Source: https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-2-demand-side-policies-monetary [Revision notes](https://senecalearning.com/en-gb/revision-notes.md) › [A Level](https://senecalearning.com/en-gb/revision-notes/a-level.md) › [Economics](https://senecalearning.com/en-gb/revision-notes/a-level/economics.md) › [Edexcel](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel.md) › Demand-Side Policies - Monetary # Demand-Side Policies - Monetary Economics: Edexcel A A Level, topic 4.1.2 ## Monetary Policy Committee and Interest Rates The Monetary Policy Committee (MPC) sets the 'base rate' of interest for the economy. This is used by banks and other such institutions as a guide. ### Impact of interest rate change ![Impact of interest rate change](https://image-v2.cdn.app.senecalearning.com/2018-09/5a3e22ce-52e1-4589-bfc1-17d04cf33c95/percent-1019730_1920.jpg) - The main way the central bank tries to achieve its inflation target (price stability target) is through interest rates and quantitative easing, which is when the central bank introduces new money into the money supply. ### Effect of lowering the Bank Rate ![Effect of lowering the Bank Rate](https://image-v2.cdn.app.senecalearning.com/2018-08/bd1fa4a1-c3d9-4241-9419-0a61177327e1/2.3.3%20demand%20pull%20inflation%20ad%20shift%20right%20small%201.png) - If the Bank Rate was lowered (the Bank Rate is the Central Bank interest rate, also sometimes known as the Base Rate), it should lead to a lower LIBOR (London Inter-bank Offered Rate). This is the rate at which commercial banks lend/borrow from each other. - They then pass this on (in theory!) to consumers/firms via a decrease in mortgage rates/loans. This then has effects on the various components of AD/AS. ## Interest Rates and the Impact of Interest Rate Change The Monetary Policy Committee (MPC) sets the 'bank rate' of interest for the economy. This interest rate is used by banks as a guide for their interest rates when lending to individuals and businesses. If the bank rate falls it has many effects: ### Housing market and consumption ![Housing market and consumption](https://image-v2.cdn.app.senecalearning.com/2018-06/19eb4a6b-a445-4e05-9fa1-4dd4062e53a9/House-5.jpg) - Mortgages become cheaper because the interest rate charged by banks falls. This allows first-time house buyers to take out more mortgages. The housing market booms. - As the housing market booms, existing homeowners experience a positive wealth effect because houses go up in value. They may take out larger mortgages giving them more to spend now (equity withdrawal effect). - Existing mortgage holders have lower monthly repayments so they may spend more elsewhere in economy. ### Consumption ![Consumption](https://image-v2.cdn.app.senecalearning.com/2018-08/e27b68ac-31d7-4a88-8947-e008713298e5/coins-1726618_1920.jpg) - Loans are cheaper. So people borrow more to finance consumption, especially consumer durables. AD rises, with ensuing positive multiplier effects. - The return on savings falls when the interest rate falls, and the opportunity cost of consuming falls, so can spend more. ### Government spending ![Government spending](https://image-v2.cdn.app.senecalearning.com/2018-03/c81297c7-4cb2-4af1-949f-b9dbd449becf/shutterstock_89100241.jpg) - Lower corporate borrowing rates means that the government can borrow money at an even lower interest rate. - The government can borrow more cheaply, so running a fiscal deficit (spending > tax revenue) is less negative (or important) than when interest rates are high. - But in a booming economy, tax revenues may rise, making a fiscal budget deficit less likely. ### Trade and exchange rates ![Trade and exchange rates](https://image-v2.cdn.app.senecalearning.com/2018-04/6a539547-4e6a-40a4-b613-d341771bb10d/shutterstock_795098260.jpg) - Lower interest rates means hot money (speculative money flows that chases the highest rate of return) flow out, which means there is an increase supply of sterling, and a fall in demand for sterling, causing the currency to depreciate. - This means imports become more expensive in domestic currency terms, exports become cheaper in foreign currency terms; ceteris paribus demand for M falls and X rises , so value of X rises and M falls and the trade deficit falls, so AD rises. ### Business investment ![Business investment](https://image-v2.cdn.app.senecalearning.com/2018-08/8437b975-5242-4732-bf22-390df6cc3bf2/investment-banking.jpg) - Loans are cheaper now, so easier to meet hurdle rate of return projects. This means more projects are undertaken, e.g. construction, so real GDP rises. - Previously unprofitable projects now become profitable. ## Test yourself on Demand-Side Policies - Monetary - What is the main tool used by the MPC to control the rate of inflation? - What policy is most likely to result in the change shown (AD to AD1)? - What policy is most likely to shift AD leftwards? - Which of the following are potential effects of lowering the base interest rate? - Which of the following is an effect of increased interest rates? [Practise this topic for free](https://app.senecalearning.com/classroom/course/d903555c-0201-4e4b-b4f4-8a5ad1345c9e/section/d505d949-ecc4-4bbe-a5e8-8d89c0575fc1/session) - Previous topic: [4.1.1 Possible Objectives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-1-possible-objectives.md) - Next topic: [4.1.3 Demand-Side Policies - Monetary 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-3-demand-side-policies-monetary-2.md) ## Economics: Edexcel A A Level contents ### 1 Introduction to Markets - 1.1 Nature of Economics - [1.1.1 Economics as a Social Science](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-1-economics-as-a-social-science.md) - [1.1.2 Positive & Normative Economic Statements](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-2-positive-and-normative-economic-statements.md) - [1.1.3 The Economic Problem](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-3-the-economic-problem.md) - [1.1.4 Resources](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-4-resources.md) - [1.1.5 Production Possibility Frontiers](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-5-production-possibility-frontiers.md) - [1.1.6 Specialisation & Division of Labour](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-6-specialisation-and-division-of-labour.md) - [1.1.7 Types of Economies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-7-types-of-economies.md) - [1.1.8 End of Topic Test - Nature of Economics](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-8-end-of-topic-test-nature-of-economics.md) - [1.1.9 Application Questions - Nature of Economics](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-1-9-application-questions-nature-of-economics.md) - 1.2 How Markets Work - [1.2.1 Rational Decision Making](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-1-rational-decision-making.md) - [1.2.2 Demand](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-2-demand.md) - [1.2.3 Elasticities of Demand](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-3-elasticities-of-demand.md) - [1.2.4 Elasticities of Demand 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-4-elasticities-of-demand-2.md) - [1.2.5 Elasticity & Revenue](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-5-elasticity-and-revenue.md) - [1.2.6 Supply](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-6-supply.md) - [1.2.7 Elasticity of Supply](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-7-elasticity-of-supply.md) - [1.2.8 Price Determination](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-8-price-determination.md) - [1.2.9 Price Mechanism](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-9-price-mechanism.md) - [1.2.10 Consumer & Producer Surplus](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-10-consumer-and-producer-surplus.md) - [1.2.11 Indirect Taxes & Subsidies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-11-indirect-taxes-and-subsidies.md) - [1.2.12 A-A* (AO3/4) - Taxing Prices or Quantities?](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-12-a-a-ao34-taxing-prices-or-quantities.md) - [1.2.13 Alternative View of Consumer Behaviour](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-13-alternative-view-of-consumer-behaviour.md) - [1.2.14 End of Topic Test - Markets](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-14-end-of-topic-test-markets.md) - [1.2.15 A-A* (AO3/4) - Markets](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/1-2-15-a-a-ao34-markets.md) ### 2 Market Failure - 2.1 Market Failure - [2.1.1 Types of Market Failure](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-1-types-of-market-failure.md) - [2.1.2 Externalities](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-2-externalities.md) - [2.1.3 The Deadweight Welfare Loss of Externalities](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-3-the-deadweight-welfare-loss-of-externalities.md) - [2.1.4 A-A* (AO3/4) - The Externalities of Education](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-4-a-a-ao34-the-externalities-of-education.md) - [2.1.5 Public Goods](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-5-public-goods.md) - [2.1.6 Information Gaps](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-6-information-gaps.md) - [2.1.7 End of Topic Test - Market Failure](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-7-end-of-topic-test-market-failure.md) - [2.1.8 Application Questions - Market Failure](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-1-8-application-questions-market-failure.md) - 2.2 Government Intervention - [2.2.1 Government Intervention in Markets](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-1-government-intervention-in-markets.md) - [2.2.2 Subsidies & Price Controls](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-2-subsidies-and-price-controls.md) - [2.2.3 Pollution Permits & Regulation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-3-pollution-permits-and-regulation.md) - [2.2.4 A-A* (AO3/4) - European Emissions Trading](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-4-a-a-ao34-european-emissions-trading.md) - [2.2.5 State Provision & Information Provision](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-5-state-provision-and-information-provision.md) - [2.2.6 Government Failure](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-6-government-failure.md) - [2.2.7 End of Topic Test - Government Intervention](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-7-end-of-topic-test-government-intervention.md) - [2.2.8 A-A* (AO3/4) - Government Intervention](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/2-2-8-a-a-ao34-government-intervention.md) ### 3 The UK Macroeconomy - 3.1 Measures of Economic Performance - [3.1.1 Measuring Economic Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-1-measuring-economic-growth.md) - [3.1.2 National Income Data](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-2-national-income-data.md) - [3.1.3 Inflation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-3-inflation.md) - [3.1.4 Causes of Inflation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-4-causes-of-inflation.md) - [3.1.5 Consequences of Inflation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-5-consequences-of-inflation.md) - [3.1.6 Employment & Unemployment](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-6-employment-and-unemployment.md) - [3.1.7 Causes & Impact of Unemployment](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-7-causes-and-impact-of-unemployment.md) - [3.1.8 A-A* (AO3/4) - Hysteresis](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-8-a-a-ao34-hysteresis.md) - [3.1.9 Balance of Payments](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-9-balance-of-payments.md) - [3.1.10 Current Account Deficit & Imbalances](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-10-current-account-deficit-and-imbalances.md) - [3.1.11 End of Topic Test - Economic Performance](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-11-end-of-topic-test-economic-performance.md) - [3.1.12 Application Questions Macroeconomy](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-1-12-application-questions-macroeconomy.md) - 3.2 Aggregate Demand - [3.2.1 Aggregate Demand](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-2-1-aggregate-demand.md) - [3.2.2 Consumption](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-2-2-consumption.md) - [3.2.3 Investment](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-2-3-investment.md) - [3.2.4 Government Expenditure](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-2-4-government-expenditure.md) - [3.2.5 Net Trade](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-2-5-net-trade.md) - [3.2.6 End of Topic Test - Aggregated Demand](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-2-6-end-of-topic-test-aggregated-demand.md) - [3.2.7 Application Questions - AD](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-2-7-application-questions-ad.md) - 3.3 Aggregate Supply - [3.3.1 Aggregate Supply](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-3-1-aggregate-supply.md) - [3.3.2 End of Topic Test - Aggregated Supply](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-3-2-end-of-topic-test-aggregated-supply.md) - [3.3.3 A-A* (AO3/4) -Aggregate Supply](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-3-3-a-a-ao34-aggregate-supply.md) - 3.4 National Income - [3.4.1 National Income](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-4-1-national-income.md) - [3.4.2 Injections & Withdrawals](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-4-2-injections-and-withdrawals.md) - [3.4.3 Equilibrium Level of Real National Output](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-4-3-equilibrium-level-of-real-national-output.md) - [3.4.4 Multiplier Effect](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-4-4-multiplier-effect.md) - [3.4.5 End of Topic Test - National Income](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-4-5-end-of-topic-test-national-income.md) - [3.4.6 Application Questions - National Income](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-4-6-application-questions-national-income.md) - 3.5 Economic Growth - [3.5.1 Causes of Economic Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-5-1-causes-of-economic-growth.md) - [3.5.2 Output Gaps](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-5-2-output-gaps.md) - [3.5.3 Business Cycle](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-5-3-business-cycle.md) - [3.5.4 Impact of Economic Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-5-4-impact-of-economic-growth.md) - [3.5.5 End of Topic Test - Economic Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-5-5-end-of-topic-test-economic-growth.md) - [3.5.6 A-A* (AO3/4) - Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/3-5-6-a-a-ao34-growth.md) ### 4 The UK Economy - Policies - 4.1 Macroeconomic Objectives & Policies - [4.1.1 Possible Objectives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-1-possible-objectives.md) - [4.1.2 Demand-Side Policies - Monetary](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-2-demand-side-policies-monetary.md) - [4.1.3 Demand-Side Policies - Monetary 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-3-demand-side-policies-monetary-2.md) - [4.1.4 A-A* (AO3/4) - The Future of Interest Rates](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-4-a-a-ao34-the-future-of-interest-rates.md) - [4.1.5 Demand-Side Policies - Fiscal](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-5-demand-side-policies-fiscal.md) - [4.1.6 Demand-Side Policies in 2007-08](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-6-demand-side-policies-in-2007-08.md) - [4.1.7 Strengths & Weaknesses of Demand Side](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-7-strengths-and-weaknesses-of-demand-side.md) - [4.1.8 Supply-Side Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-8-supply-side-policies.md) - [4.1.9 Supply-Side Policies 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-9-supply-side-policies-2.md) - [4.1.10 Conflicts Between Objectives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-10-conflicts-between-objectives.md) - [4.1.11 A-A* (AO3/4) - Conflicting Incentives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-11-a-a-ao34-conflicting-incentives.md) - [4.1.12 Phillips Curve](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-12-phillips-curve.md) - [4.1.13 End of Topic Topic - Policies & Objectives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-13-end-of-topic-topic-policies-and-objectives.md) - [4.1.14 Application Questions - UK Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/4-1-14-application-questions-uk-policies.md) ### 5 Business Behaviour - 5.1 Business Growth - [5.1.1 Size & Types of Firms](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-1-1-size-and-types-of-firms.md) - [5.1.2 Business Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-1-2-business-growth.md) - [5.1.3 Pros & Cons of External Expansion](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-1-3-pros-and-cons-of-external-expansion.md) - [5.1.4 Demergers](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-1-4-demergers.md) - [5.1.5 End of Topic Test - Business Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-1-5-end-of-topic-test-business-growth.md) - [5.1.6 A-A* (AO3/4) - Business Growth](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-1-6-a-a-ao34-business-growth.md) - 5.2 Business Objectives - [5.2.1 Business Objectives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-2-1-business-objectives.md) - [5.2.2 End of Topic Test - Business Objectives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-2-2-end-of-topic-test-business-objectives.md) - [5.2.3 Application Questions - Business Objectives](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-2-3-application-questions-business-objectives.md) - 5.3 Revenues, Costs & Profits - [5.3.1 Revenue](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-3-1-revenue.md) - [5.3.2 Costs](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-3-2-costs.md) - [5.3.3 Economies & Diseconomies of Scale](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-3-3-economies-and-diseconomies-of-scale.md) - [5.3.4 Profits](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-3-4-profits.md) - [5.3.5 Profits 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-3-5-profits-2.md) - [5.3.6 End of Topic Test - Revenue, Costs & Profits](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-3-6-end-of-topic-test-revenue-costs-and-profits.md) - [5.3.7 A-A* (AO3/4) - Revenue, Costs & Profit](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/5-3-7-a-a-ao34-revenue-costs-and-profit.md) ### 6 Market Structures - 6.1 Market Structures - [6.1.1 Efficiency](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-1-efficiency.md) - [6.1.2 Perfect Competition](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-2-perfect-competition.md) - [6.1.3 Perfect Competition 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-3-perfect-competition-2.md) - [6.1.4 Monopolistic Competition](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-4-monopolistic-competition.md) - [6.1.5 Oligopolies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-5-oligopolies.md) - [6.1.6 The Prisoner's Dilemma](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-6-the-prisoners-dilemma.md) - [6.1.7 Collusion in Oligopolistic Markets](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-7-collusion-in-oligopolistic-markets.md) - [6.1.8 A-A* (AO3/4) - Which Factors Affect Collusion?](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-8-a-a-ao34-which-factors-affect-collusion.md) - [6.1.9 Monopolies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-9-monopolies.md) - [6.1.10 Price Discrimination](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-10-price-discrimination.md) - [6.1.11 Monopsony](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-11-monopsony.md) - [6.1.12 A-A* (AO3/4) - Models in Economics](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-12-a-a-ao34-models-in-economics.md) - [6.1.13 Contestability](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-13-contestability.md) - [6.1.14 Benefits of Contestability](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-14-benefits-of-contestability.md) - [6.1.15 End of Topic Test - Market Structures](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-15-end-of-topic-test-market-structures.md) - [6.1.16 Application Questions - Market Structures](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-16-application-questions-market-structures.md) - [6.1.17 A-A* (AO3/4) - Cereal Collusion](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-1-17-a-a-ao34-cereal-collusion.md) - 6.2 Labour Market - [6.2.1 Demand for Labour](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-1-demand-for-labour.md) - [6.2.2 Supply of Labour](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-2-supply-of-labour.md) - [6.2.3 Labour Market Imperfections](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-3-labour-market-imperfections.md) - [6.2.4 A-A* (AO3/4) - Labour Productivity & Unemployment](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-4-a-a-ao34-labour-productivity-and-unemployment.md) - [6.2.5 A-A* (AO3/4) - What Level of Unionisation is Good?](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-5-a-a-ao34-what-level-of-unionisation-is-good.md) - [6.2.6 Wage Determination](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-6-wage-determination.md) - [6.2.7 Elasticity of Labour Supply & Demand](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-7-elasticity-of-labour-supply-and-demand.md) - [6.2.8 Intervention in Setting Wages](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-8-intervention-in-setting-wages.md) - [6.2.9 End of Topic Test - Labour Market](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-9-end-of-topic-test-labour-market.md) - [6.2.10 A-A* (AO3/4) - Labour Markets](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-2-10-a-a-ao34-labour-markets.md) - 6.3 Government Intervention - [6.3.1 Reasons for Government Intervention](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-1-reasons-for-government-intervention.md) - [6.3.2 Government Promotion of Competition](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-2-government-promotion-of-competition.md) - [6.3.3 Usefulness of Competition Policy & Examples](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-3-usefulness-of-competition-policy-and-examples.md) - [6.3.4 A-A* (AO3/4) - Modern Competition Policy](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-4-a-a-ao34-modern-competition-policy.md) - [6.3.5 Privatisation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-5-privatisation.md) - [6.3.6 Government Regulation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-6-government-regulation.md) - [6.3.7 A-A* (AO3/4) - Nationalisation vs Privatisation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-7-a-a-ao34-nationalisation-vs-privatisation.md) - [6.3.8 Government Protection of Suppliers and Employees](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-8-government-protection-of-suppliers-and-employees.md) - [6.3.9 Impact of Government Intervention](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-9-impact-of-government-intervention.md) - [6.3.10 End of Topic Test - Government Intervention](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-10-end-of-topic-test-government-intervention.md) - [6.3.11 Application Questions - Government Intervention](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/6-3-11-application-questions-government-intervention.md) ### 7 A Global Perspective - 7.1 International Economics - Globalisation & Trade - [7.1.1 Globalisation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-1-globalisation.md) - [7.1.2 Globalisation for LEDCs](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-2-globalisation-for-ledcs.md) - [7.1.3 Globalisation for MEDCs](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-3-globalisation-for-medcs.md) - [7.1.4 Specialisation & Trade](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-4-specialisation-and-trade.md) - [7.1.5 Pattern of Trade](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-5-pattern-of-trade.md) - [7.1.6 Terms of Trade](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-6-terms-of-trade.md) - [7.1.7 Trading Blocs](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-7-trading-blocs.md) - [7.1.8 UK, EU & WTO](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-8-uk-eu-and-wto.md) - [7.1.9 End of Topic Test - Globalisation & Trade](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-9-end-of-topic-test-globalisation-and-trade.md) - [7.1.10 A-A* (AO3/4) - Globalisation & Trade](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-1-10-a-a-ao34-globalisation-and-trade.md) - 7.2 International Economics - Currency - [7.2.1 Merged Currency](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-1-merged-currency.md) - [7.2.2 Restrictions on Free Trade](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-2-restrictions-on-free-trade.md) - [7.2.3 Arguments for Protectionism](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-3-arguments-for-protectionism.md) - [7.2.4 Arguments Against Protectionism](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-4-arguments-against-protectionism.md) - [7.2.5 Balance of Payments](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-5-balance-of-payments.md) - [7.2.6 Balance of Payments 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-6-balance-of-payments-2.md) - [7.2.7 Floating Exchange Rates](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-7-floating-exchange-rates.md) - [7.2.8 Fixed Exchange Rate](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-8-fixed-exchange-rate.md) - [7.2.9 International Competitiveness](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-9-international-competitiveness.md) - [7.2.10 End of Topic Test - International Economy](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-10-end-of-topic-test-international-economy.md) - [7.2.11 Application Questions - International Economics](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/7-2-11-application-questions-international-economics.md) ### 8 Finance & Inequality - 8.1 Poverty & Inequality - [8.1.1 Absolute & Relative Poverty](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-1-1-absolute-and-relative-poverty.md) - [8.1.2 Inequality](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-1-2-inequality.md) - [8.1.3 Inequality 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-1-3-inequality-2.md) - [8.1.4 Lorenz Curve](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-1-4-lorenz-curve.md) - [8.1.5 Government Policy on Poverty](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-1-5-government-policy-on-poverty.md) - [8.1.6 End of Topic Test - Poverty & Inequality](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-1-6-end-of-topic-test-poverty-and-inequality.md) - [8.1.7 A-A* (AO3/4) - Inequality & Poverty](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-1-7-a-a-ao34-inequality-and-poverty.md) - 8.2 Emerging & Developing Economies - [8.2.1 Measures of Development](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-1-measures-of-development.md) - [8.2.2 Factors Influencing Growth & Development](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-2-factors-influencing-growth-and-development.md) - [8.2.3 Barriers to Development](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-3-barriers-to-development.md) - [8.2.4 Barriers to Development 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-4-barriers-to-development-2.md) - [8.2.5 A-A* (AO3/4) - The Bottom Billion](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-5-a-a-ao34-the-bottom-billion.md) - [8.2.6 Development Strategies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-6-development-strategies.md) - [8.2.7 Interventionist Strategies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-7-interventionist-strategies.md) - [8.2.8 Aid](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-8-aid.md) - [8.2.9 International Institutions](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-9-international-institutions.md) - [8.2.10 International Institutions 2](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-10-international-institutions-2.md) - [8.2.11 End of Topic Test - Emerging & Developing](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-11-end-of-topic-test-emerging-and-developing.md) - [8.2.12 Application Questions - Developing Countries](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-2-12-application-questions-developing-countries.md) - 8.3 The Financial Sector - [8.3.1 Role of Financial Markets](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-3-1-role-of-financial-markets.md) - [8.3.2 Market Failure in the Financial Sector](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-3-2-market-failure-in-the-financial-sector.md) - [8.3.3 Role of Central Banks](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-3-3-role-of-central-banks.md) - [8.3.4 End of Topic Test - The Financial Sector](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-3-4-end-of-topic-test-the-financial-sector.md) - [8.3.5 A-A* (AO3/4) - Financial Sector](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-3-5-a-a-ao34-financial-sector.md) - 8.4 Role of the State in the Macroeconomy - [8.4.1 Public Expenditure](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-4-1-public-expenditure.md) - [8.4.2 Taxation](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-4-2-taxation.md) - [8.4.3 Public Sector Finances](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-4-3-public-sector-finances.md) - [8.4.4 End of Topic Test - Role of the State](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-4-4-end-of-topic-test-role-of-the-state.md) - [8.4.5 Application Questions - Role of the State](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/8-4-5-application-questions-role-of-the-state.md) ### 9 Examples of Global Policy - 9.1 International Policies - [9.1.1 Global Debt & Deficit Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-1-1-global-debt-and-deficit-policies.md) - [9.1.2 Poverty & Inequality Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-1-2-poverty-and-inequality-policies.md) - [9.1.3 Changes in Interest Rates](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-1-3-changes-in-interest-rates.md) - [9.1.4 Competitiveness Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-1-4-competitiveness-policies.md) - [9.1.5 End of Topic Test - International Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-1-5-end-of-topic-test-international-policies.md) - [9.1.6 A-A* (AO3/4) - International Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-1-6-a-a-ao34-international-policies.md) - 9.2 Policy Responses to Shocks - [9.2.1 International Tax Policies](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-2-1-international-tax-policies.md) - [9.2.2 Problems for Policymakers](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-2-2-problems-for-policymakers.md) - [9.2.3 End of Topic Test - Policy Responses](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-2-3-end-of-topic-test-policy-responses.md) - [9.2.4 Application Questions - Policy Responses](https://senecalearning.com/en-gb/revision-notes/a-level/economics/edexcel/9-2-4-application-questions-policy-responses.md)