Economic objectives and performance - OCR GCSE Economics (J205) module overview

Economic objectives and performance (OCR J205 topics 2.1 to 2.5) opens the macroeconomics component. It sets out what the government is trying to achieve and how we measure the economy's performance against those goals. It is examined in J205/02: National and international economics. This page maps the module and links to a focused answer for each dot point.

What this module covers

The module covers the goals of macroeconomic policy and the indicators used to judge the economy.

• Economic objectives. The four main objectives (growth, low unemployment, price stability, fair distribution) and why they conflict.
• Economic growth and GDP. The meaning of growth, GDP and GDP per capita, the determinants of growth, and the economic cycle.
• Unemployment. How it is measured, the main types and causes, and its consequences.
• Inflation and price stability. How inflation is measured with a price index, demand-pull versus cost-push causes, and its effects.
• Distribution of income and wealth. Income versus wealth, the causes of inequality and poverty, and how government redistributes.
• Living standards and sustainability. Measuring living standards beyond GDP, and economic, social and environmental sustainability.

The calculations to master

This module is data-heavy. Practise each calculation:

• growth rate $= \dfrac{\text{new GDP} - \text{old GDP}}{\text{old GDP}} \times 100$
• GDP per capita $= \dfrac{\text{GDP}}{\text{population}}$
• unemployment rate $= \dfrac{\text{number unemployed}}{\text{labour force}} \times 100$
• rate of inflation $= \dfrac{\text{new index} - \text{old index}}{\text{old index}} \times 100$

How it is assessed

This module is examined in J205/02: National and international economics, which is 1 hour 30 minutes, 80 marks and 50% of the GCSE. Expect multiple choice and calculation questions on GDP, unemployment and inflation, and longer Explain and Discuss questions on trade-offs, the causes of inflation and the costs and benefits of growth. A calculator is allowed.

How to revise this module

1. Learn the four objectives and their trade-offs. Be able to explain why growth and inflation, or growth and the environment, can conflict.
2. Drill the indicators. Calculate and interpret GDP per capita, the unemployment rate and the inflation rate from data.
3. Know the types and causes. Types of unemployment, demand-pull versus cost-push inflation, and the determinants of growth.
4. Practise evaluation. Weigh the costs and benefits of growth, and the link between growth, distribution and sustainability.

For the official specification

OCR publishes the full specification (J205), past papers and mark schemes at ocr.org.uk. Always revise from the current specification and OCR's own past papers.