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A-Level Standard of Living and Macroeconomic Indicators

What the A-Level syllabus expects for Standard of Living and Macroeconomic Indicators, and how to practise it.

What the syllabus expects

• Improving the standard of living is an economy's foremost concern; it covers both material and non-material aspects and is measured by real national income per capita alongside further indicators such as income distribution, leisure time and the quality of the environment.
• How well an economy meets its macroeconomic goals - a favourable balance of trade, stable prices, low unemployment, and growth that is at once inclusive and sustainable - shapes the standard of living its people enjoy.
• Macroeconomic indicators: an economy's performance surfaces through its balance of trade, the Consumer Price Index (CPI), the unemployment rate, real per-capita GDP or GNI, and real output measured as Gross Domestic Product (GDP) or, alternatively, Gross National Income (GNI). Income distribution is mirrored by the Gini coefficient, whereas the standard of living is mirrored by the Human Development Index (HDI).
• Comparing living standards both over time and across different economies.
  Scope: Students should be aware of the principal parts of the balance of payments - its financial, capital and current accounts - though the accounting behind those accounts, sign conventions included, is not required. Nominal and real concepts should be understood, along with how index numbers are read (their weights and their base year); computing index numbers or national income is not required. The meaning of the Gini coefficient (read off the Lorenz curve) and its span from 0 to 1 should be grasped, but working out the current account, the HDI or the Gini coefficient is not required.

How it's examined

About 5% of the past-paper style questions in Rae's bank for this subject sit in this topic.

More A-Level H2 Economics topics

Scarcity, Choice and How Resources Get Allocated · How Economic Agents Reach Decisions · The Price Mechanism and What It Does · Applying Demand and Supply Analysis · Government Intervention in Markets · What Firms Aim For · all of A-Level H2 Economics