England · OCRSyllabus
Economics syllabus, dot point by dot point
Every dot point in the England Economicssyllabus, with a focused answer for each one. Click any dot point for a worked explainer, past exam questions, and links to related dot points. Written by Claude Opus 4.8, Anthropic's latest AI.
Component 2: Macroeconomics - Aggregate demand and supply
Module overview →- What are the components of aggregate demand, and what determines each one?2.2 Aggregate demand: the components of AD (consumption, investment, government spending and net exports), the determinants of each, and why the AD curve slopes downward and shifts.10 min answer →
- How do short-run and long-run aggregate supply differ, and how is macroeconomic equilibrium determined?2.2 Aggregate supply and equilibrium: short-run and long-run aggregate supply, the Keynesian and classical LRAS views, macroeconomic equilibrium, and the effect of AD and AS shifts on output and the price level.11 min answer →
- What causes economic growth and the economic cycle, and what are the costs and benefits of growth?2.2 Economic growth and the cycle: the causes of short-run and long-run growth, the phases of the economic cycle, output gaps, and the costs and benefits of growth.11 min answer →
- How does income circulate through an economy, and what role do injections and withdrawals play?2.2 The circular flow of income: the flow between households and firms, injections and withdrawals, the equilibrium level of national income, and the difference between income, expenditure and output.9 min answer →
- How does an initial change in spending multiply through the economy, and how does the accelerator amplify investment?2.2 The multiplier and the accelerator: the multiplier process, the marginal propensities and the multiplier formula, the accelerator effect, and their role in the economic cycle.11 min answer →
Component 1: Microeconomics - Business economics and competition
Module overview →- What objectives do firms pursue beyond profit maximisation, and why might managers and owners disagree?1.4 Business objectives: profit maximisation, revenue and sales maximisation, growth, satisficing and corporate social responsibility, and the principal-agent problem from the divorce of ownership and control.9 min answer →
- How do costs, revenues and profit behave in the short and long run, and what are economies of scale?1.4 Costs, revenues and profit: fixed and variable costs, marginal, average and total cost, the law of diminishing returns, economies and diseconomies of scale, total, average and marginal revenue, and normal and supernormal profit.12 min answer →
- How does the degree of competition shape price, output and efficiency, from perfect competition to contestable markets?1.4 Market structures: the spectrum of competition, the characteristics and outcomes of perfect competition, barriers to entry and exit, and the theory of contestable markets.11 min answer →
- How do monopoly, oligopoly and monopolistic competition set price and output, and are they good or bad for welfare?1.4 Imperfect competition: monopolistic competition, oligopoly and interdependence, monopoly and price discrimination, and the costs and benefits of monopoly power.12 min answer →
- How are wages set by the demand for and supply of labour, and how do monopsony, trade unions and the minimum wage change the outcome?1.4 The labour market: the demand for and supply of labour, wage determination in competitive labour markets, monopsony, trade unions, and the effect of a national minimum wage.11 min answer →
Component 2: Macroeconomics - International and development economics
Module overview →- How does economic development differ from growth, and what helps or hinders developing economies?2.4 Economic development: the difference between growth and development, the measurement of development including the HDI, the barriers to development, and strategies to promote development.11 min answer →
- How are exchange rates determined, and what does the balance of payments record?2.4 Exchange rates and the balance of payments: floating and fixed exchange-rate systems, the causes and effects of exchange-rate changes, and the structure of the balance of payments and the current account.11 min answer →
- What is globalisation, and why do governments use protectionism despite the gains from free trade?2.4 Globalisation and protectionism: the causes and effects of globalisation, trading blocs, the methods of protection (tariffs, quotas and subsidies), and the arguments for and against protectionism.11 min answer →
- Why do countries trade, and what does the theory of comparative advantage say about the gains from trade?2.4 International trade: absolute and comparative advantage, the gains from specialisation and trade, the terms of trade, and the limitations of comparative advantage.11 min answer →
- How do you combine microeconomic and macroeconomic analysis to answer an unseen theme in Component 3?Component 3 synoptic: drawing together microeconomic and macroeconomic analysis to evaluate an unseen theme, the structure of the Themes in economics paper, and the synoptic skills examiners reward.10 min answer →
Component 1: Microeconomics - Introduction to markets
Module overview →- How do demand and supply interact to set the equilibrium price and quantity in a competitive market?1.2 Demand, supply and market equilibrium: the determinants of demand and supply, movements versus shifts, equilibrium and disequilibrium, and consumer and producer surplus.11 min answer →
- How do market, planned and mixed economies allocate resources, and what does efficient allocation mean?1.2 Economic systems and efficiency: market, planned and mixed economies, the role of the price mechanism in resource allocation, and allocative, productive and dynamic efficiency.10 min answer →
- How do the four elasticities measure responsiveness, and why do they matter for revenue and policy?1.2 Elasticities: price, income and cross elasticity of demand and price elasticity of supply, their calculation and determinants, and the link between PED and total revenue.12 min answer →
- How does a production possibility frontier model scarcity, choice, opportunity cost and growth?1.1 Production possibility frontiers: the PPF as a model of scarcity and choice, points on, inside and beyond the curve, opportunity cost along the frontier, the shape of the curve, and shifts representing growth or decline.10 min answer →
- Why does scarcity force every economy to choose, and what does each choice cost?1.1 Scarcity, choice and opportunity cost: the basic economic problem, finite resources and infinite wants, the factors of production, and positive versus normative statements.9 min answer →
Component 2: Macroeconomics - Macroeconomic indicators
Module overview →- How is economic growth measured through GDP, and what are the limits of GDP as a measure of living standards?2.1 Measuring growth: real and nominal GDP, GDP per capita, index numbers and the rate of growth, the difference between actual and potential growth, and the limitations of GDP.11 min answer →
- How is unemployment measured, what are its types and causes, and what are its costs?2.1 Employment and unemployment: the measurement of unemployment (the Labour Force Survey and the claimant count), the types and causes of unemployment, and the economic costs of unemployment.10 min answer →
- How is the distribution of income measured, and why does inequality matter for an economy?2.1 Inequality: the difference between income and wealth, the measurement of inequality through the Lorenz curve and Gini coefficient, the causes of inequality, and the equity-efficiency trade-off.10 min answer →
- How is inflation measured through the CPI, what causes it, and why do its costs matter?2.1 Inflation: the CPI and RPI, how the index is constructed, demand-pull and cost-push causes, the role of the money supply, and the costs of inflation, deflation and disinflation.11 min answer →
- What are the main macroeconomic objectives, and how is the performance of an economy measured against them?2.1 Economic policy objectives: economic growth, low and stable inflation, low unemployment, a satisfactory balance of payments, and other objectives such as low inequality and environmental sustainability.9 min answer →
Component 2: Macroeconomics - Macroeconomic policy
Module overview →- How does fiscal policy manage demand and the public finances, and what are its limits?2.3 Fiscal policy: government spending and taxation, the budget balance and the national debt, direct and indirect and progressive and regressive taxes, automatic stabilisers, and the strengths and weaknesses of fiscal policy.11 min answer →
- How does the central bank use interest rates and the money supply to hit the inflation target, and what does the financial sector do?2.3 Monetary policy and the financial sector: interest rates and the transmission mechanism, quantitative easing, the role of the central bank and the inflation target, the functions of the financial sector, and financial regulation.11 min answer →
- Why do macroeconomic objectives conflict, and what does the Phillips curve say about inflation and unemployment?2.3 Policy conflicts and trade-offs: the conflicts between macroeconomic objectives, the short-run Phillips curve trade-off between inflation and unemployment, and the long-run Phillips curve.10 min answer →
- How do supply-side policies raise productive capacity, and what are their costs and limits?2.3 Supply-side policies: market-based and interventionist supply-side policies, their effect on LRAS and the macroeconomic objectives, and their costs, time lags and limitations.10 min answer →
Component 1: Microeconomics - Market failure and government intervention
Module overview →- How do externalities cause the free market to over-produce or under-produce relative to the social optimum?1.3 Externalities: positive and negative externalities of production and consumption, the divergence of private and social costs and benefits, the welfare loss, and the social optimum.11 min answer →
- When does correcting market failure backfire, leaving society worse off through government failure?1.3 Government failure: the causes of government failure including distorted price signals, unintended consequences, information gaps and administrative costs, and the case for and against intervention.10 min answer →
- How do information gaps and the merit and demerit distinction cause markets to misallocate resources?1.3 Information failure: imperfect and asymmetric information, moral hazard and adverse selection, and merit and demerit goods leading to under-consumption or over-consumption.10 min answer →
- Why does the free market fail to provide public goods at all, and what makes a good public?1.3 Public goods: the characteristics of non-rivalry and non-excludability, the free-rider problem, quasi-public goods, and why public goods cause complete market failure.9 min answer →
- How do indirect taxes, subsidies, price controls and tradable permits correct market failure, and who bears the burden?1.3 Methods of intervention: indirect taxes and subsidies, the incidence of tax and elasticity, maximum and minimum prices, tradable pollution permits, regulation, state provision and information provision.12 min answer →