Economics Unit 2

A level edexcel economics unit 2 notes 

Forgot to put the graphs in. I think they were meant to be like so:

Diagram in the national income section of 2.3.2 - circular flow of income diagram 

Diagrams in 2.3.3,4,5:

First one: AD/AS graph, showing AD and AS on a graph with an equilibrium.

Second one: AD/AS graph showing AD shifting to the right and the price level and GDP shifting outwwards (also above it it should say 'the same happens if M gets lower') 

Third one: There should be a simple AS curve drawn. Section A is the section where the AS curve is still horizontal. Section B is the section where the AS curve is curving upwards. Section C is where the AS curve has become vertical (not really a section per se, but whatever).

Fourth one: AD/AS graph showing AS shifting to the right and the effects this has on price and GDP. NB the horizontal part will stay the same so the shift should only show an extension of the vertical line and then the rest of the line (what I mean is the vertical section on the graph doesn't move up or down). 

Diagrams in 2.3.6:

First two: not sure why there are two graphs, but I think the graphs were just showing the business cycle. 

Third one: showing output gap (between a and b on this graph http://3.bp.blogspot.com/_c-n0myYucLQ/Sr6a__Mz8QI/AAAAAAAAAWc/C1-P0lz8_8Q/s400/output+gap.jpg)

Fourth one: showing the AD curve shifting. The first AD curve is crossing the AS curve at full capacity (the vertical bit), and so when it shifts out the graph shows that Price Levels rise but GDP does not increase.

Fifth one: Above this graph I think it should say when the AD curve is crossing the horizontal part of the AS curve, then you show the AS curve shifting outwards but no change to price level or GDP. (it does work if you draw it, so I'm pretty sure that's what I meant)

Sixth and seventh ones: graph showing AS shifting to the right, then a graph showing the PPF shifting outwards (see unit one for more details on the PPF!)

2.3.7:

First graph: phillips curve: http://www.eridlc.com/onlinetextbook/chpt03/text_main_files/OT03-pg21.gif

2.3.8:

1. Graph showing AD shifting outwards and its effect on equilibrium, I believe. 

2. Graph showing AS shifting outwards and the effect on equilibrium.

Hope those descriptions are easy enough to understand...sorry the notes were incomplete!