What this topic covers
How the economy works has 5 subtopics:
- Introduction to the national economy
- Government objectives
- How the government manages the economy
- International trade and the global economy
- The role of money and financial markets
← Back to topics
GCSE AQA Economics · Topic 2 of 2
How the economy works – GCSE AQA Economics revision notes
Choose a subtopic. How the economy works covers Introduction to the national economy, Government objectives, How the government manages the economy, and International trade and the global economy in GCSE AQA Economics. 39 lessons in 5 subtopics.
Revise How the economy works for GCSE AQA Economics, including Introduction to the national economy and Government objectives. 39 lessons across 5 subtopics.
39
Lessons
5
Subtopics
How the economy works lessons by subtopic
39 lessons, grouped by subtopic.
Introduction to the national economy
- UK Government: Income and Expenditure: Explore the UK government's income and spending habits, focusing on revenue sources and expenditure areas.
- Direct vs. Indirect Taxation: Understand the differences between direct and indirect taxes, along with examples of each.
- Progressive and Regressive Taxes: Examine how taxes can be progressive or regressive, and the implications of each system.
- Understanding Interest Rates: Explore the definition of interest rates and the factors influencing them.
- Interest Rates and Consumer Decisions: Analyze how interest rates impact consumers' choices regarding saving, borrowing, and spending.
- Interest Rates and Producer Decisions: Examine the effects of interest rates on producers' decisions concerning saving, borrowing, and investment.
Government objectives
- Intro to Economic Objectives: Explore the main economic objectives of the government and some other key considerations.
- Conflicts Between Economic Objectives: Understand how pursuing one economic objective can negatively impact others, and the ethical considerations involved.
- Understanding Economic Growth: Explore the meaning, significance, and measurement of economic growth.
- Economic Growth: Causes, Consequences and Policy: Analyse the drivers and impacts of economic growth, and how governments try to influence it.
- Causes and Consequences of Unemployment: Examine the causes and consequences of unemployment for individuals and the economy.
- Understanding Inflation and Price Stability
- Understanding Balance of Payments: Learn the fundamentals of balance of trade and payments, current account surpluses/deficits, and their significance.
- Balance of Payments: Policies and Calculations: Explore government policies influencing the balance of payments and perform simple calculations using current account figures.
- Understanding Income and Wealth Inequality: An introduction to income and wealth inequality, its causes, and its consequences.
- Government Policies and Income Redistribution: Exploring government policies aimed at redistributing income and wealth through taxation and spending.
How the government manages the economy
- Intro to Fiscal Policy & Government Budget: Learn about fiscal policy, the government budget, and how they are related.
- Fiscal Policy's Effect on the Economy: Explore how fiscal policy affects income and expenditure levels, as well as its use in achieving government objectives.
- Balanced Budget, Surplus & Deficit: Understand the meaning of a balanced budget and the consequences of operating a budget surplus and deficit.
- What is Monetary Policy?: An introduction to monetary policy, its definition, and its role in managing the economy.
- Monetary Policy and Inflation: Explore how monetary policies are used to control inflation, a key government objective.
- Intro to Supply-Side Policies: An introduction to what supply-side policies are and how they work.
- Supply-Side Policies: Types & Examples: Exploring different types of supply-side policies with real-world examples. Examples include investment in education and training, lower direct taxes, lower taxes on business profits, trade union reform, privatisation and de-regulation.
- Advantages, Disadvantages & Government Objectives: Analyzing the advantages and disadvantages of supply-side policies and their role in achieving government economic objectives.
- Government Policies to Correct Externalities
International trade and the global economy
- Why Countries Trade
- UK Trade: Imports, Exports and Global Interdependence
- Understanding Exchange Rate Determination: Explore the factors that influence how exchange rates are determined in the global market. Covers supply and demand.
- Impact of Exchange Rate Fluctuations: Analyze how changes in exchange rates affect consumers and producers, both domestically and internationally, including import and export prices.
- Understanding Free Trade: An introduction to free trade, free trade agreements, and the arguments for and against them.
- Free Trade and the EU: Explore free trade agreements with a focus on the European Union, including the significance and benefits of such agreements.
- What is Globalisation?
- Globalisation: Benefits and Drawbacks for the UK
- Globalisation: Impact on Developing Countries
- Ethics, Sustainability and Global Trade
The role of money and financial markets
- Understanding the Financial Sector: An introduction to the financial sector, its key institutions, and their roles in the economy.
- The Role of the Bank of England: Exploring the functions of the Bank of England, particularly its influence on interest rates and ensuring financial stability.
- High Street Banks: Funding and Services: Examining the role of high street banks in funding investment and providing services to savers and borrowers.
- What is Money? Exploring its Definition and Functions: Explore the definition of money, its various functions, and its broader meaning beyond physical currency.
More in this course
Go back to the full GCSE AQA Economics topic list, or practise this topic with past-paper questions.
Frequently asked questions
What is How the economy works?
How the economy works covers Introduction to the national economy, Government objectives, How the government manages the economy, and International trade and the global economy in GCSE AQA Economics. 39 lessons in 5 subtopics.
What are the UK Income Tax bands?
UK Income Tax is paid by individuals on earnings over a personal allowance of £12,570, then rises from 20% (basic rate) to 40% (higher rate) and 45% (additional rate) as earnings increase. The Direct vs. Indirect Taxation notes cover this in full.
What is GDP?
Gross Domestic Product (GDP) is the total value of all goods and services produced within a country's borders over a given period, usually one year. The Understanding Economic Growth notes cover this in full.
What is Capital Gains Tax?
Capital Gains Tax is a direct tax paid on profit made from selling assets such as property or shares. The Direct vs. Indirect Taxation notes cover this in full.
What is inflation?
Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. The Understanding Inflation and Price Stability notes cover this in full.
What is globalisation?
Globalisation is the increasing interconnection of the world's economies through the growth of international trade, the operations of multinational companies, the movement of people, the flow of capital and the spread of technology. The What is Globalisation? notes cover this in full.
What is Fairtrade?
Fair Trade is a trading system that guarantees producers in developing countries a minimum price for their goods, plus a premium invested in community projects such as schools, clean water and healthcare. The Ethics, Sustainability and Global Trade notes cover this in full.
What is a mortgage?
A mortgage is a long-term loan secured against property, enabling households to buy homes. The High Street Banks: Funding and Services notes cover this in full.
What is Corporation Tax?
Corporation Tax is a direct tax paid by companies on their profits. The UK Government: Income and Expenditure notes cover this in full.