158 Macro Economics AS Level Revision Notes Series Book 2 by Imran Latif

UNIT 1 AGGREGATE DEMAND (AD) AND AGGREGATE SUPPLY (AS)
CONCEPTS OF NATIONAL INCOME
SECTORS AND TYPES OF ECONOMIES:
AGGREGATE DEMAND (AD):
Why does the AD curve slope downward?
Changes in Aggregate Demand
AGGREGATE SUPPLY (AS)
The short-run aggregate supply curve
The shape of the long-run aggregate supply curve
INTERACTION OF AGGREGATE DEMAND AND AGGREGATE SUPPLY AND NATIONAL INCOME EQUILIBRIUM
CHANGES IN NATIONAL INCOME EQUILIBRIUM
BUSINESS (TRADE) CYCLE

UNIT 2 MONEY AND INFLATION
MONEY
History of specialization, trade, and money
Concepts
Features of money
Functions of money:
INFLATION
MEASUREMENT OF INFLATION / VALUE OF MONEY / COST OF LIVING
THE CAUSES OF INFLATION
Demand-pull Inflation
Cost-push Inflation
THE CONSEQUENCES OF INFLATION
Costs:
Benefits
CAUSES AND CONSEQUENCES OF DEFLATION
PAST PAPER QUESTIONS

UNIT 3 INTERNATIONAL TRADE
DOMESTIC AND INTERNATIONAL TRADE
THEORIES OF INTERNATIONAL TRADE:
Theory of absolute advantage
Theory of Comparative advantage
Mutually beneficial rate of exchange:
Trading possibility curve (TPC):
LIMITATIONS OF ABSOLUTE AND COMPARATIVE ADVANTAGE THEORY:
PROTECTIONISM
Methods of protection and their impact
Effectiveness of protectionism:
THE ARGUMENTS IN FAVOR OF FREE TRADE AND AGAINST PROTECTIONISM
THE ARGUMENTS IN FAVOR OF PROTECTIONISM AND AGAINST FREE TRADE
TRADE BLOCS OR INTERNATIONAL ECONOMIC INTEGRATION
CONSEQUENCES OF FORMATION OF TRADING BLOCS:
1 creation (Micro Economics Notes)
2 diversion
PAST PAPERS QUESTION
4 Micro Economics Notes

UNIT 4 EXCHANGE RATE
DEFINITIONS AND MEASUREMENT OF EXCHANGE RATES
EXCHANGE RATE SYSTEMS
Free Floating Exchange Rate System
Fixed Exchange Rate System
CAUSES OF EXCHANGE RATE DEPRECIATION
CAUSES OF EXCHANGE RATE APPRECIATION
EFFECTS OF DEPRECIATION/DEVALUATION
EFFECTS OF APPRECIATION/REVALUATION
ADVANTAGES AND DISADVANTAGES OF EXCHANGE RATE SYSTEMS:
Managed floating system
THE TERMS OF TRADE
Movements in Terms of Trade
The Impact of changes in the terms of trade
PAST PAPER QUESTIONS

UNIT 5 BALANCE OF PAYMENTS
COMPONENTS OF THE BALANCE OF PAYMENTS
BALANCE OF PAYMENT DISEQUILIBRIUM
CAUSES OF BALANCE OF PAYMENT DISEQUILIBRIUM
CONSEQUENCES OF A CURRENT ACCOUNT DEFICIT AND A CURRENT ACCOUNT SURPLUS
Consequences of current account deficit:
Consequences of current account surplus:
PAST PAPER QUESTIONS

UNIT 6 GOVERNMENT INTERVENTION IN A MACRO-ECONOMY
MACROECONOMIC POLICIES:
1 policy
2 policy
3-side policy
POLICIES TO CORRECT CURRENT ACCOUNT DEFICIT
1-switching policies:
2-dampening policies:
POLICIES TO REDUCE CURRENT ACCOUNT SURPLUS:
POLICIES TO CORRECT DEMAND-PULL INFLATION
POLICIES TO CORRECT COST-PUSH INFLATION
POLICIES TO CORRECT DEFLATION AND THEIR EFFECTIVENESS
PAST PAPER QUESTIONS