AQA Economics. Unit 1 (First year) Complete Revision

I made this for my AQA Economics exam last year (course from 2009) Hope it helps you out! :)

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  • Created on: 13-05-11 04:58
Preview of AQA Economics. Unit 1 (First year) Complete Revision

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Basic economic problem: Resources are limited but needs and wants are infinite
Opportunity cost: Something given up when we make a choice
Demand: The quantity of a good or service that consumers are willing and able to purchase at a
particular price
Supply: The quantity of a good or service that businesses will offer for sale at a particular price
Bank/building society account: an account for which the main objective is to gain interest and keep
money safe.
ISA: individual savings account
Interest Rates: an annual rate which is charged to borrows' or paid savers
Account Reward Risk Short, medium or Ease of
long-term withdrawing
Savings account Low - Medium Low Short ­ Long Easy ­ unless notice
of withdrawal is
ISA accounts Low - Medium Low Medium ­ Long Easy
National savings Low Very Low Medium ­ Long Often requires
and investments written notice of
account withdrawal
Unit Trusts Medium - High High Long Obtaining your
money may take
some time
Annual equivalent rate (AER): a figure quoted in savings advertisements to help people compare on
savings products with another
Risks: the chance that something may not succeed and its consequence
Reward: the return received for taking risks
Shares: certificate representing a unit of ownership in a company
Unit trust: a pooled investment fund usually shares-based investments

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Mortgage ­ a loan to finance the purchase of real estate (e.g. a house). A Mortgage is secured on the
house, which remains to be the property of the bank until the loan is paid off.
Credit card ­ cards that may be used repeatedly to buy products and services on credit or to borrow
money up to a pre arranged amount limit. Each month, you must pay back the minimum repayment
required (usually around 3-5%) of the outstanding balance.…read more

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Why people work Why people may not work
Pay Remaining in education
Job satisfaction (Social aspect an achievement) Child care and Retirement
Temporary Employment: work that will only last for a specific period of time (usually a number of
weeks or months)
Seasonal Employment: work that is only required during a particular period of the year
Specialisation: where each worker concentrates on only one small aspect of the entire production
(The division of labour)
Workers can become more skilled if they focus on…read more

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Reward for Work
How people are paid:
Salaries - stated as annual earnings but are paid monthly. Mainly applies to full time workers, but can
apply to part time workers. Jobs paying salaries are more likely to be skilled ­ non manual
occupations. Pay stated as a yearly total
Wage ­ wages are calculated as an hourly rate multiplied b the number of hours worked. Wages are
normally paid weekly. More likely to apply to lower skilled jobs, and for part time or temporary
work.…read more

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Income Tax: tax on money paid to the worker, although not all income is taxed, the income tax will
be paid as a percentage of earnings. People only pay income tax on earnings above a tax free
allowance, and the percentage of tax paid depends on the amount of income ­ indicated by a tax
code. A tax calculated as a percentage of the workers income.…read more

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Government Influence - the government introduced a minimum wage in the 1990's, so now people
cannot be paid unfairly low wages. The minimum wag is the legal minimum hourly rate that can be
paid to workers, varying depending on the age of the worker.
Reasons why wages rates change
Surpluses of labour ­ where more people want to work in a particular occupation than the number of
jobs available. This is likely to lead to lower wages because the supply of available people has risen.…read more

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Education - the government is encouraging more students to undertake vocation qualifications in
schools and colleges. To ensure that children who find academic work difficult do not leave school
without decent qualifications.
Apprenticeships - apprentices work alongside experienced staff and gain job specific skills. The
apprentice will normally receive training with a local training provider such as a college possibly on a
day release scheme e.g. one day a week away from the workplace.…read more

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They can therefore produce products much more
cheaply than UK manufacturers.
Competition and innovation ­ all companies have to work harder to attract consumers as
there are many more potential competitors. They try o lower prices and develop more
attractive and better quality products.
Raw materials ­ the UK is relatively poor in raw materials, so it is essential that the UK
imports the raw materials. E.g. metals, gems, energy.…read more

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If the value of the pound rises, you will receive more foreign currency, which will allow you to
spend more when you go abroad. But when the pound falls, you will receive less foreign currency,
and have to exchange more at a higher rate.
The Power of the Consumer
Fair-trade aims to help poorer producers in developing countries gain economic self sufficiency by
encouraging the payment of fair prices for products such as coffee, cocoa and fresh fruit.…read more

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Benefits of globalisation for the UK labour market
Jobs are created in sectors where the UK does well
New migrant labour skills lower costs and increase competitiveness
Opportunities to increase exports to UK markets
Drawbacks of globalisation for the UK labour market
Low skill jobs are lost, particularly affecting manufacturing regions of the UK
Increase in immigrant labour depresses wages
Relocating production overseas can cause unemployment
Immigration effects the UK labour market positively by
bringing new knowledge and skills
reducing wage inflation and increasing…read more


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