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Northern IrelandEconomics

AS 2: Managing the Economy

5 dot points across 5 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

What determines the total level of demand and supply in an economy, and how is equilibrium output set?

The components of aggregate demand, the short-run and long-run aggregate supply curves, macroeconomic equilibrium, and the multiplier effect.
A focused CCEA A-Level Economics answer on aggregate demand and supply, covering the four components of AD, the determinants that shift it, short-run and long-run aggregate supply, macroeconomic equilibrium and the output gap, and the multiplier effect, with a worked multiplier calculation.
11 min answer →

How does the government use fiscal, monetary and supply-side policy to manage the economy, and how do the objectives conflict?

The macroeconomic objectives, fiscal policy, monetary policy and supply-side policy, their effects on the economy, and the conflicts between objectives.
A focused CCEA A-Level Economics answer on macroeconomic policy, covering the four objectives, fiscal policy and the budget, monetary policy and interest rates, supply-side policy, how each affects AD or AS, and the conflicts between objectives such as growth versus inflation, with a worked policy analysis.
11 min answer →

How is inflation measured, what causes it, and why is price stability a policy objective?

The measurement of inflation using price indices, the causes of inflation (demand-pull and cost-push), deflation, and the consequences of changing prices.
A focused CCEA A-Level Economics answer on inflation, covering the Consumer Prices Index and Retail Prices Index, how a price index and the inflation rate are calculated, demand-pull and cost-push causes, deflation and disinflation, and the consequences of inflation, with a worked index calculation.
10 min answer →

How do we measure the size and growth of an economy, and what drives the economic cycle?

The circular flow of income, the measurement of national income (GDP and GNI), real versus nominal values, economic growth, and the phases of the economic cycle.
A focused CCEA A-Level Economics answer on national income and growth, covering the circular flow of income with injections and withdrawals, GDP and GNI, real versus nominal and per-capita measures, the difference between actual and potential growth, and the phases of the economic cycle, with worked real-GDP reasoning.
10 min answer →

How is unemployment measured, what causes it, and why does it matter?

The measurement of unemployment, the types and causes of unemployment, and the economic and social consequences of unemployment.
A focused CCEA A-Level Economics answer on unemployment, covering the Claimant Count and Labour Force Survey measures, the types of unemployment (frictional, structural, cyclical, seasonal and real-wage), their causes, and the economic and social consequences, with a worked unemployment-rate calculation.
10 min answer →