1. Introduction: define the key terms and state your line briefly.
The 20-mark essay structure
Spec: Plan
- Introduction: define the key terms and state your line briefly.
- Analysis: one or two developed chains, each with an accurate AD/AS diagram.
- Evaluation: weigh the analysis using MICE.
- Conclusion: a clear, justified judgement — "it depends on…".
Diagrams checklist
Spec: Must-know
Be ready to draw, label and shift:
- The AD curve and shifts; - SRAS, and LRAS (Keynesian and Classical); - AD/AS equilibrium, plus demand-pull and cost-push inflation; - The circular flow with injections and withdrawals; - The economic cycle / output gaps; - The short-run Phillips curve.
The formula sheet
Spec: Formulae
Economic growth = % change in real GDP — real GDP strips out the effect of inflation
Inflation rate = % change in the CPI — CPI = a weighted index of a representative basket of goods & services
Real GDP per capita = real GDP ÷ population — the better measure of living standards
Multiplier k = 1 / (1 − MPC) = 1 / MPW — MPW = MPS + MPT + MPM
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