Economics | 0455

The basic economic problem - The nature of the basic economic problem - Definition of the basic economic problem The basic economic problem - The nature of the basic economic problem - The concept of scarcity The basic economic problem - The nature of the basic economic problem - Examples of the basic economic problem in the context of consumers The basic economic problem - The nature of the basic economic problem - Examples of the basic economic problem in the context of workers The basic economic problem - The nature of the basic economic problem - Examples of the basic economic problem in the context of producers/firms The basic economic problem - The nature of the basic economic problem - Examples of the basic economic problem in the context of governments The basic economic problem - Resource allocation decisions - The three basic economic questions which determine resource allocation: what to produce The basic economic problem - Resource allocation decisions - The three basic economic questions which determine resource allocation: how to produce The basic economic problem - Resource allocation decisions - The three basic economic questions which determine resource allocation: who to produce for The basic economic problem - Economic goods and free goods - The difference between economic goods and free goods The basic economic problem - Factors of production - Definitions of factors of production: land, labour, capital and enterprise The basic economic problem - Factors of production - Rewards to factors of production: rent, wages, interest and profit The basic economic problem - Factors of production - Causes of changes in the quantity and quality of factors of production The basic economic problem - Opportunity cost - Definition of opportunity cost The basic economic problem - Opportunity cost - Examples of opportunity cost in different contexts The basic economic problem - Opportunity cost - Decisions made by consumers, workers, producers/firms and governments when allocating their resources The basic economic problem - Production possibility curve (PPC) diagrams - Definition of production possibility curves (PPC) The basic economic problem - Production possibility curve (PPC) diagrams - Drawing and interpretation of the PPC diagram The basic economic problem - Production possibility curve (PPC) diagrams - The significance of the location of different production points The basic economic problem - Production possibility curve (PPC) diagrams - The significance of movements along a PPC and opportunity cost The basic economic problem - Production possibility curve (PPC) diagrams - Causes and consequences of shifts of a PPC in terms of an economy's growth The allocation of resources - The role of markets in allocating resources - Definition of a market The allocation of resources - The role of markets in allocating resources - Examples of markets The allocation of resources - The role of markets in allocating resources - Roles of buyers and sellers The allocation of resources - Demand - Definition of demand The allocation of resources - Demand - Link between individual demand and market demand The allocation of resources - Demand - Drawing and interpretation of the demand diagram The allocation of resources - Demand - Causes of extensions and contractions in demand The allocation of resources - Demand - Diagrams that illustrate movements along a demand curve The allocation of resources - Demand - Causes of decreases and increases in demand The allocation of resources - Demand - Diagrams that illustrate shifts of a demand curve The allocation of resources - Supply - Definition of supply The allocation of resources - Supply - Link between individual supply and market supply The allocation of resources - Supply - Drawing and interpretation of the supply diagram The allocation of resources - Supply - Causes of extensions and contractions in supply The allocation of resources - Supply - Diagrams that illustrate movements along a supply curve The allocation of resources - Supply - Causes of decreases and increases in supply The allocation of resources - Supply - Diagrams that illustrate shifts of a supply curve The allocation of resources - Price determination - How the price mechanism provides answers to the basic resource allocation decisions of what, how and for whom to produce The allocation of resources - Price determination - Definition of market equilibrium The allocation of resources - Price determination - Interpretation of equilibrium using demand and supply schedules The allocation of resources - Price determination - Drawing and interpretation of equilibrium using demand and supply curves The allocation of resources - Price determination - Definition of market disequilibrium The allocation of resources - Price determination - Interpretation of disequilibrium using demand and supply schedules The allocation of resources - Price determination - Drawing and interpretation of disequilibrium using demand and supply curves The allocation of resources - Price determination - Shortages (demand exceeding supply) and surpluses (supply exceeding demand) The allocation of resources - Price changes - How price changes are caused by changes in demand and supply The allocation of resources - Price changes - Effect of price changes on sales The allocation of resources - Price changes - Use of demand and supply diagrams to illustrate the impact of changes in market conditions The allocation of resources - Price elasticity of demand (PED) - Definition of PED The allocation of resources - Price elasticity of demand (PED) - Calculation of PED using the formula The allocation of resources - Price elasticity of demand (PED) - Interpretation of the significance of the PED value: perfectly inelastic, inelastic, unitary, elastic, perfectly elastic The allocation of resources - Price elasticity of demand (PED) - Drawing and interpretation of demand curve diagrams to show different PED The allocation of resources - Price elasticity of demand (PED) - Main influences on whether demand is elastic or inelastic The allocation of resources - Price elasticity of demand (PED) - Effect of price changes on the amount spent by consumers and revenue raised by firms, shown both in a diagram and as a calculation The allocation of resources - Price elasticity of demand (PED) - Relationship between PED and the amount spent by consumers and revenue raised by firms The allocation of resources - Price elasticity of demand (PED) - Implications of PED for decision-making by consumers, workers, producers/firms and government The allocation of resources - Price elasticity of supply (PES) - Definition of PES The allocation of resources - Price elasticity of supply (PES) - Calculation of PES using the formula The allocation of resources - Price elasticity of supply (PES) - Interpretation of the significance of the PES value: perfectly inelastic, inelastic, unitary, elastic, perfectly elastic The allocation of resources - Price elasticity of supply (PES) - Drawing and interpretation of supply curve diagrams to show different PES The allocation of resources - Price elasticity of supply (PES) - Main influences on whether supply is elastic or inelastic The allocation of resources - Market economic system - Definition of the market economic system The allocation of resources - Market economic system - Advantages of the market economic system The allocation of resources - Market economic system - Disadvantages of the market economic system The allocation of resources - Market failure - Definition of market failure The allocation of resources - Market failure - Definitions of terms associated with market failure: public goods, merit goods, demerit goods, private benefits, external benefits, social benefits, private costs, external costs, social costs, monopoly The allocation of resources - Market failure - Causes of market failure relating to public goods, merit goods, demerit goods, external costs and external benefits, abuse of monopoly power The allocation of resources - Market failure - Implications of misallocation of resources in relation to the over-consumption of demerit goods and goods with external costs The allocation of resources - Market failure - Implications of misallocation of resources in relation to the under-consumption of merit goods and goods with external benefits The allocation of resources - Market failure - Implications of misallocation of resources in relation to the non-provision of public goods The allocation of resources - Market failure - Implications of misallocation of resources in relation to restricted supply causing higher prices under a monopoly The allocation of resources - Mixed economic system - Definition of the mixed economic system The allocation of resources - Mixed economic system - Advantages of the mixed economic system The allocation of resources - Mixed economic system - Disadvantages of the mixed economic system The allocation of resources - Mixed economic system - Definitions, drawing and interpretation of diagrams, advantages and disadvantages of maximum and minimum prices in product markets The allocation of resources - Mixed economic system - Definitions, drawing and interpretation of diagrams, advantages and disadvantages of indirect taxation The allocation of resources - Mixed economic system - Definitions, drawing and interpretation of diagrams, advantages and disadvantages of subsidies The allocation of resources - Mixed economic system - Definitions, advantages and disadvantages of regulation The allocation of resources - Mixed economic system - Definitions, advantages and disadvantages of privatisation The allocation of resources - Mixed economic system - Definitions, advantages and disadvantages of nationalisation The allocation of resources - Mixed economic system - Definitions, advantages and disadvantages of direct provision of goods and services The allocation of resources - Mixed economic system - Definitions, advantages and disadvantages of quotas, e.g. for the extraction of natural resources Microeconomic decision-makers - Money and banking - Forms, functions and characteristics of money Microeconomic decision-makers - Money and banking - Role and importance of central banks Microeconomic decision-makers - Money and banking - Role and importance of commercial banks Microeconomic decision-makers - Households - Influences on households' spending, saving and borrowing: income Microeconomic decision-makers - Households - Influences on households' spending, saving and borrowing: rate of interest Microeconomic decision-makers - Households - Influences on households' spending, saving and borrowing: confidence Microeconomic decision-makers - Households - Influences on households' spending, saving and borrowing: age Microeconomic decision-makers - Households - Influences on households' spending, saving and borrowing: culture Microeconomic decision-makers - Workers - Factors affecting an individual's choice of occupation: wage and non-wage factors Microeconomic decision-makers - Workers - Influences of the demand for labour and the supply of labour on wage determination Microeconomic decision-makers - Workers - Trade unions and their relative bargaining power on wage determination Microeconomic decision-makers - Workers - Government policy, including national minimum wage (NMW) on wage determination Microeconomic decision-makers - Workers - Drawing and interpretation of diagrams that illustrate the effects of changes in demand and supply in the labour market Microeconomic decision-makers - Workers - Drawing and interpretation of diagrams illustrating national minimum wages Microeconomic decision-makers - Workers - Reasons for differences in wages: demand for and supply of labour Microeconomic decision-makers - Workers - Reasons for differences in wages: relative bargaining strengths Microeconomic decision-makers - Workers - Reasons for differences in wages: discrimination, e.g. male/female Microeconomic decision-makers - Workers - Reasons for differences in wages: government policy Microeconomic decision-makers - Workers - How these reasons influence the wages of workers, depending on level of skills of workers Microeconomic decision-makers - Workers - How these reasons influence the wages of workers, depending on economic sector workers operate in: primary/secondary/tertiary Microeconomic decision-makers - Workers - How these reasons influence the wages of workers, depending on discrimination between workers, e.g. male/female Microeconomic decision-makers - Workers - How these reasons influence the wages of workers, depending on whether the worker is working in the private sector or public sector Microeconomic decision-makers - Workers - Causes of changes in the occupational and geographical mobility of labour Microeconomic decision-makers - Workers - Consequences of changes in the occupational and geographical mobility of labour Microeconomic decision-makers - Workers - Definition of division of labour (worker specialisation) Microeconomic decision-makers - Workers - Advantages and disadvantages of division of labour Microeconomic decision-makers - Firms - Primary/secondary/tertiary sector firms Microeconomic decision-makers - Firms - Private sector/public sector firms Microeconomic decision-makers - Firms - Advantages and disadvantages of small and large firms Microeconomic decision-makers - Firms - Definitions, examples, advantages and disadvantages of different types of mergers: horizontal, vertical and conglomerate Microeconomic decision-makers - Firms - How internal and external economies and diseconomies of scale can affect a firm/industry as the scale of production changes Microeconomic decision-makers - Firms - Drawing and interpretation of average total cost (ATC) diagrams to illustrate economies and diseconomies of scale Microeconomic decision-makers - Firms and production - Influences on the demand for factors of production: demand for the product, the price of different factors of production, their availability and their productivity Microeconomic decision-makers - Firms and production - Reasons for adopting labour-intensive and capital-intensive production Microeconomic decision-makers - Firms and production - Advantages and disadvantages of labour-intensive and capital-intensive production Microeconomic decision-makers - Firms and production - The difference between production and productivity Microeconomic decision-makers - Firms and production - Influences on production and productivity Microeconomic decision-makers - Firms and production - Effects of changes in investment on productivity Microeconomic decision-makers - Firms' costs, revenue and objectives - Definitions of costs of production: total cost (TC), average total cost (ATC), fixed cost (FC), average fixed cost (AFC), variable cost (VC), average variable cost (AVC) Microeconomic decision-makers - Firms' costs, revenue and objectives - Calculation of TC, ATC, FC, AFC, VC and AVC Microeconomic decision-makers - Firms' costs, revenue and objectives - Drawing and interpretation of diagrams that show how changes in output affect costs of production Microeconomic decision-makers - Firms' costs, revenue and objectives - Definitions of total revenue (TR) and average revenue (AR) Microeconomic decision-makers - Firms' costs, revenue and objectives - Calculation of TR and AR Microeconomic decision-makers - Firms' costs, revenue and objectives - The influence of sales on revenue Microeconomic decision-makers - Firms' costs, revenue and objectives - Objectives of firms: survival, social welfare, profit maximisation and growth Microeconomic decision-makers - Types of markets - Characteristics, advantages and disadvantages of competitive markets Microeconomic decision-makers - Types of markets - Effect of having a high number of firms on price, quality, choice, profit Microeconomic decision-makers - Types of markets - Characteristics, advantages and disadvantages of monopoly markets Microeconomic decision-makers - Types of markets - Effect of having only one firm on price, quality, choice, profit Government and the macroeconomy - Government macroeconomic intervention - The macroeconomic aims of government: economic growth Government and the macroeconomy - Government macroeconomic intervention - The macroeconomic aims of government: full employment/low unemployment Government and the macroeconomy - Government macroeconomic intervention - The macroeconomic aims of government: stable prices/low inflation Government and the macroeconomy - Government macroeconomic intervention - The macroeconomic aims of government: balance of payments stability Government and the macroeconomy - Government macroeconomic intervention - The macroeconomic aims of government: redistribution of income Government and the macroeconomy - Government macroeconomic intervention - The macroeconomic aims of government: environmental sustainability Government and the macroeconomy - Government macroeconomic intervention - Reasons behind the choice of aims and the criteria that governments may set for meeting each aim Government and the macroeconomy - Government macroeconomic intervention - Possible conflicts between macroeconomic aims: full employment and stable prices Government and the macroeconomy - Government macroeconomic intervention - Possible conflicts between macroeconomic aims: economic growth and environmental sustainability Government and the macroeconomy - Government macroeconomic intervention - Possible conflicts between macroeconomic aims: full employment and balance of payments stability Government and the macroeconomy - Fiscal policy - Definitions of government budget Government and the macroeconomy - Fiscal policy - Definitions of government budget deficit Government and the macroeconomy - Fiscal policy - Definitions of government budget surplus Government and the macroeconomy - Fiscal policy - Calculations of the size of a government budget deficit/surplus Government and the macroeconomy - Fiscal policy - Main areas of government spending and the reasons for and effects of spending in these areas Government and the macroeconomy - Fiscal policy - Reasons for taxation: raising revenue, discouraging consumption of demerit goods, reducing imports, redistributing income, influencing total demand, encouraging environmental sustainability Government and the macroeconomy - Fiscal policy - Examples of the different classifications of tax: progressive, regressive, proportional; direct, indirect Government and the macroeconomy - Fiscal policy - Impact of taxation on consumers, workers, producers/firms, the government and the economy Government and the macroeconomy - Fiscal policy - Definition of fiscal policy Government and the macroeconomy - Fiscal policy - Fiscal policy measures: changes in taxes Government and the macroeconomy - Fiscal policy - Fiscal policy measures: changes in government spending Government and the macroeconomy - Fiscal policy - How fiscal policy measures may enable a government to achieve its macroeconomic aims Government and the macroeconomy - Monetary policy - Definitions of money supply and monetary policy Government and the macroeconomy - Monetary policy - Monetary policy measures: changes in interest rate Government and the macroeconomy - Monetary policy - Monetary policy measures: changes in money supply Government and the macroeconomy - Monetary policy - Monetary policy measures: changes in foreign exchange rate Government and the macroeconomy - Monetary policy - How monetary policy measures may enable a government to achieve its macroeconomic aims Government and the macroeconomy - Supply-side policy - Definition of supply-side policy Government and the macroeconomy - Supply-side policy - Supply-side policy measures: education and training Government and the macroeconomy - Supply-side policy - Supply-side policy measures: infrastructure spending Government and the macroeconomy - Supply-side policy - Supply-side policy measures: labour market reforms Government and the macroeconomy - Supply-side policy - Supply-side policy measures: lower direct taxes Government and the macroeconomy - Supply-side policy - Supply-side policy measures: deregulation Government and the macroeconomy - Supply-side policy - Supply-side policy measures: improving incentives to work and invest Government and the macroeconomy - Supply-side policy - Supply-side policy measures: privatisation Government and the macroeconomy - Supply-side policy - How supply-side policy measures may enable a government to achieve its macroeconomic aims Government and the macroeconomy - Economic growth - Definition of economic growth Government and the macroeconomy - Economic growth - Measurement of economic growth: real Gross Domestic Product (GDP) Government and the macroeconomy - Economic growth - How economic growth may be caused by an increase in total demand, an increase in the quantity of resources or an increase in the quality of resources Government and the macroeconomy - Economic growth - Advantages and disadvantages of economic growth Government and the macroeconomy - Economic growth - Definition of recession Government and the macroeconomy - Economic growth - How a recession may be caused by a decrease in total demand, a decrease in the quantity of resources or a decrease in the quality of resources Government and the macroeconomy - Economic growth - Consequences of recession for consumers, workers, producers/firms and the government Government and the macroeconomy - Economic growth - The range of policies available to promote economic growth and their effectiveness Government and the macroeconomy - Employment and unemployment - Definitions of employment, unemployment and full employment Government and the macroeconomy - Employment and unemployment - How unemployment is measured (labour force survey) Government and the macroeconomy - Employment and unemployment - Formula for the unemployment rate Government and the macroeconomy - Employment and unemployment - Causes/types of unemployment: frictional unemployment Government and the macroeconomy - Employment and unemployment - Causes/types of unemployment: structural unemployment Government and the macroeconomy - Employment and unemployment - Causes/types of unemployment: cyclical unemployment Government and the macroeconomy - Employment and unemployment - Causes/types of unemployment: seasonal unemployment Government and the macroeconomy - Employment and unemployment - Consequences of unemployment for the individual, producers/firms, the government and the economy Government and the macroeconomy - Employment and unemployment - The range of policies available to reduce unemployment and their effectiveness Government and the macroeconomy - Inflation - Definitions of inflation and deflation Government and the macroeconomy - Inflation - Measurement of inflation using the Consumer Prices Index (CPI) Government and the macroeconomy - Inflation - Causes of inflation: demand-pull Government and the macroeconomy - Inflation - Causes of inflation: cost-push Government and the macroeconomy - Inflation - How inflation affects savers, lenders and borrowers Government and the macroeconomy - Inflation - Consequences of inflation for consumers, workers, producers/firms and the economy Government and the macroeconomy - Inflation - The range of policies available to control inflation and their effectiveness Economic development - Living standards - Indicators of living standards: real Gross Domestic Product (GDP) per head Economic development - Living standards - Indicators of living standards: Human Development Index (HDI) and its components Economic development - Living standards - Advantages and disadvantages of real GDP per head and HDI as indicators Economic development - Living standards - Reasons for differences in living standards and income distribution within and between countries Economic development - Poverty - Difference between absolute poverty and relative poverty Economic development - Poverty - Causes of poverty: unemployment Economic development - Poverty - Causes of poverty: low wages Economic development - Poverty - Causes of poverty: illness Economic development - Poverty - Causes of poverty: age Economic development - Poverty - Causes of poverty: environmental factors Economic development - Poverty - Policies to alleviate poverty and redistribute income: promoting economic growth Economic development - Poverty - Policies to alleviate poverty and redistribute income: improved education Economic development - Poverty - Policies to alleviate poverty and redistribute income: improved healthcare provision Economic development - Poverty - Policies to alleviate poverty and redistribute income: more generous state benefits Economic development - Poverty - Policies to alleviate poverty and redistribute income: progressive taxation Economic development - Poverty - Policies to alleviate poverty and redistribute income: national minimum wage (NMW) Economic development - Population - Definitions of birth rate Economic development - Population - Definitions of death rate Economic development - Population - Definitions of net migration, immigration and emigration Economic development - Population - How birth rates, death rates and net migration can vary between countries Economic development - Population - Reasons why birth rates, death rates and net migration rates can vary between countries Economic development - Population - The concept of an optimum population Economic development - Population - The effects of increases and decreases in population size and changes in the age and gender distribution of population Economic development - Differences in economic development between countries - Differences in income Economic development - Differences in economic development between countries - Differences in productivity Economic development - Differences in economic development between countries - Differences in population growth Economic development - Differences in economic development between countries - Differences in size of primary, secondary and tertiary sectors Economic development - Differences in economic development between countries - Differences in saving and investment Economic development - Differences in economic development between countries - Differences in education Economic development - Differences in economic development between countries - Differences in healthcare Economic development - Differences in economic development between countries - Differences in natural resources International trade and globalisation - Specialisation and free trade - Definition of specialisation by country International trade and globalisation - Specialisation and free trade - The basis for specialisation by country in terms of the best resource allocation and/or low-cost production International trade and globalisation - Specialisation and free trade - Advantages and disadvantages of specialisation International trade and globalisation - Specialisation and free trade - Definition of free trade International trade and globalisation - Specialisation and free trade - Advantages and disadvantages of free trade International trade and globalisation - Globalisation and trade restrictions - Definition of globalisation International trade and globalisation - Globalisation and trade restrictions - Causes of changes in globalisation: changes in trade restrictions International trade and globalisation - Globalisation and trade restrictions - Causes of changes in globalisation: changes in transport costs International trade and globalisation - Globalisation and trade restrictions - Causes of changes in globalisation: changes in communication costs International trade and globalisation - Globalisation and trade restrictions - Causes of changes in globalisation: movement of multinational companies (MNCs) International trade and globalisation - Globalisation and trade restrictions - Effects of changes in globalisation on international trade International trade and globalisation - Globalisation and trade restrictions - Effects of changes in globalisation on competition International trade and globalisation - Globalisation and trade restrictions - Effects of changes in globalisation on the environment International trade and globalisation - Globalisation and trade restrictions - Effects of changes in globalisation on migration International trade and globalisation - Globalisation and trade restrictions - Effects of changes in globalisation on income distribution International trade and globalisation - Globalisation and trade restrictions - Effects of changes in globalisation on economic development International trade and globalisation - Globalisation and trade restrictions - MNCs and their advantages and disadvantages to host countries and home countries International trade and globalisation - Globalisation and trade restrictions - Types of trade restrictions / methods of protection: tariffs International trade and globalisation - Globalisation and trade restrictions - Types of trade restrictions / methods of protection: import quotas International trade and globalisation - Globalisation and trade restrictions - Types of trade restrictions / methods of protection: subsidies International trade and globalisation - Globalisation and trade restrictions - Types of trade restrictions / methods of protection: embargoes International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: protect infant (sunrise) industries International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: protect declining (sunset) industries International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: protect strategic industries International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: avoid dumping International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: reduce a deficit on the current account of the balance of payments International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: raise tax revenue International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: restrict the import of demerit goods International trade and globalisation - Globalisation and trade restrictions - Reasons for trade restrictions: promote environmental sustainability International trade and globalisation - Globalisation and trade restrictions - Impact of trade restrictions on the home country and its trading partners International trade and globalisation - Globalisation and trade restrictions - Advantages and disadvantages of restricting free trade International trade and globalisation - Foreign exchange rates - Definition of foreign exchange rate International trade and globalisation - Foreign exchange rates - Reasons for buying and selling foreign currencies: trade in goods and services International trade and globalisation - Foreign exchange rates - Reasons for buying and selling foreign currencies: speculation International trade and globalisation - Foreign exchange rates - Reasons for buying and selling foreign currencies: government intervention in currency markets International trade and globalisation - Foreign exchange rates - Reasons for buying and selling foreign currencies: payment of profit, interest and dividends between countries International trade and globalisation - Foreign exchange rates - Reasons for buying and selling foreign currencies: workers' remittances International trade and globalisation - Foreign exchange rates - Reasons for buying and selling foreign currencies: investment in capital goods between countries International trade and globalisation - Foreign exchange rates - Definitions of floating exchange rate, appreciation and depreciation International trade and globalisation - Foreign exchange rates - The demand for and supply of a currency International trade and globalisation - Foreign exchange rates - The determination of the equilibrium foreign exchange rate International trade and globalisation - Foreign exchange rates - Causes of foreign exchange rate fluctuations: changes in demand for exports and imports International trade and globalisation - Foreign exchange rates - Causes of foreign exchange rate fluctuations: changes in the interest rate International trade and globalisation - Foreign exchange rates - Causes of foreign exchange rate fluctuations: speculation International trade and globalisation - Foreign exchange rates - Effects of changes in foreign exchange rates on prices and demand for exports and imports International trade and globalisation - Current account of the balance of payments - Components of the current account of the balance of payments: trade in goods International trade and globalisation - Current account of the balance of payments - Components of the current account of the balance of payments: trade in services International trade and globalisation - Current account of the balance of payments - Components of the current account of the balance of payments: primary income International trade and globalisation - Current account of the balance of payments - Components of the current account of the balance of payments: secondary income International trade and globalisation - Current account of the balance of payments - Calculation of deficits and surpluses on the current account of the balance of payments and its component sections International trade and globalisation - Current account of the balance of payments - Reasons for current account deficits and surpluses International trade and globalisation - Current account of the balance of payments - Impact on GDP, employment, inflation and foreign exchange rate International trade and globalisation - Current account of the balance of payments - The range of policies available to achieve balance of payments stability and their effectiveness