Macroeconomics: Economic Policy Objectives | OCR A-Level Economics (H460)

Macroeconomics: Economic Policy Objectives

202 questions
16 subtopics
Component 02: Macroeconomics
Component 02 and Component 03

Economic Policy Objectives is examined on component 02 of OCR Economics, Macroeconomics.

202 recall questions across 16 subtopics.

Sample questions from Macroeconomics: Economic Policy Objectives

Answer each one closed book first, then open the answer.

Economic growth, real and nominal GDP and GDP per capita

Why can nominal GDP rise in a year when real GDP falls?

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Because prices can rise fast enough that the higher money value of output conceals a fall in the physical quantity actually produced.
Economic structure, deindustrialisation and sustainable development

How do the shares of the three sectors typically change as a country develops?

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The primary sector's share of output and employment falls, the secondary sector's share rises and then declines, and the tertiary sector's share rises until it dominates.
Employment, unemployment rates and the objective of full employment

What does it mean to be economically inactive?

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To be of working age but neither in work nor actively seeking it, for example students, carers, the long-term sick and the early retired.
Inflation, deflation, real values and the CPI and RPI

What is the United Kingdom's inflation target, and who sets policy to meet it?

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A 2% annual rise in the Consumer Prices Index, which the Bank of England's Monetary Policy Committee sets interest rates to achieve.
Balance of payments accounts and current account calculations

What is recorded under trade in goods?

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Exports and imports of physical, tangible products such as cars, food, machinery and oil.
Key trends in UK macroeconomic performance

What is the productivity puzzle?

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The observation that growth in United Kingdom output per hour worked slowed sharply after the financial crisis and remained weak, even though employment recovered strongly.
Income and wealth, redistribution and absolute and relative poverty

Why do governments pursue a more even distribution of income?

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To reduce poverty and its social costs, to raise overall welfare because an extra pound is worth more to a poor household than a rich one, and to sustain social cohesion.
The natural rate of unemployment and Keynesian and neo-classical aggregate supply

What shape does the Keynesian aggregate supply curve take?

Show the answer
It has three sections, horizontal at low levels of output, then upward-sloping, then vertical at the full-capacity level of output, giving an overall reverse-L shape.

The 16 subtopics

One subtopic is one session. Work down the list.

Subtopic	What it covers	Questions
Economic growth, real and nominal GDP and GDP per capita	Recall questions on economic growth as a policy objective, nominal and real GDP, calculating growth rates, and GDP per capita with worked calculations.	12
Short and long run growth, the economic cycle and the effects of growth	Recall questions on short and long run growth, the four stages of the economic cycle, recession, the trend rate, growth on diagrams, its causes, benefits and environmental costs.	14
Economic structure, deindustrialisation and sustainable development	Recall questions on the primary, secondary and tertiary sectors, deindustrialisation and its regional effects, sustainable development, and how growth supports or conflicts with it.	12
Limitations of GDP and the Human Development Index	Recall questions on the limitations of GDP as a measure of living standards, the Human Development Index and its calculation, alternative indicators and purchasing power parity.	12
Employment, unemployment rates and the objective of full employment	Recall questions on employment, unemployment, the labour force and economic inactivity, unemployment and participation rate calculations, underemployment and the objective of full employment.	10
Measures, types and costs of unemployment and the effects of full employment	Recall questions on the Labour Force Survey and claimant count, cyclical, frictional, structural, seasonal and real wage unemployment, hysteresis, and the costs and benefits of full employment.	16
Inflation, deflation, real values and the CPI and RPI	Recall questions on inflation, deflation, disinflation and hyperinflation, the UK inflation target, nominal and real values, and how the CPI and RPI are built and differ.	15
Calculating inflation with index numbers and its causes and consequences	Recall questions on calculating inflation and price indices from index numbers, demand-pull and cost-push inflation, the wage-price spiral, and the costs of inflation and deflation.	11
Balance of payments accounts and current account calculations	Recall questions on the current, capital and financial accounts, trade in goods and services, primary and secondary income, and balance of payments calculations.	15
Causes and consequences of current account imbalances	Recall questions on a sustainable balance of payments, how competitiveness, exchange rates and growth cause current account deficits, and the consequences and financing of imbalances.	11
Key trends in UK macroeconomic performance	Recall questions on the indicators used to judge performance and key UK trends in growth, productivity, unemployment, inflation, the current account and government debt.	12
Comparing UK performance internationally and the limits of economic data	Recall questions on UK growth compared with developed and emerging economies, convergence, and why macroeconomic data, models and seasonal adjustment need careful interpretation.	10
Income and wealth, redistribution and absolute and relative poverty	Recall questions on income and wealth, original and disposable income, equivalised income, policies and arguments on redistribution, and absolute and relative poverty with calculations.	12
Lorenz curves, the Gini coefficient and the causes of poverty	Recall questions on mean and median incomes, quintiles and deciles, constructing Lorenz curves, calculating the Gini coefficient, and the causes and consequences of poverty and inequality.	14
The natural rate of unemployment and Keynesian and neo-classical aggregate supply	Recall questions on the natural rate of unemployment and NAIRU, and the Keynesian and neo-classical aggregate supply curves with their different policy implications.	15
Short and long run Phillips Curves and their usefulness	Recall questions on the short run and long run Phillips Curves, what shifts them, the adjustment to expansionary policy, stagflation, and the curve's usefulness to policymakers.	11

Macroeconomics: Economic Policy Objectives is 202 of the 1,226 questions in the guide.Get the guide, £8

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.

Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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.
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.