Macroeconomics

Table of Contents

1. Topic pack - Macroeconomics - introduction
2. 2.1 The level of overall economic activity (notes)
3. 2.1 The level of overall economic activity (questions)
4. Section 2.2 Aggregate demand and supply (notes)
5. Section 2.2 Aggregate demand and supply (simulations and activities)
6. 2.2 Aggregate Demand and Aggregate Supply (questions)
7. 2.3 Macroeconomic objectives (notes)
8. Low Unemployment
   1. Low Unemployment
   2. What the data says
   3. The meaning of unemployment
   4. Case study - regional variation
   5. Consequences of unemployment
   6. Case study - tougher for men
   7. Types and causes of unemployment
   8. Disequilibrium unemployment
   9. Equilibrium unemployment
   10. Policies to reduce unemployment
   11. Low and stable inflation
   12. Low and stable inflation (notes)
   13. The meaning and measurement of inflation
   14. A consumer price index
   15. Finding out more about consumer price index weights
   16. Problems with measuring inflation
   17. Inflation - videos
   18. Consequences of inflation
   19. Hyperinflation
   20. The consequences of deflation
   21. Types and causes of inflation: demand-pull inflation
   22. Types and causes of inflation: cost-push inflation
   23. Case Study - car prices in Trinidad
   24. Possible relationships between unemployment and inflation
   25. PlotIT - Phillips curve
   26. Phillips curve - long-run
   27. Natural rate of unemployment
   28. NAIRU
   29. Economic growth
   30. Economic growth (notes)
   31. Causes of economic growth
   32. Economic growth and the PPF (1)
   33. Economic growth and the PPF (2)
   34. Economic growth and the business cycle
   35. Economic growth and the aggregate supply curve
   36. Consequences of economic growth
   37. Equity in the distribution of income
   38. Equity in the distribution of income (notes)
   39. Indicators of income equity
   40. Poverty
   41. The poverty line: An Indicator of Relative poverty
   42. The causes of poverty
   43. The role of taxation in promoting equity
   44. The role of taxation in promoting equity (notes)
   45. Other methods of promoting equity
9. 2.3 Macroeconomic objectives (questions)
10. 2.4 Fiscal policy (notes)
11. 2.4 Fiscal policy (questions)
12. 2.5 Monetary policy (notes)
13. 2.5 Monetary Policy (questions)
14. Section 2.6 Supply-side policies (notes)
15. 2.6 Supply-side policies (questions)
16. Print View

Syllabus: Indicators of income equity

Syllabus: Analyse data on relative income shares of given percentages of the population, including deciles and quintiles.

If you would prefer to view this interaction in a new web window, then please follow the link below:

• Lorenz Curve

In statistics Deciles are when the distribution is divided into groups of 10 (if the distribution is out of 100) or are tenths. In the digram above the cumulative percentage of earners is on the Y axis and each `notch´ shows a decile. Check your understanding by using the graph to find out what the 4th decile of the population receive as their share of income.

Ans: Approximately 10% to 18% therefore they receive approximately 8%. You may find it better to draw this accurately on graph paper.
What is the share of income of the 7th Decile?

Quintiles are when the data is in fifths - you can see this in the interactive diagram by referring to the numbers (0 to 20 is the first quintile). So use the diagram again, this time to discover what share of income the third quintile has.

This should be quite straightforward for you all - let your teacher know if it is not.

Syllabus: Draw a Lorenz curve and explain its significance.

First a note on the command term Draw The syllabus explanation of `draw´ is: Represent by means of a labelled, accurate diagram or graph, using a pencil. A ruler (straight edge) should be used for straight lines. Diagrams should be drawn to scale. Graphs should have (if appropriate) and joined in a straight line or smooth curve.

The command words Analyse and Draw suggests they are likely to test knowledge and understanding of the Lorenz Curve and Gini Coefficient on Paper 3. In a full paper 3 question I can see a possiblity of you having to plot and draw a Lorenz curve from given data, interpret the diagram, calculate the Gini Coefficient and explain its significance, especially comparing it with other given gini coefficients.

Syllabus: Explain how the Gini coefficient is derived and interpreted.

However, it is not beyond the realms of possibilities that it could be an essay in Paper 1 and for that you would need to be able to sketch out an illustration of a Lorenz Curve so you are able to use it to explain what is meant by the Gini Coefficient.

Possible Essay question:

a) Using an appropriate diagram explain what is meant by a Gini Coefficient. (10 marks)

Essay questions part (b) are based around higher order command words like evaluate and discuss and your syllabus says:

Syllabus: Evaluate government policies to promote equity (taxation, government expenditure and transfer payments) in terms of their potential positive or negative effects on efficiency in the allocation of resources.

Each of these policies are covered in detail in the pages ahead.

So an obvious part (b) addition to the part (a) above would be

b) Evaluate government policies to make the distribution of income more equitable (15 marks)

Try writing this out and giving to your teacher for marking.