ECONOMICS IMPORTANT TOPICS

For paper 2 Important ques cor cies:

 Usefulness of elasticity of demand for businesses or governments
 How can price elasticity of demand be changed, why would firms like to change it, to
what extent they can change it
 Impacts of price, income and cross elasticity on total revenues
 Consequence of inflation for consumers and producers
 Causes of current account deficit
 Can a country simultaneously have trade deficit and surplus on current account
 Simultaneous shifts in AD and AS and Impacts on the economy
 Tools of 3 macro-economic policies, how can they help achieve low unemployment and
low inflation, evaluation of these policies
Past papers:
1) 9708/mj/22/22
2) 9708/fm/22/22
3) 9708/mj/21/20
4) 9708/on/21/22
Unemployment:
 Frictional unemployment is unemployment that arises when workers are between jobs
 Casual unemployment refers to workers who are out of work between periods of
employment including, for example, actors, supply teachers and construction workers
 seasonal unemployment, demand for workers fluctuates according to the time of the
year. During periods of the year, people working in, for example, the tourism, hospitality,
building and farming industries may be out of work
 structural unemployment arises due to changes in the structure of the economy. Over
time the pattern of demand and supply will change. Some industries will be expanding
and some will be contracting. If workers cannot move from one industry to another
industry, due to a lack of geographical or occupational immobility, they may become
structurally unemployed.
 technological unemployment. In this case, people are out of work due to the
introduction of labour-saving techniques.
 international unemployment. This is when workers lose their jobs because demand
switches from domestic industries to more competitive foreign industries
 cyclical unemployment or demand-deficient unemployment, arises due to a lack of
aggregate demand or fall in wage rates. Cyclical unemployment will affect the whole
economy, with job losses occurring across a range of industries