Theme 2 – The Wider Economic Environment

This theme is included in AS Paper 2 and A-Level Paper 2 and Paper 3 for Edexcel Economics (B). You can find notes for it below:

Business Growth and Competitive Advantage

a) Growth
b) Methods of growth
c) Research and development (R&D) and innovation
d) How the digital economy affects markets and firms
e) How small firms compete

Firms, Consumers and Elasticities of Demand

a) Price elasticity of demand (PED)
b) Competing on price
c) Types of non-price competition
d) Income elasticity of demand (YED)

Productive Efficiency

a) Productivity
b) Capacity utilisation
c) Efficiency and competitiveness using lean production
d) Impact on costs and sales revenue

Life in a Global Economy

a) Globalisation
b) Developed, emerging and developing economies
c) International trade
d) Exchange rates

The Economic Cycle

a) The economic cycle
b) Circular flow of income, expenditure and output
c) Inflation
d) Employment and unemployment

Introduction to Macroeconomic Policy

a) Possible macroeconomic objectives
b) Policy instruments
c) Potential policy conflicts and trade-offs