Ageing Population
Increases pressure on government spending (healthcare, pensions, long‑term care).
Reduces labour force participation, potentially slowing economic growth.
Creates opportunities in sectors like healthcare, technology, and services.
Budget Surplus / Budget Deficit
Surplus can reduce national debt and interest repayments.
Deficit can stimulate economic activity during downturns.
Both influence investor confidence and borrowing costs.
Cost–Benefit Analysis
Weighs social costs and benefits to guide decision‑making.
Ensures efficient allocation of resources for public projects.
Considers long‑term impacts, not just financial costs.
Demographic Change / Migration
Inward migration increases labour supply and supports economic growth.
Population growth increases demand for housing, services, and infrastructure.
Can create pressure on public services if unmanaged.
Economic Growth
Improves living standards as more goods and services are produced.
Increases government revenue without raising tax rates.
Attracts investment by signalling stability and opportunity.
Economic Indicators (GDP, CPI, Unemployment Rate)
Measure economic performance for policymakers.
Allow comparisons over time and between countries.
Guide business planning by signalling trends.
Elasticity (PED, PES, YED,)
Determines the impact of price changes on revenue or quantity.
Influences business decisions such as pricing and production.
Helps the government predict tax revenue from indirect taxes.
Exchange Rates
A depreciation makes exports cheaper and imports more expensive.
Affects inflation through changes in import prices.
Impacts competitiveness and trade balances.
Globalisation
Increases interconnectedness, boosting trade and investment.
Creates competitive pressure, improving efficiency.
Can widen inequality depending on policy responses.
Government Failure
Occurs when intervention worsens outcomes (e.g., poorly designed subsidies or caps).
Can distort incentives or create unintended shortages/surpluses.
Highlights the importance of accurate information and policy design.
Government Intervention
Corrects market failure where markets misallocate resources.
Protects consumers through regulation and standards.
Promotes equity by ensuring fair access to essential services.
Hidden Economy
Reduces tax revenue available for public services.
Creates unfair competition for compliant businesses.
Often linked to weak regulation or high tax burdens.
Housing Market
Supply constraints push up prices when demand rises.
Affects labour mobility and economic growth.
Impacts household wealth as property is a major asset.
Inflation
Reduces purchasing power as prices rise.
Creates uncertainty for households and firms.
Can improve government finances through taxes.
Can be cost-push or demand-pull.
International Trade
Allows specialisation, increasing efficiency and output.
Provides access to a wider variety of goods.
Boosts competition, lowering prices and improving quality.
Labour Market
Wages are determined by supply and demand unless regulated.
Education and skills increase productivity and wages.
Labour mobility affects efficiency and economic performance.
Market Failure
Occurs when markets misallocate resources (externalities, information gaps, monopoly power).
Justifies government intervention.
Leads to inefficiency and welfare loss.
Market Structures (Perfect Competition, Monopolistic Competition, Oligopoly, Monopoly)
Market power influences price‑setting ability.
Efficiency varies across structures; perfect competition is most efficient.
Barriers to entry shape long‑run outcomes.
Money & Banking
Banks facilitate saving and investment.
Credit availability influences household and business spending.
Central banks maintain price stability through monetary policy.
National Budget / Fiscal Policy
Used to manage the economy via spending and taxation.
A budget deficit stimulates the economy; a surplus can reduce inflation.
Impacts income distribution depending on policy choices.
Price Ceilings / Price Floors
Ceilings (e.g., rent caps) can cause shortages.
Floors (e.g., minimum wage) can cause surpluses of labour.
Both distort the free market equilibrium.
Public Goods
Non‑excludable and non‑rival (e.g., street lighting, defence).
Underprovided by the market due to free‑rider problem.
Government provision ensures access and efficiency.
Supply and Demand Shocks
Price adjusts to restore equilibrium after a shock.
Shortages lead to higher prices; surpluses lead to lower prices.
Signals guide producers and consumers to change behaviour.
Sustainability / Environment
Addresses negative externalities like pollution.
Encourages long‑term resource management.
Supports green innovation through subsidies and regulation.
Taxation
Raises revenue for government services.
Discourages harmful behaviours through higher costs.
Redistributes income via progressive tax systems.
Broadening the tax base.
Trade Protectionism
Protects domestic industries from foreign competition.
Can lead to higher prices and reduced consumer choice.
Often used during economic uncertainty or geopolitical tension.
Unemployment
Reduces income and living standards.
Lowers tax revenue and increases welfare spending.
Represents wasted economic resources.