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ScotlandEconomics

UK Economic Activity

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

What is the UK government trying to achieve in the economy, and how is success measured?

The main macroeconomic aims of the UK government - economic growth, low inflation, low unemployment and a stable balance of payments - how each is measured, and the conflicts between them.
An SQA Higher Economics answer on the government's macroeconomic aims, covering economic growth, low and stable inflation, low unemployment and a sustainable balance of payments, the indicators used to measure each (GDP, CPI, the unemployment rate), and the conflicts between the aims.
12 min answer →

How does the government raise and spend money, and what does the budget balance mean?

Government finance: the sources of government revenue (direct and indirect taxation), the main areas of public spending, and the meaning of a budget surplus, deficit and the national debt.
An SQA Higher Economics answer on government finance, covering the sources of government revenue through direct and indirect taxes, the main areas of public spending, the difference between a budget surplus and deficit, the national debt, and the difference between progressive, proportional and regressive taxes.
12 min answer →

What policy tools can the government use to manage the economy, and what are their limits?

Government policies: fiscal policy, monetary policy and supply-side policy, how each works to influence the macroeconomic aims, and their limitations.
An SQA Higher Economics answer on government policies, covering fiscal policy (taxation and spending), monetary policy (interest rates and the money supply, set by the Bank of England), and supply-side policy (raising productive capacity), how each affects the macroeconomic aims, and the limitations of each.
13 min answer →

How does money flow around the economy, and what makes national income rise or fall?

National income and the circular flow of income: the circular flow model with injections and leakages, the meaning of national income (GDP), and the multiplier effect.
An SQA Higher Economics answer on national income and the circular flow, covering the circular flow of income between households and firms, the injections (investment, government spending, exports) and leakages (saving, taxation, imports) that change it, the meaning of national income and GDP, and the multiplier effect.
12 min answer →

How does Scotland's economy fit within the UK, and what powers does it have over it?

The place of Scotland in the UK economy: the structure of the Scottish economy, the division of economic powers between the Scottish and UK governments, and Scotland's key industries and trade.
An SQA Higher Economics answer on Scotland's place in the UK economy, covering the structure of the Scottish economy and its main industries, the division of fiscal and economic powers between the Scottish and UK governments (including devolved tax and spending), and Scotland's trade with the rest of the UK and the world.
11 min answer →