Scheme of work: year 2 – A-level
The following scheme of work assumes prior knowledge and understanding of the AS level content and builds on the skills acquired in Year 1.
The order of this scheme of work is not prescriptive and there are many alternative ways in which the content could be organised. The timings indicated offer only an approximate guide as to how long a section might require and the time allocated for ‘assessment activities’ offers additional flexibility. 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 that the AS content of the course has been covered as the first year of a two-year A-level. It also assumes that the additional A-level content is taught for four hours per week, approximately 134 hours, including time for assessment/ revision.
Scheme of work
Where there is just one teacher delivering this subject, the scheme of work assumes microeconomics (Section 4.1) is taught first followed by macroeconomics (Section 4.2). With two teachers delivering the subject, Teacher 1 could teach the microeconomics alongside Teacher 2 teaching the macroeconomics.
4.1.2 Individual economic decision-making
Total time: 7 hours plus one hour for assessment activities
4.1.2.1 Consumer behaviour
4.1.2.2 Imperfect information
4.1.2.3 Aspects of behavioural economic theory
4.1.2.4 Behavioural economics and economic policy
Prior knowledge: Knowledge of ‘Price determination in a competitive market’ (AS section 3.1.2/A level section 4.1.3) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how and why individual decision-making may support or conflict with conventional demand theory Skills Application of utility theory plus reinforcement of supply and demand analysis. | Students should be able to appreciate that the actions of individuals in certain circumstances may suggest a different outcome from the traditional theory of supply and demand. A variety of examples could be used to support these ideas. (7 hours allocated) | Introduction to behaviour and decision making: Teacher-led presentation of what behaviour is and influences on behaviour linking to consumption theories. Rationality: Students to analyse the concept of the rational economist and the influences which possibly make normal everyday interactions “irrational”. Utility and marginal utility: Use of tables and data to explain utility and marginal utility including maximisation behaviour. This can be linked to demand theory. Utility comprehension: Using economic journals or articles to develop deeper understanding of behaviour and information. Students to evaluate the usefulness of theories to understand human behaviour. Information failure and asymmetric information: Students to develop an understanding of simple information failures such as in the consumption of demerit goods. Aspects of behavioural theory: Teacher-led presentation explaining rules of thumb and anchoring and how social norms affect decision making. Students to try exercises or experiments to see how behaviour changes for each person. Government intervention: Students to understand how policymakers can influence individual decisions using concepts such as nudge theories. Students to develop an understanding of choice architecture and framing. Ideas for differentiation and extension Research into the activities of the ‘nudge unit’ and/or reading of a related book, such as ‘Nudge’ by Sunstein and Thaler. | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg33- 45 Anderton,A. Economics 6th edition Andertonpress (2015). pg 32-35 & 87-90 Sloman,J. et al. 8th ed. (2012). pg 124-128. Perloff,J. 6th ed. (2011). pg 124-127. Pindyck,R. et al. 8th ed. (2012). pg 189-197. Dan Ariely: Behavioural Economics. Youtube Economic Review. Vol. 29. Sep. 2011. Why do people make bad decisions? Big Think with Richard Thaler. Youtube Economic Review. Vol. 27. April 2010. Beyond homo economicus. Economic Review. Vol. 30. April 2013. Who’s who in economics: George A Akerlof Economic Review. Vol. 30. April 2013. Asymmetric information Economic Review. Vol. 30. Nov. 2012. Overconfidence: how does it affect decision-making? Dan Kahneman on Bias. Socialsciencespace. Website Behavioural economics – seven principles for policy-makers. Neweconomicfoundation. Website |
Note: Section 4.1.3 Price determination in a competitive market is covered in Year 1 as part of the AS course
4.1.4 Production, costs and revenue
Total time: 8 hours + 1 hour for assessment activities.
Prior knowledge: This section builds on ‘Production, costs and revenue’ (AS section 3.1.3).
4.1.4.1 Production and productivity (covered in 3.1.3.1 in AS)
4.1.4.2 Specialisation, division of labour and exchange
(covered in 3.1.3.2 in AS)
4.1.4.3 The law of diminishing returns and returns to scale
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the possible relationships between inputs and output, in a technical sense, both in the short run and long run Skills Calculation of different types of returns and the ability to draw and interpret the resulting curves | This section looks at the technical relationship between inputs and output and the consequent impact of this on the costs of firms (4 hours allocated) | Short run and long run: Teacher-led presentation on the differences between the short run and the long run. Students to link issues from the first year including specialisation and factors of production. Inputs and output: Students to link the concept of specialisation to production possibly considering “Adam Smith’s pin factory” example or other suitable local examples such as waiters/waitresses in restaurants. Total product, average product, marginal product: Students introduced to the concept of the margin. Numerical examples can be used to illustrate concepts. Product curves diagrammatically: Students to recreate numerical examples using diagrams or plotting points on graph paper. (Stretch and challenge opportunity: extend maths skills with more complex data). Ideas for differentiation and extension Research into the ideas of Thomas Malthus and the extent to which food production has kept pace with population growth over time. | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 83-101 Anderton,A. 6th ed. (2015). pg 265-273 Lawrence,J. et al. (2009). pg 4-16. Powell,R. (2014). pg 13-14 & 23-24. |
4.1.4.4 Costs of production (partly covered in AS)
4.1.4.5 Economies and diseconomies of scale (partly covered in AS)
4.1.4.6 Marginal, average and total revenue (partly covered in AS)
4.1.4.7 Profit (partly covered in AS)
4.1.4.8 Technological change
Prior knowledge: Knowledge of AS ‘Production, costs and revenue’ (AS section 3.1.3/rest of A level section 4.1.4) is necessary.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To reinforce and extend knowledge and understanding of the different costs and revenues, and how they can be affected by technological change Skills Calculation of a variety of costs and revenues, and the ability to draw and interpret the resulting curves | This section builds on prior/AS knowledge and understanding of some costs and revenues and extends the ideas to include a wider range of concepts, plus their interpretation and application (5 hours allocated) | Revenue: Teacher-led presentation of revenue. This can be linked to supply and demand analysis. Marginal revenue can be introduced but this will be encountered again in the perfect compaction and monopoly. Cost curve recap: Learns to recreate short run and long run cost curves from the first year and recap on economies and diseconomies of scale. Teacher-led presentation on costs. Total cost, average cost and marginal cost: Students to develop an understanding of the concepts of different costs including spreading fixed costs across greater output. Introduction of marginal costs using numerical examples. (Stretch and challenge opportunity: use of more complex examples). ICT opportunity – costs and revenue quiz (tutor2u) or teacher-led activity with students showing responses to questions on whiteboards. Internal and external economies of scale and the minimum efficient scale: Explanation and development of the concepts with students analysing issues diagrammatically. The growth of firms: Teacher-led presentation of why firms grow in size – this could be linked to why firms may wish to shrink. Profits: The nature and types of profit and how profit can be used in firms. Students to evaluate how profits can be used in a business. Ideas for differentiation and extension Research into how technological change has impacted on costs in a variety of real-world markets | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 83-101 Anderton,A. 6th ed. (2015). pg 273-288 & 361-366 Lawrence,J. et al. (2009). pg 5-28. Powell,R. (2014). pg 13-14, 21-43 & 82-97. Economics Today. Vol. 20. Nov 2012. External economies of scale
Economics Today. Vol. 21. Nov 2013. How important are economies of scale? Economies of Scale, Economics Help |
4.1.5 Perfect competition, imperfectly competitive markets and monopoly
Total time: 14 hours + 1 hour for assessment activities.
4.1.5.1 Market structures
4.1.5.2 The objectives of firms
4.1.5.3 Perfect competition
4.1.5.4 Monopolistic competition
Prior knowledge: Knowledge of ‘Production, costs and revenue’ (A level section 4.1.4) is necessary. This also builds on ‘Competitive and concentrated markets’ (AS section 3.1.4). Knowledge and understanding of ‘Price determination in a competitive market’ (AS section 3.1.2/A level section 4.1.3) would also be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about how and why the conduct and performance of firms may differ in a variety of market structures and situations and how price and output are determined when there are many small firms in the market Skills Ability to draw and interpret a variety of diagrams to show price and output determination in perfect and monopolistic competition | Students should appreciate that there is a spectrum of competition and a range of objectives, influencing the behaviour and performance of firms, both in theory and practice (6 hours allocated) | Market structure: Introduce market structures with the spectrum of competition. Students to identify where a range of companies fall on the spectrum. Performance and behaviour: Teacher-led presentation explaining how performance and behaviour can affect firms. Identification of types of business e.g. Sole trader to PLC and ownership concepts affect variables. The objectives of firms: Students to identify various objectives and analyse the importance to each market – links can be made to the divorce of ownership in terms of firms’ objectives being different from individuals. Perfect competition: Teacher-led presentation explaining the development of the model of perfect competition. A development of the characteristics of perfect competition. Students to use concepts learnt earlier such as cost and revenue curves. Barriers to entry: A development of the concept of barriers to entry using presentations or real life examples from the news. Monopolistic competition: Teacher-led explanation of the concept of monopolistic competition with students recreating diagrams and analysis of real life examples. Competition comprehension: Students to develop further understanding of concepts using news articles or journals. ICT opportunity – Perfect competition quiz (tutor2u) or teacher-led activity with students showing responses to questions on whiteboards. Ideas for extension and differentiation Research into the behaviour and performance of a variety of small real-world firms - does perfect competition exist? | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 119-123 Anderton,A. 6th ed. (2015). pg 289-302, 329-335 & 312-315 Lawrence,J. et al. (2009). pg 29-39. Powell,R. (2014). pg 44-63. Structure and performance pres.tutor2u Perfect competition pres.tutor2u Monopoly and Barriers pres.tutor2u Monopolistic competition pres.tutor2u Economics Today Vol.21 March 2014. Do firms always profit maximise? Economics Today Vol.19 March 2012. What is the difference between monopolistic competition and monopoly? Economic Review. Vol. 29. Nov. 2011. Monopolistic competition Monopolistic Competition Tutor2u UK coffee market and barriers to entry on the Financial Times |
4.1.5.5 Oligopoly
4.1.5.6 Monopoly and monopoly power
4.1.5.7 Price discrimination
4.1.5.8 The dynamics of competition and competitive market processes
4.1.5.9 Contestable and non-contestable markets
4.1.5.10 Market structure, static efficiency, dynamic efficiency and resource allocation
4.1.5.11 Consumer and producer surplus
Prior knowledge: Knowledge of ‘Production, costs and revenue’ (A level section 4.1.4) is necessary. This section builds on ‘Competitive and concentrated markets’ (AS section 3.1.4) and the rest of ‘Perfect competition, imperfectly competitive markets and monopoly (A level section 4.1.5 – see above) is necessary. Knowledge and understanding of ‘Price determination in a competitive market’ (AS section 3.1.2/A level section 4.1.3) would also be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about how and why the conduct and performance of firms may differ in concentrated markets and how this could be affected by competition over time Skills Ability to draw and interpret a variety of diagrams to show possible outcomes in concentrated markets | Students should appreciate that the market power of firms in concentrated markets will be affected by a number of factors (8 hours allocated) | Oligopoly: An introduction to the concept of oligopoly with consideration of the characteristics of the market. Students to develop an understanding of the concept of interdependence and collusive and non-collusive. Government involvement in oligopolies: Students to develop an understanding of competition laws and regulation. ICT opportunity: Investigate recent competition laws and rulings by the competition authorities in the UK and EU. Oligopoly diagrammatically:Development of the Sweezy kinked demand curve and understanding of price and non-price competition. Tacit behaviour can also be linked. Monopoly: Teacher-led introduction to the concept of monopoly with students identifying the characteristics with possible contrasts to other market structures. Monopoly diagrams: Development of the monopoly diagram drawing on previous learning. Concepts of efficiency can be linked to outputs and prices. Pricing strategies: Learners to develop understanding of pricing strategies such as predator or limit pricing and how barriers can be strategically created by monopolies. Contestable markets: Students to evaluate how contestability affects actions in various markets and why firms may or may not be dynamically efficient. Efficiency: A detailed analysis of types of efficiency and how each structure achieves (or doesn’t achieve) each type of efficiency. Students to develop an understanding of why each structure may or may not be desirable. ICT opportunity – Monopoly and efficiency quizzes (tutor2u) or teacher-led activity with students showing responses to questions on whiteboards.
Producer and consumer surplus: Recap of prior learning and linking of consumer and producer surplus concepts to market structure. Ideas for extension and differentiation Research into the behaviour and performance of a variety of real-world firms - are they profit maximising? | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 149-155 Anderton,A. 6th ed. (2015). pg 316-328, 303-311 & 336-352 Lawrence,J. et al. (2009). pg 40-75. Powell,R. (2014). pg 64-81. Oligopoly collusion pres.tutor2u Economics Today. Vol. 19. Sep 2011. What policies can be used to stop firms in an oligopoly colluding? Natural monopolies and their regulation on the financial Times Economics Today. Vol 18. Jan. 2011. Predator pricing Price discrimination pres.tutor2u Economic Review. Vol. 29. Sep. 2011. Price discrimination: university tuition fees Contestable markets pres.tutor2u Economics Today. Vol. 18. Sep. 2010. How contestable is the market for holiday and leisure travel? Economics Today. Vol. 20. Sep 2012. Producer and consumer surplus. |
4.1.6 The labour market
Total time: 12 hours + 1 hour for assessment activities.
4.1.6.1 The demand for labour, marginal productivity theory
4.1.6.2 Influences on the supply of labour to different markets
4.1.6.3 The determination of relative wage rates and levels of employment in perfectly competitive labour markets
Prior knowledge: Knowledge of ‘Price determination in a competitive market’ (AS section 3.1.2/A level section 4.1.3), ‘Production, costs and revenue’ (A level section 4.1.4) and ‘Perfect competition, imperfectly competitive markets and monopoly’ (A level section 4.1.5) is necessary.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about influences on the demand and supply of labour and how wage rates and levels of employment are determined in perfectly competitive labour markets Skills Application of supply and demand theory to labour markets, including diagrams and elasticity | Students should appreciate that all real-world labour markets are to some extent imperfectly competitive but as with perfect competition in product markets, this provides a yardstick for judging how well real-world markets perform (3 hours 30 minutes allocated) | Labour markets introduction: Students to develop an understanding of “the labour market” realising it is made up of a number of submarkets each with individual characteristics. MRP theory: Teacher-led presentation of the demand for labour explaining the relationship between the physical output and revenue generated. Students to identify the problems of measuring output in some markets. The supply of labour: Consideration of occupational mobility and supply constraints on labour such as innate ability, education and skills on the supply of labour in various markets. Teacher-led presentations of issues of labour markets. The labour market diagrammatically: Considering changes in the demand and supply of labour and why people are paid differently using journals or clips. The nature of work and the backward bending supply curve: Illustration of individual supply in labour markets and the effects on supply. This can be done using imaginary wage rates for those who are currently employed in part time work. Wage rate determination: Student analysis of diagrams and equilibriums in competitive markets. Analysis of changes in the demand and supply of labour linking to recent developments such as new EU member states and migration. Flexible labour markets: Teacher-led presentation of labour market flexibility and changes over the last few decades with evaluation by students over whether flexible working is always beneficial – this can be linked to trade union later. Ideas for extension and differentiation Investigation of pay in a range of jobs and to what extent the differentials can be explained by supply and demand | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 163-193 Anderton,A. 6th ed. (2015). pg 395-415 Lawrence,J. et al. (2009). pg 76-55. Powell,R. (2014). pg 153-169. Demand for labour pres.tutor2u Economic Review. Vol. 29. Feb. 2012. Bankers and footballers: what do they have in common? Economic Review. Vol. 30. April 2013. What motivates people to work harder? Amazon worker pay rise on the Financial Times |
4.1.6.4 The determination of relative wage rates and levels of employment in imperfectly competitive labour markets
4.1.6.5 The influence of trade unions in determining wages and levels of employment
4.1.6.6 The National Minimum Wage
4.1.6.7 Discrimination in the labour market
Prior knowledge: Knowledge of ‘Price determination in a competitive market’ (AS section 3.1.2/A-level section 4.1.3), ‘Production, costs and revenue’ (A-level section 4.1.4) and ‘Perfect competition, imperfectly competitive markets and monopoly’ (A-level section 4.1.5) is necessary. This also builds on the rest of ‘The labour market’ (A-level section 4.1.6 – see above).
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how wage rates and levels of employment are determined in imperfectly competitive labour markets, including the roles played by trade unions, monopsonistic employers and the government Skills Diagrams illustrating the impact of monopsony power, trade unions and the government | Students should appreciate that, for a variety of reasons, real-world labour markets may result in an inefficient allocation of resources (5 hours 30 minutes allocated) | Imperfect labour markets: Explanation of how intervention by organisations such as trade unions or monopsony employers can distort the labour market. Students to develop an understanding of how labour is not homogenous and factors affecting supply and demand of labour. Trade unions: Teacher-led explanation of the role of trade unions and how they distort the market. The role of industrial action and collective bargaining can be analysed. Trade union diagrammatically: Students to develop an understanding of the trade union diagram and be able to apply concepts such as union density and strength to the effects on the diagram. Unions in the UK: Current issues regarding trade unions and disputes. Clips from the news may be useful in highlighting issues. Students to develop an understanding of the pros and cons of union membership. Employment protection, legislation and flexible working: Students to read articles from the news or journals to develop deeper understanding of conflicts between flexible working and union activity. National minimum wage: This can be done through recent budget announcements or news clips. Students to develop an understanding of how the national minimum wage affects employment levels. Students may consider how the NMW has different effects regionally or in different occupations.
Monopsony employers: Teacher-led presentation regarding monopsony. Students to develop an understanding of monopsony or “virtual” monopsony employment. Students can evaluate whether different markets really display these characteristics against theoretical models. Monopsony diagrammatically: Students to be able to identify the effects of monopsony’s on diagrams. Students to develop and understanding of the concept of the marginal cost of labour and firms aiming to employ workers where the marginal cost equals the marginal revenue product. Monopsony vs trade union: Students to be able to develop an understanding of the model of where monopsony meets trade union. Students to be able to understand how the relative strength of each group determines the wage rate. Labour market failure: Students to develop an understanding of why there is failure in the labour market such as geographical immobility and how markets are distorted by different institutions. Ideas for extension and differentiation Investigation of the impact of the National Minimum Wage and/or of evidence of discrimination in UK labour markets | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 163 - 193 Anderton,A. 6th ed. (2015). pg 415-424 & 430-431 Lawrence,J. et al. (2009). pg 86-95. Powell,R. (2014). pg 170-176. Wage differentials pres.tutor2u Economics Today. Vol 20. March 2013. Trade Union membership in the UK and labour market flexibility. Economics Today. Vol. 18. March 2011. To what extent has the labour market in the UK become more flexible? Economic Review. Vol. 29. Feb. 2012. Employment protection legislation – Impacts on labour markets. Economics Today. Vol. 20. Nov 2012. The NMW and its impact on the labour market. The national living wage explained.tutor2u Economic Review. Vol. 30. Nov. 2012. Labour market failure. |
4.1.7 The distribution of income and wealth: poverty and inequality
Total time: 8 hours + 1 hour for assessment activities.
4.1.7.1 The distribution of income and wealth
4.1.7.2 The problem of poverty
4.1.7.3 Government policies to alleviate poverty and to influence the distribution of income and wealth
Prior knowledge: None necessarily but knowledge of ‘Economic methodology and the economic problem and’ (AS/A-level sections 3.1.1 and 4.1.1) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how and why income and wealth are unequally distributed, and what could and should be done about it Skills Interpretation of Lorenz Curves and Gini coefficients | Students should appreciate the distinction between equity and equality, and that value judgements will influence views of a fair distribution and what, if anything, should be done (8 hours allocated) | Poverty and Inequality: Teacher-led presentation highlighting the differences between inequality and poverty. Explanation of terms such as quartiles, quintiles or deciles and distinctions between absolute and relative values. Consequences of poverty: Students to identify and analyse the effects of poverty on different groups such as individuals, society, firms and the government possibly using a grid. Poverty comprehension: Students to develop further understanding of poverty using articles or recent news stories
ICT opportunity – Poverty investigation: Student investigation/report into current levels of poverty in the UK and current solutions or reasons why poverty may be getting worse. International comparisons can be made and some analysis of Gini coefficients or Lorenz curves of several counties. Groups in poverty: Identification of groups susceptible to poverty. Students to be able to explain why each group has characteristics which makes them more susceptible. Solutions to reduce poverty: Students to develop solutions based upon earlier activities identifying which groups are in poverty. Students to develop evaluation of the benefits and costs of each method. Government intervention, inequality and poverty: Possible use of recent budget or news articles regarding the taxation or benefits system to stimulate consideration of current policies effects on the distribution of income. It is useful to use material that is heavily biased in order to generate student discussion. Ideas for extension and differentiation Research into the distribution of income and wealth in the UK and/or Gini coefficients in a range of countries | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 193-221 Anderton,A. 6th ed. (2015). Pg 430-459 Lawrence,J. et al. (2009). pg 96-108. Powell,R. (2014). pg 177-190. Poverty and inequality pres.tutor2u Absolute and relative poverty tutor2u Inequalities in income and wealth study notes.tutor2u Economic Review. Vol. 30. April 2013. Looking at inequality JRF reports https://www.jrf.org.uk/reports Wealth and income inequality pres.tutor2u Inequality policies pres.tutor2u Economics Today. Vol 19. Sep 2011. What are the causes of inequality of income and wealth in the UK? |
4.1.8 The market mechanism, market failure and government intervention in markets
Total time: 10 hours + 4 hours for assessment/revision activities.
4.1.8.1 How markets and prices allocate resources (partly covered in AS)
4.1.8.2 Market failure is covered in the AS content (Year 1)
4.1.8.3 Public goods, private goods and quasi-public goods (partly covered in AS)
4.1.8.4 Positive and negative externalities in consumption and production (partly covered in AS)
4.1.8.5 Merit and demerit goods (partly covered in AS)
4.1.8.6 Imperfect Information
Prior knowledge: This section builds on ‘The market mechanism, market failure and government intervention in markets’ (AS section 1.5). Knowledge of ‘Price determination in a competitive market’ (AS section 1.2/A level section 1.3), ‘Production, costs and revenue’ (A level section 1.4) and ‘Perfect competition, imperfectly competitive markets and monopoly’ (A level section 1.5) is necessary. Knowledge of ‘The distribution of income and wealth: poverty and inequality’ (A level section 1.7) would also be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about the advantages and disadvantages of the price mechanism, and how externalities can be illustrated on diagrams Skills The drawing of MSB/MSC diagrams to illustrate positive and negative externalities, and the misallocation of resources resulting from the consumption of merit and demerit goods | Students should be able to recognise a wide range of situations where markets could fail, , all illustrated by real-world examples (4 hours allocated) | Markets and the functions of price: Students to recap on the market mechanism and how the functions of price work. Students to develop an understanding of why markets may fail to allocate resources effectively.
Public, merit and demerit goods: Teacher-led presentation on public, merit and demerit goods. Introduction of the concepts of the divergence between private costs and benefits and social costs and benefits. Positive and negative externalities in consumption diagrammatically: For some students this may prove quite difficult. Teacher-led explanation of why external costs lead to a divergence between private and social costs and why external benefits lead to a divergence between private benefits and social benefits. A clear distinction should be made between externalities in consumption differ from production. Externalities in consumption analysis: Students to analyse and explain how externalities impact on society and possibly require government intervention to correct. (Stretch and challenge: Students may be able to develop analysis of why goods or services with high marginal external costs may be banned whereas smaller marginal external costs may be subject to different intervention). Externalities in production analysis and diagrammatically: Students to develop an understanding of why social costs and benefits diverge from private costs and benefits and be able to illustrate this diagrammatically. (Stretch and challenge: Students to be able to evaluate why there are much fewer examples of positive externalities of production compared to negative based upon assumptions of profit maximisation). Real world examples: Students to develop understanding of real world examples using newspaper articles or news clips from a variety of sources. Imperfect and asymmetric information: Students to develop an understanding of why markets often fail in terms of imperfect information. This can be linked back to the behavioural topic studied at the start of the course. Journals or articles can be used to illustrate issues. Ideas for extension and differentiation Research into examples of current market failure and what has been/could be done | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 223-273 Anderton,A. 6th ed. (2015). pg 367-376 Lawrence,J. et al. (2009). pg 109-117. Powell,R. (2014). pg 121-140. Market and govt. failure pres.tutor2u Merit & demerit goods pres.tutor2u Positive externalities pres.tutor2u Economic Review. Vol. 28. April 2011. The tragedy of the commons: road congestion Imperfect information pres.tutor2u Economics Today. Vol. 18. Nov. 2010. Should the provision of renewable energy be left to market forces? Economic Review. Vol. 30. April 2013. Imperfect information |
4.1.8.7 Competition policy
4.1.8.8 Public ownership, privatisation, regulation and deregulation of markets
4.1.8.9 Government intervention in markets (partly covered in AS)
4.1.8.10 Government failure (partly covered in AS)
Prior knowledge: Knowledge of ‘Price determination in a competitive market’ (AS section 3.1.2/A level section 4.1.3), ‘Production, costs and revenue’ (A level section 4.1.4) and ‘Perfect competition, imperfectly competitive markets and monopoly’ (A level section 4.1.5) is necessary. Knowledge of ‘The distribution of income and wealth: poverty and inequality’ (A level section 4.1.7) would also be helpful. This section builds on ‘The market mechanism, market failure and government intervention in markets’ (AS section 3.1.5) and the rest of this section at A level (4.1.8 – see above).
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about how and why governments intervene in markets and why this may not necessarily improve economic welfare Skills The drawing of a variety of diagrams to illustrate potential solutions to market failure and the ability to analyse possible problems associated with these ‘solutions’ | Students should be able to discuss the pros and cons of alternative policies, including whether intervention is necessarily appropriate, all illustrated by real-world examples (6 hours allocated) | Government intervention to correct market failure: Students to recap on different methods of government intervention to correct market failure. This could be in the form of mind maps or grids. Competition policy: Teacher-led presentation on competition policy and the role of the competition authorities. This could also include news clips of recent legal action against companies. Competition policy comprehension: Students to read journals or articles to provide further depth of understanding regarding how government intervenes in markets. Students could also develop an understanding of how PFI and competitive tendering work. Government intervention in markets: Students to look at the pros and cons of each form of intervention and evaluate the effectiveness of each form. Public ownership, privatisation and deregulation: This could be taught using recent examples such as the Royal Mail or using clips from Youtube. Links to allocative efficiency and how best to create competitive markets can be made. Evaluation of the various forms of government intervention can be brought in. Public choice theory: This can be linked to all aspects of the syllabus such as behaviour and market failure. Government failure: Students to analyse reasons why the government may fail when intervening in markets and develop an understanding of why the functions of price may mean that markets would work better if left alone. Carbon trading: Teacher-led presentation of government intervention in the market for permits. Many links can be made here to areas such as the tragedy of the commons and issues regarding European union. Ideas for extension and differentiation Research into recent competition cases and/or the behaviour and performance of a privatised industry, to consider the effectiveness of UK competition policy and regulation | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 273-282 Anderton,A. 6th ed. (2015). Pg 377-389 Lawrence,J. et al. (2009). pg 65-75. Powell,R. (2014). pg 98-120. Competition policy pres.tutor2u Economics Today. Vol 20. March 2013. The Competition Authorities. Economic Review. Vol. 27. April 2010. Economics of industry – Isle of Wight ferries and the OFT Economic Review. Vol. 29. Feb. 2012. Dynamic pricing: What are the consequences of regulation? Economics Today. Vol. 18. Jan 2011. To what extent is there competition in the markets where state-owned industries were privatised? Economic Review. Vol. 29. Sep. 2011. The energy industry: new regulation for new challenges |
4.2.1 The measurement of macroeconomic performance
Total time: 2 hours
Note: Sections 4.2.1.1 The objectives of government economic policy, 4.2.1.2 Macroeconomic indicators, 4.2.2.3 Uses of index numbers are covered in the AS (Year 1).
4.2.1.4 Uses of national income data
Prior knowledge: None necessarily but knowledge of the rest of ‘The measurement of macroeconomic performance’ (AS/A level section 3.2.1 and 4.2.1) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the uses and limitations of national income data when making comparisons over time and between countries Skills An understanding of the meaning and role of purchasing power parity in assessing living standards in different countries | Students should use their existing knowledge of the concept of national income to consider its appropriateness as a measure of a country’s standard of living (2 hours allocated) | Introduction to macroeconomics: Recap of prior learning from first year. This could be in the form of diagrams on mini-whiteboards or recall of the macroeconomic goals. National income: Update students on the state of the economy in terms of growth and position in the trade cycle using newspaper articles or news clips. Purchasing power parity: Students to develop understanding of the concept of purchasing power parity. (Stretch and challenge opportunity: Students to analyse different countries changes in exchange rate and the effects on PPP). Ideas for extension and differentiation Research into data for national income for different countries, in terms of purchasing power parity and not – what does this say about their living standards? | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 293-320 Anderton,A. 6th ed. (2015). pg 150-157 Lawrence,J. et al. (2009). pg 126. Powell,R. (2014). pg 209-212. |
4.2.2 How the macroeconomy works: the circular flow of income, AD/AS analysis, and related concepts
Total time: 2 hours
Note: Sections 4.2.2.1 The circular flow of income, 4.2.2.2 Aggregate demand and aggregate supply analysis, 4.2.2.3 The determinants of aggregate demand and 4.2.2.5 Determinants of aggregate supply are covered in the AS (Year 1).
4.2.2.4 Aggregate demand and the level of economic activity
4.2.2.6 Determinants of long-run aggregate supply
Prior knowledge: This section builds on ‘How the macroeconomy works: the circular flow of income, AD/AS analysis, and related concepts’ (AS section 3.2.2) and knowledge of ‘The measurement of macroeconomic performance (A level section 4.2.1) would also be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about the multiplier and an alternative view of the AS curve Skills Calculations of the multiplier using the MPC and diagrammatic analysis of the Keynesian AS curve | Students will not be expected to calculate the value of the multiplier using the marginal propensities to withdraw (2 hours allocated) | Aggregate demand: Activities recapping on the determinants of aggregate demand and how far the UK is from full capacity in recent times. This could include current news clips or newspaper articles. The multiplier diagrammatically: Students to be able to identify how the multiplier impacts on AD and how injections into the economy create greater than proportionate increases in real national income. The marginal propensity to consume and marginal propensity to save: Teacher-led explanation of the marginal propensity to consume and save. Possible use of short clips to reinforce ideas. Multiplier calculations: Students activity to calculate and manipulate data to work out the values of the multiplier and the effects of changes to the MPC. Ideas for extension and differentiation Investigation of a wider range of applications of AD/AS analysis relating to the UK economy, using the Keynesian AS curve | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 228-354 Anderton,A. 6th ed. (2015). pg 171-188 Lawrence,J. et al. (2009). pg 132,133. Powell,R. (2014). pg 216-232. |
4.2.3 Economic performance
Total time: 10 hours + 1 hour for assessment activities.
4.2.3.1 Economic growth and the economic cycle
4.2.3.2 Employment and unemployment
Prior knowledge: This section builds on ‘Economic performance’ (AS section 3.2.3) and knowledge of ‘The measurement of economic performance’ (A level section 4.2.1) and ‘How the macroeconomy works: the circular flow of income, AD/AS analysis, and related concepts’ (A level section 4.2.2) is also necessary.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about the causes and effects of economic growth and unemployment on both individuals and the economy Skills More diagrammatic practice to illustrate growth and unemployment issues, including for the natural rate of unemployment | Students should be able to discuss the sustainability of economic growth and a wider range of factors affecting unemployment, plus the consequences of unemployment (5 hours allocated) | The economic cycle: Teacher-led presentation of the economic cycle identifying the various phases and the current situation (this could be done with the use of recent growth data). Cyclical instability: Students to identify reasons as to why the economy may go into recession or enter a recovery. This could be a good starting point for introducing past questions and developing student’s chains of reasoning. Economic growth: Teacher-led presentation on the effects of economic growth. Students to develop a wider understanding of the costs and benefits of growth and link to prior learning such as environmental damage or inequality. Economic growth comprehension: Students to read articles on economic growth and evaluate the effects on individuals, firms and society. Growing AD: Teacher-led presentation on the growth of AD and its components. Students to be able to evaluate the effectiveness of components or recent trends. Growth theories: Students to explore different theories regarding growth such as endogenous and exogenous factors. Some links to development can also be made here but this will be studied in a separate topic. (This could be linked to an ICT opportunity investigating theories and world experiences). Standards of living: Students to investigate alternatives to GDP per capita in measuring living standards. This could be introduced with a clip of the happy planet index. It could also be done as an ICT lesson with a structured look at the HDI and its components. ICT opportunity – Economic growth quiz (tutor2u) or teacher-led activity with students showing responses to questions on whiteboards. Unemployment: A good introduction to this topic is to look into local news in order for students to link what is happening locally to the national economy. This could be through news clips or articles. Unemployment and the Phillips curve: Teacher-led presentations and development of the idea of the long run Phillips curve. Students may have done some work on short run Phillips curve and trade-offs in the first year. Focus could be shifted on to the relative prioritisation of inflation by some governments. The concepts of NRU or NAIRU may be introduced. Phillips curve comprehension: Students to critically evaluate the relevance of the long run Phillips curve after reading articles. Ideas for extension and differentiation Further research into recent causes of cyclical instability, such as debt and asset price bubbles; and what the current natural rate of unemployment is | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 355-383 Anderton,A. 6th ed. (2015). pg 460-465, 615-641 & 484-492 Lawrence,J. et al. (2009). pg 120-135 &146-156. Powell,R. (2014). pg 198-215 & 233-248. The economic cycle study notes.tutor2u Economic Review. Vol. 29. Feb. 2012. Explaining economic growth Economic growth costs & benefits pres.tutor2u Happy planet index clip. Youtube Economics Today. Vol 18. Jan. 2011. What has happened to the vertical phillips curve? |
4.2.3.3 Inflation and deflation
4.2.3.4 Possible conflicts between macroeconomic policy objectives
Prior knowledge: This section builds on ‘Economic performance’ (AS section 3.2.3) and it would also be helpful to have studied the rest of this section at A level (4.2.3 – see above). Knowledge of ‘The measurement of economic performance’ (A level section 4.2.1) and ‘How the macroeconomy works: the circular flow of income, AD/AS analysis, and related concepts’ (A level section 4.2.2) is also necessary.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the Quantity Theory of Money and the effects of inflation and deflation on both individuals and the economy, plus the possibility of conflicts between macroeconomic policy objectives Skills Manipulation and interpretation of the Fisher equation, and the use of Phillips curve diagrams to illustrate possible conflicts between objectives and their implications for policy | Students may use T instead of Q in Fisher‘s equation of exchange but should appreciate their different meanings, and also how possible macroeconomic conflicts may be reconciled in the long run (5 hours allocated) | Inflation: Students to mind map prior learning such as how inflation is measured and the different types/measurements. Inflation presentation: Teacher-led development of ideas previously covered and extended. Including the importance of expectations and links to unemployment and Phillips curve. Calculating inflation: Students to develop a more detailed understanding of the different methods of calculating the inflation figures such as the differences between the CPI and RPI. (Stretch and challenge activity – some students may be able to interpret weightings and the effects on inflation using numerical examples). The money supply and inflation: Explanation of the Fisher equation with links to quantitative easing and the money supply. Costs of inflation: Teacher-led presentation followed by students mind mapping effects on different groups such as individuals, society, the government and firms. Inflation calculator ICT opportunity: Students to calculate their own inflation using the BBC’s calculator. Deflation: Teacher-led presentation on the costs and problems of deflation. Students to analyse news articles of countries experiences (such as Japan) and the effects on society and individuals. Students should be able to identify the differences and relative merits and drawbacks of malign and benign deflation. Ideas for extension and differentiation Research into the experience of Japan in their ‘lost decade’ and/or the circumstances of the ‘NICE decade’ in the UK | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 383-404 Anderton,A. 6th ed. (2015). pg 487-492 & 517-521 Lawrence,J. et al. (2009). pg 136-145. Powell,R. (2014). pg 249-268. Inflation targets pres.tutor2u
Inflation costs and benefits pres.tutor2u
BBC inflation calculator website Economics Today Vol. 19. Jan 2012. Inflation: CPI vs RPI |
4.2.4 Financial markets and monetary policy
Total time: 10 hours + 1 hour for assessment activities.
4.2.4.1 The structure of financial markets and financial assets
4.2.4.2 Commercial banks and investment banks
4.2.4.3 Central banks and monetary policy
4.2.4.4 Regulation of financial markets
Prior knowledge: This section builds on ‘Macroeconomic policy’ (AS section 3.2.4), particularly the part on ‘Monetary policy’. Knowledge of ‘The measurement of economic performance’ (A level section 4.2.1), ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (A level section 4.2.2) and ‘Economic performance’ (A level section 4.2.3) is also required.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about monetary policy, including the roles of different financial markets and institutions, and the need for regulation Skills Calculation of the yield on a government bond | Students should understand current and recent monetary policy instruments and how these are used to achieve the government’s objectives (10 hours allocated) | Functions of money: Teacher-led presentation into the functions of money establishing the two main measures; M0 as narrow money and M4 as broad money. The money markets: Students to develop an understanding of different markets and the role they play in the economy. Further understanding of bonds, yields and the differences between bonds and shares is needed. Calculating yields: Students to carry out exercises calculating the bond yield based upon numerical examples (Stretch and challenge: More difficult calculations can be carried out for those with higher maths abilities). Banking: Students to develop an understanding of the banking system including the difference between commercial and investment banks. Students to develop an understanding of risk and how banks create credit. Financial regulation: Teacher-led presentation demonstrating the need for financial regulation linked to the 2007/2008 crisis. Possible use of clips and newspaper articles to illustrate possible failures in the market. Students to develop an understanding of liquidity ratios and moral hazard. Monetary policy presentation: Teacher-led presentation on monetary policy. Students to develop a deeper understanding of the role of the Bank of England and other monetary variables. The money supply: Students to develop an understanding of the money supply and how changes in the money supply can affect output and the price level. This can be done with newspaper articles or journals.ICT opportunity: The effectiveness of monetary policy: Students to read articles or journals then write a small report considering the effectiveness of monetary policy over recent years in the UK. Research into the extent to which the activities of financial institutions contributed to the recession. | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 405-446 Anderton,A. 6th ed. (2015). pg 507-516 & 522-536 Lawrence,J. et al. (2009). pg 171-179. Powell,R. (2014). pg 269-284. Economics help Quantitative easing Economics help Quantitative easing costs and benefits Aqa guidance of financial markets Monetary Policy has run its course on the Financial Times Economics Today Vol 19. Nov 2011. How useful is quantitative easing? Reversing QE on the Financial times Economic Review.
Vol. 27. April 2010. Monetary policy Economics Today. Vol 18. Jan 2011. How effective has UK monetary policy been? Economic Review. Vol. 30. Nov. 2013. Bond yields: why are they so important? The Bank of England website - Monetary policy / QE / letters / meeting minutes etc |
4.2.5. Fiscal policy and supply-side policies
Total time: 6 hours + 1 hour for assessment activities.
4.2.5.1 Fiscal policy
Prior knowledge: This section builds on ‘Macroeconomic policy’ (AS section 3.2.4), particularly the part on ‘Fiscal policy’. Knowledge of ‘The measurement of economic performance’ (A level section 4.2.1), ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (A level section 4.2.2) and ‘Economic performance’ (A level section 4.2.3) is also required. Knowledge of other parts of this section at A level (4.2.5 – see above) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the roles and relative merits of different types of tax and government spending, and the significance of budget deficits and surpluses Skills Further use of AD/AS diagrams, together with microeconomic supply and demand diagrams to analyse the effects of different fiscal policy changes | Students should be able to analyse the effects of fiscal policy changes to both the level and pattern of economic activity and should be able to build on their AS knowledge to consider the pros and cons of unbalancing the budget (5 hours allocated) | Identify the major areas of government spending and taxation: Student activity highlighting areas of spending and justification for example public goods, merit goods etc. Use of HM treasury website or recent budget summary to highlight recent changes. Government spending: Teacher-led presentation of the major areas of government spending and changes. Changes in policy comprehension: Students to develop understanding of terms such as automatic stabiliser and discretionary policy and analyse changes diagrammatically. Students to understand the government’s role in the multiplier (studied earlier). Taxation: Teacher-led presentation on types and justifications of taxation. The relative importance of types of taxation such as progressive and regressive can be discussed as well as their effects on things such incentives to work. Corporation tax: Students to evaluate the role of corporation tax in attracting FDI and its effects on domestic investment. The Laffer curve: Teacher-led activity on the Laffer curve. Students to evaluate the effects of changing taxation. Government borrowing: Analysis of the current deficit (or surplus?) and the addition (or reduction?) in national debt. This can be obtained from the treasury website. Links back to the money markets and bonds can be made here. Students could be shown “the debt bombshell” to give them some perspective of the size of the national debt. Debt: Comprehension activities on the size and changes in the UK debt. Students should be able to identify the consequences of debt such as the effects on future generations and crowding out or crowding in. Ideas for extension and differentiation Research into recent changes to the budget balance – to what extent have they been desirable? | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 449-478 Anderton,A. 6th ed. (2015). pg 466-483 & 493-506 Lawrence,J. et al. (2009). pg 157-170. Powell,R. (2014). pg 285-299. Economic Review. Vol. 28. April 2011. Spending cuts and the UK economy. Economic Review. Vol. 28. April 2011. Fiscal policy – Globalisation and challenges for corporate tax. Fiscal policy and AD pres.tutor2u Economics Today. Vol.21 March 2014. Understanding the budget. Economics Today. Vol. 18. Nov 2010. What problems does a budget deficit cause for government financing? Economic Review. Vol. 29. Sep. 2011. The history of public debt. |
4.2.5.2 Supply-side policies
Prior knowledge: This section builds on ‘Macroeconomic policy’ (AS section 3.2.4), particularly the parts on ‘Fiscal policy’ and ’Supply-side policies’. Knowledge of ‘The measurement of economic performance’ (A level section 4.2.1), ‘How the economy works: the circular flow of income, AD/AS analysis, and related concepts’ (A level section 4.2.2) and ‘Economic performance’ (A level section 4.2.3) is also required. Knowledge of the rest of this section at A level (4.2.5 – see above) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about the variety of supply-side measures and how they impact on the economy Skills Further use of macro and microeconomic diagrams to illustrate the possible impact of a range of supply-side measures | Students should appreciate that supply-side improvements can help to deal with aspects of market failure (1 hour allocated) | Supply side policy: Student recap on work done in first year. Students able to demonstrate LRAS shifting out diagrammatically and the effects on the macroeconomic goals. Supply-side intervention or laissez-faire: Student consideration of the relative merits or costs of the two approaches to supply side policy. Supply-side comprehension: Students to read relevant articles and evaluate the effectiveness of supply-side policy. Ideas for extension and differentiation Research into the impact of recent supply-side measures on macro and microeconomic performance | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 478-489 Anderton,A. 5th ed. (2008). pg 250-259 & 502 Lawrence,J. et al. (2009). pg 166-170. Powell,R. (2014). pg 300-308. Supply-side policies study notes.tutor2u Economics Today. Vol 21. March 2014. What is meant by competitiveness? |
4.2.6 The international economy
Total time: 28 hours + 5 hours for assessment/revision activities.
4.2.6.1 Globalisation
Prior knowledge: Knowledge of ‘The measurement of macroeconomic performance’ (AS/A level section 2.1) is necessary and an awareness of the various aspects of the AS macroeconomics section would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn the meaning and causes of globalisation and its consequences for countries at different stages of development Skills None particularly | Students should appreciate both the opportunities and threats of globalisation to less-developed and more-developed countries, whilst also recognising that the experience of individual countries in each category will vary according to their circumstances (3 hours allocated) | Globalisation: Introduction of the topic may be good by drawing on prior student knowledge or links with other subjects such as Geography. This can be further enhanced with clips from the internet. The global economy: Teacher-led presentation on globalisation and the opportunities and threats. Recent issues can be brought into discussion such as if natural disasters have impacted on certain countries more than others. Globalisation and developed economies: Student based activities on researching the effects of globalisation on the UK or similar economies such as the movement away from manufacturing or structural unemployment due to outsourcing. Globalisation and developing countries: Some links can be made to later topics such as development. Students could have some understanding of the role of multinational corporations and FDI. Ideas for extension and differentiation Research into the activities of two multinational corporations, one in the secondary and the other in the tertiary sector | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 491-498 Anderton,A. 6th ed. (2015). pg 537-544 Lawrence,J. et al. (2009). pg 180-195. Powell,R. (2014). pg 309-330. Globalisation documentary. CH4. Youtube
|
4.2.6.2 Trade
Prior knowledge: Knowledge of supply and demand theory is necessary in order to draw a tariff diagram (AS section 3.1.2/A level section 4.1.3 ‘Price determination in a competitive market’). Knowledge of ‘Specialisation, division of labour and exchange’ and ‘Economies and diseconomies of scale’ (parts of AS section 3.1.3/A level section 4.1.4 ‘Production, costs and revenue’) would be helpful. A general understanding of macroeconomics at AS level would also help to put this section into context.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn how and why countries trade but also how and why measures may be taken to restrict trade, plus the role of the WTO; and also to learn about the Single European Market. Skills Calculation of a numerical example to illustrate comparative advantage and the gains from trade; and using a diagram to show the effects of a tariff | Students should appreciate the benefits of trade but also how and why countries may impose trade restrictions and the effects of these. (10 hours allocated) | International trade introduction: Building upon student’s prior knowledge and understanding from the first year, students could be asked to produce a mind map of learning from the first year such as the effect of exchange rates or the advantages of different systems. International trade and protectionism presentations: Teacher-led activity with students developing a wider knowledge of trade at A level. Students to develop analysis of diagrams to demonstrate different forms of protectionism. Tariff diagram: Extended analysis of the tariff diagram with links to how it can be used. Explanations of deadweight welfare loss and the effects of removal of tariffs in terms of producer and consumer surplus. Comparative advantage: Students to develop understanding of comparative advantage through numerical examples. Use of terms such as absolute advantage and terms of trade. Students could be asked to create their own numerical examples. (Stretch and challenge: students could develop more detailed models or consider multilateral trade). Protectionism comprehension: Students to develop a deeper understanding of why trade wars develop and the costs of trade wars. Recent examples from the news would be useful to illustrate trade issues. ICT opportunity -The EU: Students to develop an understanding of the workings of the EU and the single market. This could be done in an investigation lasting a few lessons where issues such as freedom of movement of goods, services and people are analysed. This could analyse the characteristics of the SEM. ICT opportunity - Trade + protectionism quizzes (tutor2u) or teacher-led activity with students showing responses to questions on whiteboards. The EU and the single market: Linking issues discussed earlier such as protectionism and trade to explain the origins and development of the EU and the gains from trade. The Eurozone: This links to the next unit in terms of exchange rate systems but could be suitably analysed here with students assessing the current state of the Eurozone nations as well as the costs and benefits of being in the single currency. This may be developed further later. Ideas for extension and differentiation Research into other trade blocs. | Powell, R. & Powell, J. (2016) pg 304-322 Anderton,A. 6th ed. (2015). pg 545-553 & 558-581 Lawrence,J. et al. (2009). pg 202-206 & 218-231. Powell,R. (2014). pg 309-330. Absolute and comparative advantage numerical example PAJ Holden Youtube clip International trade pres.tutor2u Trade & protectionism pres.tutor2u Economic Review. Vol. 30. Nov. 2013. Why do firms export? Economics help comparative advantage Effect of tariffs –Economics help
Economics Today. Vol. 18. March 2011. If Protectionism is self-defeating, why is it on the increase? Economic Review. Vol. 29. Feb. 2012. Imports and protectionism. |
4.2.6.3The Balance of Payments
4.2.6.4 Exchange rate systems
Prior knowledge: Knowledge of ‘The measurement of macroeconomic performance’ (AS/A level section 3.2.1 and 4.2.1) and ‘The balance of payments on current account’ (part of AS section 3.2.3 ‘Economic performance’) is necessary, as is ‘Price determination in a competitive market’ (AS section 3.1.2/A level section 4.1.3) for the determination of exchange rates. An awareness of the various aspects of the AS macroeconomics section would also be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn more about the composition of the balance of payments and the significance of imbalance; and also to learn about the determination and pros and cons of different exchange rate regimes Skills More practice with calculations relating to the balance of payments and the use of supply and demand diagrams for the determination of exchange rates | Students only need a general appreciation of the capital and financial accounts but should have a detailed knowledge of the current account (9 hours allocated) | The balance of payments: Teacher-led presentation and recap of prior learning. Teacher to draw particular attention to the capital account. Trade in goods and services: Students to analyse actual balance data to perform calculations and make comparisons of data or charts. The current account deficit comprehension: Students to read journals or articles and develop understanding of why the current account deficit exists. Is the current account deficit a problem: Students develop understanding of why deficits on the current account may or may not be a problem. Exchange rates: Students mind map all they know from the first year about the exchange rate with possible links to understanding of the Eurozone.
Exchange rate systems: Students evaluate the pros and cons of each type of system and are able to apply some brief knowledge of historical changes. Changing exchange rates and Marshall-Lerner: Explanation of how changes in the exchange rate affect trade flows. The single currency: Teacher-led presentation of issues regarding the single currency. This could be developed with clips showing the current climate in the Eurozone or debates about membership. Ideas for extension and differentiation Research into whether the Eurozone should be broken up or extended | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 520-545 Anderton,A. 6th ed. (2015). pg 582-614 Lawrence,J. et al. (2009). pg 196-217. Powell,R. (2014). pg 331-369. Balance of payments pres.tutor2u Economics Today. Vol. 20. Nov 2012. The UK current account deficit. Exchange Rates and Brexit on the Financial Times Economic Review. Vol. 29. Nov. 2011. Interpreting economic data – The balance of payments. China’s Economy Slows on the Financial Times China dumps US securities on the Financial Times |
4.2.6.5 Economic growth and development
Prior knowledge: A basic knowledge of ‘The objectives of government economic policy’ (part of AS/A level section 3.2.1 and 4.2.1) and the concept of ‘Economic growth’ (part of AS/A level section 3.2.3 and 4.2.3) would be helpful.
Learning objectives/skills | Guidance | Learning activity with ideas for differentiation and extension | Resources |
|---|---|---|---|
To learn about the characteristics of less-developed countries, and how growth and development can be achieved or hindered Skills Interpretation of a variety of indicators to judge the development of a country | Students should be able to compare market-based and interventionist strategies and the issue of trade versus aid. This section links with several other parts of the Specification such as globalisation and inequality (6 hours allocated) | Growth and development: Teacher-led presentation linking growth, trade and development. Some growth theories may be analysed. Clips can be used to highlight development in other countries. Aid: Student activity developing an understanding of bilateral and multilateral aid and the pros and cons of each and an understanding of tied aid. ICT opportunity - Measuring human development: Student activity producing a short report explaining the measurement of human development and changes over time. Particular focus could be on emerging markets. Barriers to growth: Possible use of clips and news articles to highlight global problems which may inhibit growth and development opportunities. Equity and freedom: Clips to demonstrate countries experiences including problems or factors which may inhibit development. Ideas for extension and differentiation In-depth investigation into a less-developed country – what has happened over the last 20 years? To what extent is it now more or less developed? | Powell, R. & Powell, J. AQA A-level Economics 4th Edition Hodder (2019) pg 564-576 Anderton, A. 6th ed. (2015). pg 615-641 Powell,R. (2014). pg 198-215. Aid and development pres.tutor2u Global economics – development.clip. Youtube Economic Review. Vol. 28. April 2011. Measuring human development Economic Review. Vol. 30. April 2013. Human development: the Millennium Development goals. Economic Review. Vol. 30. Nov. 2013. Growth and development in developing countries A debate on equity and freedom clip.Youtube
Economics Today. Vol. 18. March 2011. Why may official aid programmes prove disappointing in their impact? |
Textbook references
Powell, R. & Powell, J.
AQA A-level Economics 4th Edition Hodder (2019) pg
Powell, R. & Powell, J. (2015). AQA A-level Economics 1 Hodder.
Powell, R. & Powell, J. (2016). AQA A-level Economics 2 Hodder.
Anderton, A. (Edited by Gray, D.) (2015). Economics 6th Edition Andertonpress.
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 Edition. Phillip Allan.
Sloman,J. et al. (2012). Economics 8th Edition Pearson.
Perloff,J. (2011). Microeconomics 6th Edition Pearson.
Pindyck,R. et al. (2012). Microeconomics 8th Edition Pearson.