Life in a Global Economy | Edexcel A-Level Economics B (9EB0)
Life in a Global Economy
- 155 questions
- 11 subtopics
- Theme 2: the wider economic environment
- Paper 2 and Paper 3
Life in a Global Economy is examined in Paper 2, Competing in the global economy, and in Paper 3, The economic environment and business.
It covers characteristics of globalisation, causes of globalisation over the last fifty years, growth in the UK and the BRIC economies, indicators of growth and development, developed, emerging and developing economies, mean and median incomes, specialisation and the gains from international trade, trading blocs, visible and invisible trade and the impact of cheap imports, exchange rate changes and their impact on firms and reading exchange rate and effective exchange rate data.
Sample questions from Life in a Global Economy
Answer each one closed book first, then open the answer.
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Characteristics of globalisation
Why has world trade grown faster than world output over the last fifty years?
Show the answer
Falling trade barriers and transport costs have made buying abroad cheaper, and firms have split production into global supply chains so components cross borders several times before the finished good is sold. -
Causes of globalisation over the last fifty years
Why was the opening up of China from the late 1970s so significant for globalisation?
Show the answer
It added a very large, low-cost labour force to the world trading system and turned China into the largest exporter of manufactured goods in the world. -
Growth in the UK and the BRIC economies
Why did growth in Brazil and Russia slow sharply in the middle of the 2010s?
Show the answer
Both depend heavily on exporting commodities, so the fall in oil and other commodity prices from 2014 cut their export earnings and pushed them into recession. -
Indicators of growth and development
Why is the adult literacy rate used as a development indicator?
Show the answer
Literacy shows whether the population has the basic education needed to take skilled work, use technology and obtain information, which income alone does not reveal. -
Developed, emerging and developing economies
Why does the service sector come to dominate a mature economy?
Show the answer
As incomes rise, spending shifts towards services such as leisure, finance and health care, which have high income elasticity of demand, while manufacturing is automated or moved offshore. -
Mean and median incomes
Explain why the median is the better guide to the income of a typical household.
Show the answer
The median is unaffected by extreme values at the top, so it describes the household in the middle rather than an average distorted by the very rich. -
Specialisation and the gains from international trade
How does specialisation lower average costs?
Show the answer
Concentrating on one product allows longer production runs and larger plants, so the firm and the industry gain economies of scale and unit costs fall. -
Trading blocs
What is a monetary union?
Show the answer
A monetary union is a group of countries that adopt a single currency and a single central bank setting one interest rate for them all.
The 11 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Characteristics of globalisation | Globalisation and its characteristics, foreign direct investment against portfolio investment, world trade growing faster than output, global supply chains, migration and its benefits to firms and costs to receiving countries, transnational companies, remittances, and vulnerability to shocks. | 14 |
| Causes of globalisation over the last fifty years | Trade liberalisation, the World Trade Organisation and falling tariffs, capital market liberalisation and the removal of exchange controls, the opening of China and the collapse of the Soviet Union, containerisation and transport costs, cheaper communications and offshored services, transnational companies, and why liberalisation can reverse. | 15 |
| Growth in the UK and the BRIC economies | Recall questions on the BRIC economies and how their growth compares with the United Kingdom's, catch-up growth, why Brazil and Russia slowed, and UK output and productivity after 2008. | 13 |
| Indicators of growth and development | GDP per capita and calculating it, purchasing power parity, why GDP per capita can overstate living standards, adult literacy, health indicators and life expectancy, the three dimensions and range of the Human Development Index with its advantages and gaps, and why investors look beyond income. | 15 |
| Developed, emerging and developing economies | The characteristics of developed, emerging and developing economies, the shift from agriculture to manufacturing and services, labour markets in developing economies, volatile and slow growth, why exporters target emerging economies, population structure, the informal economy and unreliable GDP figures, and classification as judgement. | 13 |
| Mean and median incomes | Calculating mean and median income, why the median is usually lower and a better guide to the typical household, a widening gap between them, rising mean income that households do not feel, choosing a measure for a retailer, relative poverty and the median, modal income, and comparing countries. | 12 |
| Specialisation and the gains from international trade | Specialisation in international trade, absolute and comparative advantage and their sources, lower average costs, the terms of trade and their index, trade and economic growth, import competition and productivity, the risks of over-specialisation, wider consumer choice, and the unequal distribution of gains. | 15 |
| Trading blocs | Trading blocs, free trade areas, customs unions, single markets and monetary unions, trade creation and trade diversion and its welfare cost, the benefits and costs of joining a customs union, rules of origin, monetary union across different economies, blocs against global free trade, and border paperwork for UK exporters. | 14 |
| Visible and invisible trade and the impact of cheap imports | Visible and invisible trade, the balance of trade in goods, the pattern of UK trade and calculating the overall trade balance, the other current account components, how cheap imports raise living standards and help manufacturers, their costs to the domestic economy, dumping, and inflation targets. | 14 |
| Exchange rate changes and their impact on firms | Exchange rates, depreciation against devaluation, the demand for a currency and Bank Rate, speculation, the effect of appreciation and depreciation on export and import prices and calculating them, why depreciation may not help exporters, the Marshall-Lerner condition and J-curve, hedging, and volatility and investment. | 17 |
| Reading exchange rate and effective exchange rate data | Recall questions on the effective exchange rate and its weighting, what an index of 100 means, calculating appreciation and depreciation, and reading a quoted rate the right way round. | 13 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel A-Level Economics B Active Recall Guide
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