Macroeconomic Issues

H1 Economics - syllabus 8843, 2026

Original teaching notes

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Understand economic growth, unemployment, inflation and deflation, then use evidence to explain their consequences for people and firms.

• Distinguish actual and potential growth

  Producing more today does not always expand future productive capacity.

• Explain persistently low or negative growth

  Weak demand and weak productive capacity require different explanations.

• Assess whether growth can last

  Current output can rise while future productive resources deteriorate.

• Assess who shares economic growth

  Growth can create opportunities without giving every group the same gain.

• Diagnose demand-deficient unemployment

  Firms need fewer workers when demand for their output is weak.

• Diagnose structural unemployment

  Available jobs and unemployed workers may not be a workable match.

• Explain frictional unemployment

  Finding a suitable match takes time, even in an expanding economy.

• Assess the consequences of unemployment

  Lost earnings are one cost; prolonged unemployment can create further damage.

• Distinguish inflation, disinflation and deflation

  Slower price increases are different from falling prices.

• Explain demand-pull inflation

  Spending pressure raises prices when output cannot keep pace.

• Explain cost-push inflation

  Rising production costs can raise prices while weakening output.

• Assess who gains and loses from inflation

  The effects depend on income adjustment, contracts and expectations.

• Distinguish the causes and risks of deflation

  Falling prices can reflect weak demand or improved productive efficiency.

• Build a diagnosis from the evidence

  The same headline can arise from different economic mechanisms.