aggregate supply quiz ICT: Quiz assessing knowledge gained, or, teacher led activity with students showing responses to questions on whiteboards. Ideas for differentiation and extension Students could investigate the Keynesian AS curve | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P348 - 355 Anderton,A. 6th ed. (2015). pg 181-188 Lawrence,J. et al. (2008). pg 153-160. Powell,R. 2nd ed. (2013). pg 212-225. Aggregate supply presentation tutor2u Economics Today. Vol. 21. Sep 2013.What are the determinants of short-run aggregate supply? |
3.2.3 Economic performance
Total time: 17 hours + 2 hours for assessment activities
3.2.3.1 Economic growth and the economic cycle
Prior knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1) and ‘How the macroeconomy works: the circular flow of income, AD/AS analysis, and related concepts’ (3.2.2) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how and why there are fluctuations in economic activity and to learn more about economic growth Skills Use of AD/AS, trade cycles and production possibility curve diagrams to illustrate economic growth and output gaps | Students should recognise the features of different phases of the economic cycle Students should be able to illustrate the difference between, and causes of, short-run and long-run growth (4 hours allocated) | Economic growth: Teacher-led presentation explaining the difference between short-run and long-run economic growth. Students to demonstrate both diagrammatically The trade cycle: Teacher-led presentation and diagrammatical analysis. Teacher to source news clips of recent economic activity to explain the current position on the trade cycle Characteristics of trade cycles: Student activity highlighting the various points of the trade cycle then identifying the characteristics of each stage of the cycle on a grid. What causes recessions and recoveries comprehension: Student-focussed activity analysing the causes of cycles Other countries ICT opportunity: Teacher to carefully select several countries at different points in the trade cycle Standards of living: Teacher-led presentation on what determines living standards. Student activity explaining what they believe good standards of living are or what are the basic needs of life ICT opportunity: Research into the Human Development Index and how different countries are faring in comparison to growth data Costs and benefits of growth: Teacher-led presentation on the costs and benefits of economic growth possibly using clips from developing economies Links to other diagrams: Allow students to link information on AD/AS diagrams to the trade cycle and PPFs. Create a sheet demonstrating similarities Economic growth ICT: Quiz assessing knowledge gained, or, teacher-led activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Investigation into recent economic growth figures, including a comparison with a variety of other countries | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P355 - 370 Anderton,A. 6th ed. (2015). pg 198-212 Lawrence,J. et al. (2008). pg 172-181. Powell,R. 2nd ed. (2013). pg 180-195. Standard of living pres.tutor2u Costs and benefits of growth pres.tutor2u Economics Today. Vol. 19. Sep 2011.Measuring economic growth Economics Today. Vol. 18. Sep 2010. What causes recessions and recoveries?
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3.2.3.2 Employment and unemployment
Prior knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1) and ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (3.2.2) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the meaning and causes of unemployment Skills Use of AD/AS diagram to illustrate demand-deficient (cyclical) unemployment and conversion of numbers unemployed into percentages | Students should recognise that there are different causes of unemployment and be able to classify them as demand-side or supply-side (4 hours allocated) | Unemployment: Students introduced to the topic of unemployment through the use of local news or BBC news clips Types of unemployment: Teacher-led presentation on the types of unemployment, causes and solutions Measuring unemployment comprehension: Student reading activity looking at the difference between the claimant count and ILO measures. Students to evaluate the uses of statistics Effects of unemployment: Students to identify the costs and benefits on a grid for the individual, society, firms and the government. Students to use articles or news programmes to develop further understanding Unemployment types and solutions: Students to be given a variety of situations and use “symptoms, diagnosis, prescription” techniques to suggest solutions to problems ICT opportunity - UK Unemployment: Students to produce a short report on the current situation regarding unemployment analysing the current state of the economy and evaluating current policies (Stretch and challenge – some Students to include data and comparisons of unemployment over time or between countries). Unemployment quiz ICT: Quiz assessing knowledge gained, or, teacher-led activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Investigation into different UK-related unemployment statistics, e.g. male/female, regional, etc | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P370 - 384 Anderton,A. 6th ed. (2015). pg 221-228 Lawrence,J. et al. (2008). pg 184-191. Powell,R. 2nd ed. (2013). pg 226-240. Economics Today Vol. 19. Nov 2011. Measuring unemployment Economics Today. Vol. 17. March 2010. What impact does unemployment have on the UK economy? |
3.2.3.3 Inflation and deflation
Prior Knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1) and ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (3.2.2) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the meaning and causes of inflation and what is meant by deflation Skills Understanding of the difference between slower percentage rates of increase as opposed to percentage decreases in the context of inflation and deflation | Students should appreciate that deflation is when the general/average price level is falling and that inflation is caused by demand-pull and cost-push influences (4 hours allocated) | Inflation: Teacher-led presentation of inflation and the types of inflation and discussion of how inflation affects the UK and other economies ICT opportunity- Measuring inflation: Students to investigate the differences between the CPI and RPI and the concept of the basket of goods. Students to include a list of “what’s in and what’s out” of the basket Inflation data: Using data such as the inflation rates over the past 10 years, Students compare trends of RPI and CPI Inflation diagrams: Students to demonstrate the effects of cost-push and demand-pull inflation diagrammatically and explain the possible causes of each. Inflation and government policy: An introduction to how inflation can be controlled using government policy which will be analysed in more depth later. Possible use of clips to illustrate this Inflation quiz ICT: Quiz assessing knowledge gained, or, teacher led activity with students showing responses to questions on whiteboards Deflation: A brief explanation of deflation and the experiences of economies in tackling deflation. Ideas for differentiation and extension Investigation into inflation figures in different countries, to find examples of deflation and hyperinflation, and/or the range of UK inflation rates in recent years | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P383 - 397 Anderton,A. 6th ed. (2015). pg 213-220 Lawrence,J. et al. (2008). pg 182-184 & 190-191. Powell,R. 2nd ed. (2013). pg 241-254. Inflation monster ECB clip.Youtube.
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3.2.3.4 The balance of payments on current account
Prior knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1) and ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (3.2.2) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the meaning, significance and influences on the balance of payments on current account Skills Calculations of the balance of trade and the balance of payments on current account | Students should appreciate the importance of international trade for the UK, and that the current account is only part of the balance of payments but they do not need to know about the other parts (3 hours allocated) | Trade: An introduction to trade possibly looking at the UK’s major export and import partners and the value of trade with other countries. Teacher-led presentation on why countries trade including the costs and benefits The EU: Brief activity of students identifying EU members – teacher-led explanation of what membership of the EU has done in terms of trade volumes The balance of payments: Students to develop an understanding of the trade in goods and services and understand the importance of the current account in terms of leakages or injections to or from the circular flow Balance of payments data: Students to calculate net trade flows and compare trade flows over time. Past exam data may be useful for this Exchange rates presentation: Teacher-led explanation of exchange rate systems and the importance of changes in exchange rates. Students to understand terms such as appreciation/depreciation or stronger/weaker. Use of numerical examples would be helpful Current account surpluses/deficits: Students to analyse and evaluate reasons why the UK has had a deficit in the short, medium and long term. (Stretch and challenge: Students to research into why other countries record surpluses). Balance of payments and Exchange rate ICT: Quiz assessing knowledge gained, or, teacher-led activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Investigation into recent figures and trends in the UK’s balance of payments on current account | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P527 - 527 Anderton,A. 6th ed. (2015). pg 229-233 Lawrence,J. et al. (2008). pg 192-203. Powell,R. 2nd ed. (2013). pg 255-266. Smith,C. 5th ed. International Trade and Globalisation. Anforme. Balance of Payments presentation tutor2u Exchange rate presentation tutor2u Economics Today Vol 19. January 2012.Current account deficits. Exchange Rates and Brexit Financial Times Trade, Balance of Payments and Export Services on Financial Times |
3.2.3.5 Possible conflicts between macroeconomic policy objectives
Prior knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1) and ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (3.2.2) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how and why there may be conflicts between macroeconomic policy objectives Skills Use of AD/AS/LRAS models to analyse causes of and reconciliation of (later) possible conflicts | Students should appreciate both how conflicts may occur and how economic policies may help to reduce the possibility of conflict (2 hours allocated) | Trade-offs: Teacher-led presentation as to why trade-offs occur in the macroeconomy. Trade-offs diagrammatically: Use of diagrams to illustrate improvements in one macroeconomic goal and worsening of another. Students could possibly be introduced to the short run Phillips curve as a means of explaining trade-offs although this is not needed until the second year of study (A-level) and will not be examined in the AS examination Supply-side considerations: Brief introduction of supply-side policy as a method of reducing the problems of trade-offs. This will be analysed in more detail later Ideas for differentiation and extension Investigation to find evidence of relationships/trade-offs between different macroeconomic policy objectives in the UK in recent years | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P397 - 404 Anderton,A. 6th ed. (2015). pg 260-264 Lawrence,J. et al. (2008). pg 127,130. Powell,R. 2nd ed. (2013). pg 171. |
3.2.4 Macroeconomic policy
Total time: 12 hours + 4 hours for assessment/revision activities
3.2.4.1 Monetary policy
Prior knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1), ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (3.2.2) and ‘Economic performance’ (3.2.3) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what monetary policy involves, its effects, and the role of the Bank of England Skills AD/AS analysis plus an appreciation that there could be conflicting factors contributing to interest rate decisions which may involve trade-offs to reach a decision | Students should understand the role of monetary policy in achieving the current objectives of government but do not need to know how interest rates or exchange rates are determined (4 hours allocated) | Introduction to monetary policy: Presentation of UK monetary policy. This may have been touched upon in previous lessons Interest rates: Student activities explaining logical steps of reasoning of the transmission mechanism. This could be done using laminated answers to past exam questions cut into separate sentences and for students to arrange in correct order The money supply: Teacher- led explanation of what money is and types of money. A detailed understanding of money is not required but useful as a starting point Monetary policy diagrammatically: Students to be able to illustrate how changes in monetary policy affect AD (and possibly AS) with analysis and evaluation of the effectiveness of policy Monetary and fiscal policy comprehension: Students to understand the ways in which governments can intervene in markets ICT opportunity - The Bank of England: Students to research the functions and roles of the Bank of England and the Monetary Policy Committee (MPC). Explanation of the targets of monetary policy Monetary policy ICT: Quiz assessing knowledge gained, or, teacher-led activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Use of the most recent Inflation Report to learn more about recent and likely future trends in the economy | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P428 - 441 Anderton,A. 6th ed. (2015). pg 244-249 Lawrence,J. et al. (2008). pg 204-216. Powell,R. 2nd ed. (2013). pg 267-279. Economics Today Vol. 19. Jan 2012. An introduction to monetary and fiscal policy. |
3.2.4.2 Fiscal policy
Prior knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1), ‘How the economy works: the circular flow of income, AD/AS analysis, and related concept’s (3.2.2) and ‘Economic performance’ (3.2.3) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn what fiscal policy involves and its effects Skills AD/AS analysis to illustrate the effects of different fiscal policy changes | Students should recognise that fiscal policy can be used to affect aggregate demand and aggregate supply, as well as parts of the economy. They should appreciate that governments may unbalance the budget but are not required to consider the pros and cons of this (4 hours allocated) | Fiscal policy introduction: A suitable starting point may be to identify the major areas of government spending or major taxes. Students to identify why spending in these areas is important. Fiscal policy presentation: Teacher-led activities explaining fiscal policy and the differences between automatic stabilisers and discretionary policy The budget: View clips of recent budget statement summaries or opposition responses. Teacher-led explanation of budget surplus and deficit. Students may be introduced to the concepts of structural deficits Fiscal policy and diagrams: Student analysis of the effects of altering the different areas of fiscal policy. Students to evaluate the merits and drawbacks of increasing/decreasing government spending and increasing/decreasing taxation The national debt: Explanation of the national debt using recent budget data. Comparisons of the data can be made Evaluating the Keynesian perspective of intervention: Students to evaluate different perspectives over whether intervention is appropriate. Use of Keynes v Hayek clip Ideas for differentiation and extension Further research into recent fiscal changes – what and why; plus revisiting micro diagrams to show the effects of indirect taxes Analysis of the most recent budget/pre-budget reports | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P449 - 479 Anderton,A. 6th ed. (2015). pg 234-243 Lawrence,J. et al. (2008). pg 217-225. Powell,R. 2nd ed. (2013). pg 280-294. |
3.2.4.3 Supply-side policies
Prior knowledge: Knowledge of ‘The measurement of economic performance’ (3.2.1), ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (3.2.2) and ‘Economic performance’ (3.2.3) is required
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the meaning and effects of a variety of supply-side policies Skills AD/AS /LRAS analysis to illustrate the effects of supply-side measures/ improvements | Students should appreciate that supply-side improvements may occur independently of government and how these and supply-side policies can affect the government’s objectives (4 hours allocated) | Introduction to supply side policy: Teacher-led presentation of supply-side policy. These policies may have been considered earlier but now more detail can be gained. Distinguish between interventionist and laissez-faire approaches Supply-side diagrammatically: Students to be able to analyse the effects on the macroeconomic goals of supply side policy using diagrams. This may lead to discussions of effectiveness of policy Productivity: Teacher-led presentation of productivity. Students to evaluate the effectiveness of policies designed to improve productivity Supply-side policy comprehension: Students to read articles on supply-side policy and evaluate problems of supply side policy Supply-side policies and policies ICT: Quiz assessing knowledge gained, or teacher-led activity with students showing responses to questions on whiteboards Ideas for differentiation and extension Investigation into recent supply-side policies | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) P478 - 489 Anderton,A. 6th ed. (2015). pg 250-259 Lawrence,J. et al. (2008). pg 226-235. Powell,R. 2nd ed. (2013). pg 295-305. Supply side policy pres.tutor2u Economics Today. Vol 20. March 2013. The use of supply side policies in managing the economy. Economics Today. Vol. 18. Nov. 2010.How can supply side policies be used to achieve economic growth?
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Textbook references
Powell, R. & Powell, J. (2015). AQA A-level Economics 1 Hodder.
Anderton, A. (Edited by Gray, D.) (2015). Economics 6th Edition Anderton press.
Lawrence, J. et al. (2008). AQA Economics AS. Nelson Thornes.
Lawrence, J. et al. (2009). AQA Economics A2. Nelson Thornes.
Powell, R. (2013). AQA Economics AS 2nd ed. Phillip Allan.