FROM AS TO A2 Quintin Brewer 27 June 2007

WIDER READING (1) Newspapers and journals: The Economist Sunday Times (David Smith) Times Sunday Telegraph (Liam Halligan) Independent on Sunday Independent esp. Monday & Thursday Observer (William Keegan) Guardian esp. Monday (Larry Elliot)

WIDER READING (2) Books: Why not try: Free Lunch: David Smith (Profile Books) Eat the Rich: PJ ORouke The Great Crash: JK Galbraith (Penguin) Key ideas in Economics R & D Dransfield (Nelson Thornes)

WIDER READING (3) The Undercover Economist: Tim Harford Making Globalisation Work: Joseph Stiglitz Freakonomics: Steven Levitt & Stephen Dubner The Truth about Markets: John Kay

WIDER READING (4) Read articles/books critically …. What is positive? What is normative? Which economic concepts can be applied? What analysis is relevant? What information is missing?

Extended Writing at A2 Need to write essays and extended responses (to some parts of data qs) These requires ability to …….. develop a coherent argument apply concepts explain transmission mechanisms fully evaluate data, theories, ideas

SYNOPTIC ASSESSMENT AT A2 All syllabuses include synoptic assessment in one or more A2 modules Therefore, dont forget what youve learned in AS! You may need to use concepts from AS in your answers to A2 questions e.g. micro supply & demand; elasticities; AD/AS analysis

Assess the view that the main aim of government economic policy should be economic growth. 1. : INTRODUCTION: Knowledge, understanding and application: Meaning of economic growth….. increase in real GDP; associated with a rightward shift in PPF or LRAS curve Analysis: associated with a rightward shift in PPF or LRAS curve Evaluation: in practice difficult to measure increase in productive capacity

Growth as an aim of economic policy (2) 2. BENEFITS OF GROWTH: Knowledge, understanding and application: ~ to consumers:… Analysis: Growth implies higher real incomes so consumers can afford to buy more goods and services Evaluation: Extent of impact depends on how much incomes rise; whether or not the marginal propensity to save changes; impact of taxes e.g. fiscal drag

Growth as an aim of economic policy (3) 3. BENEFITS OF GROWTH TO BUSINESSES: Knowledge, understanding and application: Increase in sales; increase in profits Analysis: Higher real incomes lead to increase in consumption (C is over 60% of GDP) Evaluation: Impact on consumption of domestic goods might be limited if the MPM (marginal propensity to import is high)

Growth as an aim of economic policy (4) 4. BENEFITS OF GROWTH TO THE GOVERNMENT : Knowledge, understanding and application: Increase in tax revenues Analysis: Increased real incomes imply increase AD. Workers earn higher incomes and pay more tax. Also, more people employed who are subject to taxes on incomes and increased spending. Evaluation:….

Growth as an aim of economic policy – The downsides Opportunity cost of growth External costs of growth Increased inequality

Growth as an aim of economic policy. The downsides (2) Costs to individuals and society Inflation Deterioration in the trade in goods and services balance

Growth as an aim of economic policy – other objectives Given the problems of pursuing growth what about alternative objectives? Low inflation Low unemployment B/P equilibrium

Now consider this…. Evaluate the likely economic effects of a substantial increase in immigration on the UK economy. Plan an answer; assume each issue will form a paragraph.

DEVELOPING YOUR SKILLS Apply economics to everything you do! How about: The economics of relationships? The economic case for and against taking a gap year? The case for and against doing a non- vocational degree