Understanding Micro and Macro in Paper 3 Essays

Introduction

• Importance of understanding the interchange between micro and macro for Paper 3 big essay questions.
• Preparation involves knowing all topic areas that can be micro or macro questions.
• Essential to write down micro and macro effects for each topic area.
• Beyond effects, consider causes, policies, factors, and reasons.

Major Topic Areas

Demand and Supply Shifts

• Effects: Micro effects like shifting revenue or cost curves; macro effects possible.

Government Intervention Policies

• Examples: Indirect taxes, subsidies, regulation, tradable pollution permits, state provision, price controls.
• Effects: Can extend into macro effects.

Price Volatility

• Focus: Micro and macro causes and effects of price volatility.

Market Structures

• Competitive vs. Concentrated Markets
  • Strong macro and micro effects.
• Monopoly Regulation and Competition Policy
  • Includes privatization, deregulation, and nationalization.
  • Both macro and micro impact.

Labor Market Themes

• Role of Trade Unions
• Impact of Strikes and Labor Shortages
• Gig Economy and Flexible Labor Markets
• Wage Differentials: Causes, effects, and minimum wage implications.

Inequality and Poverty

• Consequences: Micro and macro nature.
• Causes and Policies: Important to consider.

Business Growth

• Effects and Reasons: Why businesses pursue growth.

Macro Areas

Economic Indicators

• Growth, Unemployment, Inflation, Deflation: Micro and macro consequences and causes.

Macro Policy

• Fiscal Policy: Effects of government spending cuts/increases, tax changes.
• Monetary Policy: Interest rate changes, quantitative easing.

Trade and Globalization

• Free Trade vs. Protectionism: Effects and reasons, micro and macro implications.
• Globalization: Effects and underlying causes.

Currency and Development

• Current Account: Mainly micro and macro causes.
• Exchange Rates: Depreciation/appreciation effects and causes.
• Development: Factors, barriers, and policies/strategies for development.

Foreign Direct Investment (FDI)

• Effects and Reasons: Understanding why companies invest internationally.

Competitiveness

• Effects and Factors: Enhancing or promoting competitiveness.

Financial Markets

• Regulation and Policy Effects: Impact of changes.

Terms of Trade

• Changes and Causes: Understanding effects and what leads to changes.

Conclusion

• Utilize the list of topic areas to write micro and macro effects, causes, reasons, barriers, and policies.
• Explore available resources and videos for in-depth understanding.
• Preparedness for the big essay in Paper 3 by independent analysis and study.

Follow-up

• Watch more educational videos for detailed insights on each topic area.