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Acknowledgements
This specification has been produced by Edexcel on the basis of consultation with teachers, examiners, consultants and other interested parties. Edexcel would like to thank all those who contributed their time and expertise to its development.
References to third-party material made in this specification are made in good faith. Edexcel does not endorse, approve or accept responsibility for the content of materials, which may be subject to change, or any opinions expressed therein. (Material may include textbooks, journals, magazines and other publications and websites.)
Authorised by Roger Beard Prepared by Lucy Stewart
All the material in this publication is copyright © Edexcel Limited 2008
Introduction
The Edexcel International General Certificate of Secondary Education (IGCSE) in Economics is designed for use in schools and colleges. It is part of a suite of IGCSE qualifications offered by Edexcel.
The Edexcel IGCSE in Economics is designed as a two-year course. As students progress through the course they are introduced to new ideas and concepts while continuing to use and reinforce previously learned concepts and skills. The course is designed to give students a sound understanding of economics, and the ability to use knowledge, skills and understanding appropriately in the context of individual countries and the global economy.
Key subject aims
The Edexcel IGCSE in Economics qualification enables students to:
• develop an understanding of economic concepts and apply these concepts to real-life situations
• interpret and evaluate economic data in order to make reasoned arguments and informed judgements
• develop an awareness of economic change and its impact on developing and developed economies
• understand economic issues, problems and possible solutions that affect mixed economies
• participate effectively in society as citizens, producers and consumers.
About this specification
Key features and benefits of the specification
Key features and benefits are:
• 100% examination — single assessment route allowing all students to demonstrate their knowledge and understanding of economics
• assessment opportunity in both January and June examination series
• comprehensive and detailed description of subject content
• subject content kept to manageable proportions
• provides opportunities to apply the subject content to local economic circumstances
• appropriate for students of various ages and from diverse backgrounds in terms of general education and lifelong learning
• provides a sound foundation for Edexcel AS GCE and Advanced GCE in Economics, or equivalent qualifications.
Contents
Specification at a glance 1
Qualification content 3 Paper 1: Economics 3
Content overview 3 Subject content 4 A The Market System 4 B Business Economics 7 C Government and the Economy 10 D The Global Economy 13
Assessment 15 Assessment summary 15
Assessment Objectives and weightings 15
Entering your students for assessment 16 Student entry 16 Combinations of entry 16 Access arrangements and special requirements 16
Assessing your students 16 Awarding and reporting 17 Language of assessment 17 Malpractice and plagiarism 17
Student recruitment 17
Progression 17
Grade descriptions 18
Support and training 19 Edexcel support services 19
Training 19
Textbooks and resources 20
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 1
Specification at a glance The Edexcel IGCSE in Economics is assessed through a written examination paper.
Paper 1: Economics Paper code: 4EC0/01
• Externally assessed
• Availability: January and June series
• First assessment: June 2011
Overview of content
There are four areas of subject content. Students are required to study all four areas.
A The Market System
– Demand and supply
– The role of the market in solving the economic problem
– The labour market
B Business Economics
– Production
– Competition
– Public and private sectors
C Government and the Economy
– Macroeconomic objectives
– Policies
– Relationship between objectives and policies
D The Global Economy
– Globalisation
– International trade
– Exchange rates
Overview of assessment
• This qualification is assessed through an examination paper lasting two hours and 30 minutes, set and marked by Edexcel.
• Single tier of entry.
• The total number of marks available is 120.
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 2
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 3
Qualification content
Paper 1: Economics
Content overview There are four areas of subject content. Students are required to study all four areas.
A The Market System
• Demand and supply
• The role of the market in solving the economic problem
• The labour market
B Business Economics
• Production
• Competition
• Public and private sectors
C Government and the Economy
• Macroeconomic objectives
• Policies
• Relationship between objectives and policies
D The Global Economy
• Globalisation
• International trade
• Exchange rates
Assessment overview
• The assessment of this qualification is through an examination paper lasting two hours and 30 minutes, set and marked by Edexcel.
• Single tier of entry.
• The total number of marks available is 120.
• The examination paper consists of four compulsory questions, each worth 30 marks.
• The questions are a mixture of structured, data response, short-answer, multiple-choice and open-ended questions.
• Each question will be based on a particular theme which will relate to one of the four sections of the subject content. However, due to the nature of economics, there may be some overlap between the questions.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
4 Su
bjec
t co
nten
t
A
The
Mar
ket
Syst
em
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
1 D
eman
d an
d su
pply
Rol
e in
the
dete
rmin
atio
n of
pr
ice
in th
e m
arke
t.
Dem
and
and
supp
ly c
urve
s
• Th
e re
latio
nshi
p be
twee
n pr
ice
and
quan
tity
dem
ande
d an
d qu
antit
y su
pplie
d.
• Th
e co
ncep
t of t
he m
arke
t equ
ilibr
ium
: shi
fts a
nd m
ovem
ents
of
dem
and
and
supp
ly c
urve
s.
• Fa
ctor
s aff
ectin
g de
man
d:
– ad
verti
sing
, inc
ome,
pop
ulat
ion,
fash
ion,
pric
e, o
ther
pr
oduc
ts, i
e co
mpl
emen
ts a
nd su
bstit
utes
.
• Fa
ctor
s aff
ectin
g su
pply
:
– co
sts o
f pro
duct
ion,
indi
rect
taxe
s and
subs
idie
s, ch
ange
s in
tech
nolo
gy, n
atur
al fa
ctor
s, eg
wea
ther
.
Dia
gram
s are
an
esse
ntia
l too
l for
bot
h th
e un
ders
tand
ing
and
anal
ysis
of d
eman
d an
d su
pply
. The
y sh
ould
be
used
:
• as
an
aid
to sh
ow th
e re
latio
nshi
p be
twee
n a
chan
ge in
pri
ce
and
a m
ovem
ent a
long
the
dem
and
and
supp
ly c
urve
s
• to
dis
tingu
ish
betw
een
the
effe
cts o
f a c
hang
e in
pri
ce
(mov
emen
t alo
ng th
e cu
rves
) and
a sh
ift in
the
curv
es fo
r bot
h de
man
d an
d su
pply
• to
ana
lyse
the
effe
cts o
f cha
nges
in d
eman
d an
d su
pply
on
the
mar
ket e
quili
briu
m p
rice
, qua
ntity
dem
ande
d an
d qu
antit
y su
pplie
d.
Stud
ents
shou
ld n
ote
that
the
topi
c Po
pula
tion
shou
ld in
clud
e th
e m
ain
dete
rmin
ants
of t
he si
ze a
nd a
ge d
istr
ibut
ion
of th
e po
pula
tion
and
the
depe
nden
cy ra
tio. T
he c
onse
quen
ces o
f ch
ange
s in
the
popu
latio
n on
dem
and,
firm
s, go
vern
men
t, ec
onom
y an
d th
e en
viro
nmen
t for
m th
e ba
sis o
f fur
ther
ana
lysi
s in
Sect
ions
B, C
and
D o
f the
subj
ect c
onte
nt.
Pr
ice
and
inco
me
elas
ticity
• D
efin
ition
s and
form
ulae
.
• Fa
ctor
s aff
ectin
g pr
ice
elas
ticity
of d
eman
d: su
bstit
utes
, de
gree
of n
eces
sity
, per
cent
age
of in
com
e sp
ent o
n go
ods o
r se
rvic
e.
• Fa
ctor
s aff
ectin
g pr
ice
elas
ticity
of s
uppl
y: ti
me,
ela
stic
ity o
f fa
ctor
s of p
rodu
ctio
n.
• Fa
ctor
s aff
ectin
g in
com
e el
astic
ity: n
orm
al a
nd in
ferio
r goo
ds.
• A
pplic
atio
n of
ela
stic
ity, i
ts e
ffec
ts o
n th
e de
cisi
on m
akin
g of
fir
ms a
nd g
over
nmen
t.
Cal
cula
tions
usi
ng th
e fo
rmul
ae a
re n
ot re
quir
ed. D
iagr
ams w
ith
slop
es sh
owin
g el
astic
and
inel
astic
dem
and
and
supp
ly c
urve
s ar
e re
quir
ed.
Use
of t
otal
reve
nue
calc
ulat
ions
to sh
ow th
e re
latio
nshi
p be
twee
n a
chan
ge in
pri
ce a
nd th
e ch
ange
in to
tal r
even
ue fo
r diff
erin
g el
astic
ities
is im
port
ant.
Use
of d
ata
to sh
ow th
e re
latio
nshi
p be
twee
n ch
ange
s in
inco
me
and
quan
tity
dem
ande
d re
quir
ed. D
iagr
ams n
ot re
quir
ed.
Appl
icat
ion
and
anal
ysis
of e
xam
ples
requ
ired
. Inc
lude
the
diffe
renc
es in
ela
stic
ity o
f sup
ply
betw
een
man
ufac
ture
d go
ods
and
prim
ary
prod
ucts
.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
5
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
2 T
he r
ole
of th
e m
arke
t in
solv
ing
the
econ
omic
pr
oble
m
Res
olvi
ng sc
arci
ty
• Fi
nite
reso
urce
s and
cho
ice.
• O
ppor
tuni
ty c
ost a
nd it
s eff
ects
on
the
indi
vidu
al, f
irms a
nd
gove
rnm
ents
.
• Pr
oduc
tion
poss
ibili
ty c
urve
s to
illus
trate
opp
ortu
nity
cos
t
Exam
ples
of o
ppor
tuni
ty c
ost n
eede
d.
T
he m
ixed
eco
nom
y
• D
efin
ition
s of m
ixed
eco
nom
y, p
ublic
sect
or a
nd p
rivat
e se
ctor
.
• C
once
pt o
f mar
ket f
ailu
re a
nd ro
le o
f pub
lic se
ctor
.
• Th
e ro
le o
f the
pub
lic se
ctor
and
priv
ate
sect
ors i
n th
e pr
oduc
tion
of g
oods
and
serv
ices
.
How
the
prob
lem
s of w
hat t
o pr
oduc
e, h
ow to
pro
duce
and
for
who
m to
pro
duce
are
solv
ed th
roug
h th
e m
ixed
eco
nom
y. T
ypes
of
busi
ness
org
anis
atio
n in
the
priv
ate
sect
or n
ot re
quir
ed.
Con
cept
of e
ffici
ency
requ
ired
but
not
type
s of e
ffici
ency
, ie
allo
cativ
e an
d pr
oduc
tive.
Dis
cuss
ion
of m
oder
n ex
ampl
es, d
raw
n fr
om a
n ec
onom
y of
you
r ch
oice
.
3 T
he la
bour
m
arke
t: a
n ex
ampl
e of
a
mar
ket i
n a
mix
ed
econ
omy
Wag
es a
nd e
mpl
oym
ent i
n a
free
eco
nom
y
• D
ivis
ion
of la
bour
.
• A
dvan
tage
s and
dis
adva
ntag
es o
f div
isio
n of
labo
ur: f
or th
e w
orke
r and
for t
he fi
rm.
• Fa
ctor
s aff
ectin
g de
man
d fo
r lab
our:
– de
man
d fo
r fin
al p
rodu
ct
– av
aila
bilit
y of
subs
titut
es, e
g m
achi
nes
– pr
oduc
tivity
of t
he w
orkf
orce
.
• Fa
ctor
s aff
ectin
g su
pply
of l
abou
r:
– de
term
inan
ts o
f wor
king
pop
ulat
ion,
ie a
ge d
istri
butio
n,
retir
emen
t and
scho
ol-le
avin
g ag
e, fe
mal
e pa
rtici
patio
n in
th
e la
bour
forc
e.
• Q
ualif
icat
ions
and
trai
ning
.
Dia
gram
s ind
icat
ing
how
cha
nges
in d
eman
d an
d su
pply
of
labo
ur (i
n bo
th th
e ec
onom
y an
d pa
rtic
ular
occ
upat
ions
) sho
uld
be u
sed
to a
naly
se th
e ef
fect
s on
wag
es a
nd e
mpl
oym
ent.
Both
the
quan
tity
and
qual
ity o
f the
labo
ur sh
ould
be
cons
ider
ed.
Mar
gina
l rev
enue
pro
duct
ivity
theo
ry n
ot re
quir
ed.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
6 C
once
pt/id
ea
Con
tent
Il
lust
rativ
e gu
idan
ce fo
r te
ache
rs
3 T
he la
bour
m
arke
t: a
n ex
ampl
e of
a
mar
ket i
n a
mix
ed
econ
omy
(con
tinue
d)
Inte
rfer
ence
in th
e la
bour
mar
ket
• M
inim
um w
age
legi
slat
ion:
– re
ason
s for
the
legi
slat
ion
– di
agra
m to
show
the
effe
cts o
n w
ages
and
em
ploy
men
t.
• Tr
ade
unio
ns:
– ef
fect
s of t
heir
stre
ngth
on
wag
es a
nd e
mpl
oym
ent.
Refe
renc
e sh
ould
be
mad
e to
min
imum
wag
e le
gisl
atio
n in
an
econ
omy
of y
our c
hoic
e.
Des
crip
tions
of t
ypes
or d
etai
led
acco
unts
of f
unct
ions
of u
nion
s ar
e no
t req
uire
d. E
mph
asis
shou
ld b
e on
exp
lana
tion
of th
e ef
fect
s.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
7
B Bu
sine
ss E
cono
mic
s
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
1 Pr
oduc
tion
Prod
uctio
n an
d pr
oduc
tivity
• Fa
ctor
s of p
rodu
ctio
n: la
nd, l
abou
r, ca
pita
l, en
terp
rise.
• Se
ctor
s of t
he e
cono
my:
prim
ary,
seco
ndar
y, te
rtiar
y.
• C
hang
ing
impo
rtanc
e of
thes
e se
ctor
s in
term
s of e
mpl
oym
ent
and
outp
ut o
ver t
ime,
in d
evel
opin
g an
d de
velo
ped
econ
omie
s.
Emph
asis
on
the
diffe
renc
e be
twee
n pr
oduc
tion
and
prod
uctiv
ity.
Rela
te in
crea
ses i
n fa
ctor
s to
incr
ease
d pr
oduc
tion.
Mod
ern
exam
ples
, dra
wn
from
an
econ
omy
of y
our c
hoic
e.
Dat
a fo
r con
tras
ting
deve
lope
d an
d de
velo
ping
cou
ntri
es sh
ould
be
stud
ied
by c
onsi
deri
ng th
e m
ovem
ent a
way
from
pri
mar
y an
d to
war
ds se
cond
ary
and
tert
iary
indu
stry
.
Pr
oduc
tion
cost
s and
rev
enue
• Fi
xed
and
varia
ble
cost
s, to
tal c
ost,
aver
age
cost
, pric
e, to
tal
reve
nue
and
prof
it.
• Ec
onom
ies a
nd d
isec
onom
ies o
f sca
le.
• In
tern
al e
cono
mie
s: m
arke
ting,
tech
nica
l, fin
anci
al,
man
ager
ial,
risk-
bear
ing.
• Ex
tern
al e
cono
mie
s: sk
illed
labo
ur, i
nfra
stru
ctur
e, a
ncill
ary
firm
s.
• D
isec
onom
ies:
bur
eauc
racy
, lab
our r
elat
ions
.
Cal
cula
tions
with
sim
ple
num
eric
al e
xam
ples
requ
ired
.
Mar
gina
l cos
t and
mar
gina
l rev
enue
not
requ
ired
.
Dia
gram
of a
vera
ge c
ost c
urve
show
ing
effe
ct o
f eco
nom
ies a
nd
dise
cono
mie
s of s
cale
is th
e on
ly c
ost c
urve
requ
ired
.
Pr
oduc
tivity
and
wea
lth c
reat
ion
• Fa
ctor
s aff
ectin
g pr
oduc
tivity
:
– la
nd: u
se o
f fer
tilis
ers,
drai
nage
, irr
igat
ion
– la
bour
: im
prov
ed h
uman
cap
ital
– ca
pita
l: us
e of
mor
e m
achi
nery
and
tech
nolo
gica
l ad
vanc
es.
This
shou
ld fo
rm a
bas
is fo
r fur
ther
ana
lysi
s of e
cono
mic
gro
wth
in
Sec
tion
C o
f the
subj
ect c
onte
nt, G
over
nmen
t and
the
Eco
nom
y.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
8 C
once
pt/id
ea
Con
tent
Il
lust
rativ
e gu
idan
ce fo
r te
ache
rs
1 Pr
oduc
tion
(con
tinue
d)
Ext
erna
litie
s: c
osts
and
ben
efits
• So
cial
cos
t = p
rivat
e co
st +
ext
erna
l cos
t (po
llutio
n,
cong
estio
n).
• So
cial
ben
efit
= pr
ivat
e be
nefit
+ e
xter
nal b
enef
it (e
duca
tion,
he
alth
).
• G
over
nmen
t pol
icy
to d
eal w
ith e
xter
nalit
ies:
taxa
tion,
su
bsid
ies,
fines
, gov
ernm
ent r
egul
atio
n.
This
shou
ld fo
rm a
bas
is fo
r fur
ther
ana
lysi
s of p
rote
ctio
n of
the
envi
ronm
ent i
n Se
ctio
n C
of t
he su
bjec
t con
tent
, Gov
ernm
ent a
nd
the
Eco
nom
y.
Dia
gram
s are
not
req
uire
d.
Stud
ents
shou
ld c
onsi
der t
he e
ffect
s of e
xter
nalit
ies i
n re
latio
n to
fir
ms a
nd c
onsu
mer
s. Ap
plic
atio
n of
con
cept
s to
exam
ples
from
an
econ
omy
of y
our c
hoic
e.
2 C
ompe
titio
n C
ompe
titiv
e m
arke
ts
• A
dvan
tage
s and
dis
adva
ntag
es o
f com
petit
ion
to fi
rms,
cons
umer
s and
the
econ
omy:
eff
icie
ncy,
cho
ice,
qua
lity,
in
nova
tion.
• A
dvan
tage
s and
dis
adva
ntag
es o
f lar
ge a
nd sm
all f
irms.
• Fa
ctor
s inf
luen
cing
the
grow
th o
f firm
s; c
ause
s, ty
pes,
limita
tions
.
Emph
asis
on
mar
kets
hav
ing
vary
ing
degr
ees o
f com
petit
ion
depe
ndin
g up
on th
e nu
mbe
r of f
irm
s in
the
mar
ket.
A st
udy
of
perf
ect c
ompe
titio
n no
t req
uire
d.
Lim
itatio
ns sh
ould
incl
ude
size
of m
arke
t, ai
m o
f ent
repr
eneu
r an
d la
ck o
f fin
ance
.
M
onop
oly
• M
ain
feat
ures
: bar
riers
to e
ntry
, one
dom
inan
t sup
plie
r in
a m
arke
t.
• Le
gal d
efin
ition
(s).
• A
dvan
tage
s and
dis
adva
ntag
es o
f mon
opol
y: e
cono
mie
s of
scal
e, p
rodu
ct in
nova
tion,
pric
e, c
hoic
e, e
ffic
ienc
y.
Mod
ern
exam
ples
of b
arri
ers t
o en
try
from
an
econ
omy
of y
our
choi
ce b
ut n
o de
tail
requ
ired
.
Lega
l def
initi
on is
, for
exa
mpl
e ta
ken
as 2
5% m
arke
t sha
re.
Dia
gram
s not
requ
ired
but
abi
lity
to a
naly
se a
nd e
valu
ate
in
wri
ting
is re
quir
ed.
O
ligop
oly
• M
ain
feat
ures
: bar
riers
to e
ntry
, a fe
w, l
arge
firm
s dom
inat
e th
e m
arke
t, ca
rtels
, non
-pric
e an
d pr
ice
com
petit
ion.
• A
dvan
tage
s and
dis
adva
ntag
es o
f olig
opol
ies:
eco
nom
ies o
f sc
ale,
com
petit
ion,
col
lusi
on.
Anal
ysis
requ
ired
of m
oder
n ex
ampl
es o
f olig
opol
istic
pra
ctic
es
from
an
econ
omy
of y
our c
hoic
e, fo
r exa
mpl
e th
e ca
r ind
ustr
y in
Fr
ance
.
Dia
gram
s not
requ
ired
.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
9
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
3 Pu
blic
and
pri
vate
se
ctor
s D
iffer
ence
s bet
wee
n pu
blic
and
pri
vate
sect
ors i
n te
rms o
f ow
ners
hip,
con
trol
, aim
s.
G
over
nmen
t reg
ulat
ion
• To
pro
mot
e co
mpe
titio
n: m
onop
oly
and
mer
ger c
ontro
l.
• To
influ
ence
loca
tion
of fi
rms:
solu
tion
to re
gion
al p
robl
ems
of u
nem
ploy
men
t, co
nges
tion,
inco
me
ineq
ualit
y.
Out
line
know
ledg
e of
com
petit
ion
polic
y in
a c
ount
ry o
f you
r ch
oice
.
Fact
ors a
ffect
ing
loca
tion
of in
dust
ry n
ot re
quir
ed.
Pr
ivat
isat
ion
Effe
cts o
f priv
atis
atio
n on
con
sum
ers,
wor
kers
, firm
s, go
vern
men
t an
d th
e ec
onom
y.
Abili
ty to
ana
lyse
mod
ern
exam
ples
requ
ired
, fro
m a
cou
ntry
of
your
cho
ice.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
10
C G
over
nmen
t an
d th
e Ec
onom
y
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
1 M
acro
econ
omic
ob
ject
ives
Fi
ve m
acro
econ
omic
obj
ectiv
es: e
cono
mic
gro
wth
; inf
latio
n;
unem
ploy
men
t; ba
lanc
e of
pay
men
ts o
n cu
rren
t ac
coun
t; pr
otec
tion
of th
e en
viro
nmen
t. Th
ese
are
outli
ned
in g
reat
er d
etai
l be
low
.
Stud
ents
are
exp
ecte
d to
be
able
to u
nder
stan
d an
d an
alys
e si
mpl
e da
ta re
latin
g to
the
five
mac
roec
onom
ic o
bjec
tives
.
Stud
ents
shou
ld st
udy
regi
onal
pol
icy
in th
e co
ntex
t of t
he fi
ve
obje
ctiv
es.
E
cono
mic
gro
wth
• G
ross
Dom
estic
Pro
duct
(GD
P) a
s the
mea
sure
men
t of
econ
omic
gro
wth
: tot
al g
row
th a
nd ra
te o
f gro
wth
.
• Th
e ec
onom
ic c
ycle
: rec
over
y; b
oom
; rec
essi
on; s
lum
p.
Stud
ents
are
not
requ
ired
to h
ave
know
ledg
e of
nat
iona
l ac
coun
ting.
Som
e gr
asp
of th
e lim
itatio
ns o
f GD
P as
a m
easu
re is
ex
pect
ed.
In
flatio
n
• M
easu
rem
ent o
f inf
latio
n: R
etai
l Pric
e In
dex
(RPI
) or
Con
sum
er P
rice
Inde
x (C
PI).
• C
ause
s: d
eman
d pu
ll, c
ost p
ush,
mon
ey su
pply
.
• C
onse
quen
ces:
eff
ects
on
pric
es, s
avin
gs, w
ages
, bal
ance
of
paym
ents
, une
mpl
oym
ent,
the
func
tions
of m
oney
.
A de
taile
d kn
owle
dge
of th
e RP
I or C
PI is
not
requ
ired
; ana
lysi
s of
the
caus
es a
nd c
onse
quen
ces o
f inf
latio
n sh
ould
be
the
maj
or
focu
s.
Cha
ract
eris
tics o
f mon
ey a
re n
ot re
quir
ed.
U
nem
ploy
men
t
• In
tern
atio
nal L
abou
r Org
anis
atio
n (I
LO) m
easu
rem
ent o
f un
empl
oym
ent.
• Ty
pes —
cyc
lical
, stru
ctur
al, f
rictio
nal,
seas
onal
, vol
unta
ry.
Stud
ents
are
not
requ
ired
to h
ave
deta
iled
know
ledg
e of
un
empl
oym
ent f
igur
es b
ut sh
ould
be
able
to a
pply
and
ana
lyse
ty
pes o
f une
mpl
oym
ent.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
11
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
1 M
acro
econ
omic
ob
ject
ives
(c
ontin
ued)
Bal
ance
of p
aym
ents
on
curr
ent a
ccou
nt
• D
efic
its a
nd su
rplu
ses.
• Tr
ade
in g
oods
(vis
ible
s) a
nd tr
ade
in se
rvic
es (i
nvis
ible
s)
Mod
ern
exam
ples
of t
he c
urre
nt a
ccou
nt, f
rom
a c
ount
ry o
f you
r ch
oice
, are
requ
ired
.
Pr
otec
tion
of th
e en
viro
nmen
t
• U
se o
f reg
ulat
ion
and
taxa
tion
to in
fluen
ce b
usin
ess a
nd
cons
umer
beh
avio
ur.
Stud
ents
shou
ld n
ote
that
exc
hang
e ra
tes a
re d
ealt
with
und
er
Sect
ion
D o
f the
subj
ect c
onte
nt, T
he G
loba
l Eco
nom
y.
Stud
ents
shou
ld b
e aw
are
that
the
envi
ronm
ent i
s inc
reas
ingl
y a
conc
ern
of g
over
nmen
ts.
Exte
rnal
cos
t/ben
efits
dia
gram
s are
not
requ
ired
.
2 Po
licie
s: to
dea
l w
ith e
cono
mic
gr
owth
, inf
latio
n,
unem
ploy
men
t, th
e ba
lanc
e of
pa
ymen
ts o
n cu
rren
t acc
ount
an
d th
e pr
otec
tion
of th
e en
viro
nmen
t
Polic
y in
stru
men
ts
Dem
and
side
• Fi
scal
: gov
ernm
ent r
even
ue a
nd e
xpen
ditu
re.
• R
even
ue: d
irect
and
indi
rect
taxa
tion.
• M
ain
area
s of p
ublic
sect
or sp
endi
ng.
• Ta
xatio
n, re
gula
tion
and
ince
ntiv
es a
imed
at t
he p
rote
ctio
n of
th
e en
viro
nmen
t.
• M
onet
ary:
– in
tere
st ra
tes a
nd m
oney
supp
ly
– ef
fect
s of i
nter
est r
ates
on
cons
umer
s’ a
nd fi
rms’
de
cisi
ons.
• M
oney
supp
ly: r
elat
ions
hip
with
inte
rest
rate
s and
infla
tion.
Stud
ents
are
not
requ
ired
to d
raw
dia
gram
s or t
o us
e Ag
greg
ate
Supp
ly/A
ggre
gate
Dem
and
mod
el (A
S/AD
) ana
lysi
s in
thei
r an
swer
s.
Stud
ents
shou
ld u
nder
stan
d th
at fi
scal
pol
icy
oper
ates
thro
ugh
gove
rnm
ent b
udge
ts a
nd a
ppre
ciat
e th
e lik
ely
impa
ct o
f a b
udge
t de
ficit
or su
rplu
s. D
etai
led
know
ledg
e of
any
spec
ific
budg
et is
no
t re
quir
ed.
Stud
ents
are
not
requ
ired
to h
ave
deta
iled
know
ledg
e of
mon
ey
supp
ly d
efin
ition
s.
Su
pply
side
• Su
pply
side
pol
icie
s: p
rivat
isat
ion;
der
egul
atio
n; e
duca
tion
and
train
ing;
pro
duct
ivity
of t
he w
orkf
orce
.
Stud
ents
shou
ld u
nder
stan
d th
at su
pply
side
pol
icie
s ope
rate
ove
r a
long
er te
rm th
an d
eman
d si
de p
olic
ies.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
12
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
3 R
elat
ions
hip
betw
een
obje
ctiv
es
and
polic
ies
This
brin
gs to
geth
er
1 an
d 2.
• Th
e di
ffer
ent e
ffec
ts th
at m
acro
econ
omic
mea
sure
s may
hav
e on
the
five
mac
roec
onom
ic o
bjec
tives
.
• Th
ese
effe
cts w
ill b
e bo
th p
ositi
ve a
nd n
egat
ive,
and
may
in
volv
e tra
de-o
ffs b
etw
een
obje
ctiv
es a
nd is
sues
of e
quity
.
This
sect
ion
shou
ld n
ot b
e se
en a
s a se
para
te p
art.
Anal
ysis
and
ev
alua
tion
of o
bjec
tives
and
pol
icie
s sho
uld
be p
art o
f Sec
tions
C1
and
C2.
Stud
ents
are
exp
ecte
d to
be
able
to a
naly
se a
nd e
valu
ate
the
effe
ctiv
enes
s of d
iffer
ent p
olic
ies i
n a
vari
ety
of e
cono
mic
si
tuat
ions
.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
13
D
The
Glo
bal E
cono
my
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
1 G
loba
lisat
ion
• Th
e in
crea
sing
inte
grat
ion
and
inte
rdep
ende
nce
of n
atio
nal
econ
omie
s.
• M
NC
s (m
ulti-
natio
nal c
ompa
nies
) sou
rce
fact
ors,
prod
uce
and
sell
in v
ario
us c
ount
ries.
• R
easo
ns fo
r glo
balis
ed o
pera
tions
; key
driv
ers i
n gl
obal
ec
onom
y, in
clud
ing
role
of I
CT,
tran
spor
t and
tour
ism
.
• FD
I (fo
reig
n di
rect
inve
stm
ent)
and
deve
lopm
ent a
id a
s fa
ctor
s enc
oura
ging
glo
balis
atio
n.
• W
inne
rs a
nd lo
sers
from
glo
balis
atio
n:
– M
NC
s and
dev
elop
ed c
ount
ries
– in
tern
atio
nal d
ebt,
com
mod
ity p
rices
and
livi
ng st
anda
rds
in d
evel
opin
g co
untri
es
– ef
fect
on
the
deve
lopm
ent g
ap
– im
pact
s on
the
natu
ral e
nviro
nmen
t.
Stud
y of
the
glob
al o
pera
tions
of a
nam
ed M
NC
(MN
Cs i
nclu
de
maj
or b
anks
).
Stud
ents
shou
ld a
lso
unde
rsta
nd th
e ro
le o
f the
gov
ernm
ent i
n gl
obal
isat
ion.
Anal
ysis
and
eva
luat
ion
of m
oder
n ex
ampl
es o
f inw
ard
inve
stm
ent
into
a c
ount
ry o
f you
r cho
ice,
of a
dev
elop
men
t aid
pro
ject
, and
of
the
effe
cts o
f deb
t and
exp
ort p
rice
s for
com
mod
ities
on
livin
g st
anda
rds i
n an
y na
med
dev
elop
ing
coun
try.
2 In
tern
atio
nal t
rade
Gro
wth
and
cha
nge
in in
tern
atio
nal t
rade
• Si
gnifi
canc
e of
trad
e in
goo
ds a
nd se
rvic
es:
– fo
r cho
ice
and
com
petit
ion
– fo
r gro
wth
and
GD
P.
• Fr
ee tr
ade
and
prot
ectio
n: ta
riffs
, quo
tas a
nd su
bsid
ies f
or
natio
nal s
ecur
ity o
r dom
estic
em
ploy
men
t rea
sons
.
The
Law
of C
ompa
rativ
e Ad
vant
age
not r
equi
red.
Stud
ents
shou
ld h
ave
know
ledg
e of
the
adva
ntag
es a
nd
disa
dvan
tage
s of f
ree
trad
e an
d pr
otec
tion.
Basi
c su
pply
and
dem
and
diag
ram
s to
show
the
impa
ct o
f tar
iffs,
subs
idie
s and
quo
tas o
n fo
reig
n tr
ade
are
requ
ired
.
Spec
ifica
tion
– Ed
exce
l IG
CSE
in E
cono
mic
s (4E
C0)
– Is
sue
1 –
Sept
embe
r 200
8 ©
Ede
xcel
Lim
ited
2008
14
Con
cept
/idea
C
onte
nt
Illu
stra
tive
guid
ance
for
teac
hers
2 In
tern
atio
nal t
rade
(c
ontin
ued)
C
hang
ing
patt
erns
of w
orld
trad
e:
• M
oder
n tra
ding
blo
cs —
eff
ects
of b
loc
on m
embe
r and
non
-m
embe
r cou
ntrie
s.
• Th
e W
TO (W
orld
Tra
de O
rgan
izat
ion)
and
gro
wth
of
inte
rnat
iona
l tra
de
• C
ontra
st b
etw
een
deve
lope
d an
d de
velo
ping
cou
ntrie
s.
Stud
ents
will
nee
d m
oder
n ex
ampl
es o
f the
invo
lvem
ent i
n w
orld
tr
ade
of a
cou
ntry
of y
our c
hoic
e. N
amed
exa
mpl
es o
f reg
iona
l tr
ade
bloc
s.
Stud
ents
shou
ld b
e ab
le to
reca
ll ex
ampl
es o
f WTO
act
ion
and
its
effe
cts.
3 E
xcha
nge
rate
s T
he w
orld
wid
e si
gnifi
canc
e of
exc
hang
e ra
tes
• Fa
ctor
s aff
ectin
g ex
chan
ge ra
tes t
hrou
gh d
eman
d fo
r and
su
pply
of c
urre
ncie
s:
– im
ports
and
exp
orts
of g
oods
and
serv
ices
– in
tere
st ra
tes
– cu
rren
cy sp
ecul
atio
n.
• Im
pact
of e
xcha
nge
rate
cha
nges
on:
– im
port
and
expo
rt pr
ices
– ba
lanc
e of
pay
men
ts o
n cu
rren
t acc
ount
.
• C
urre
ncy
depr
ecia
tion/
deva
luat
ion
as c
urre
nt a
ccou
nt d
efic
it po
licy.
Stud
ents
will
nee
d m
oder
n ex
ampl
es o
f the
wor
ld’s
pri
me
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Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 15
Assessment
Assessment summary Paper 1 is externally assessed through an examination paper.
Summary of table of assessment
Paper 1: Economics Paper code: 4EC0/01
• The assessment of this qualification is through an examination paper lasting two hours and 30 minutes, set and marked by Edexcel.
• Single tier of entry.
• The total number of marks available is 120.
Assessment Objectives and weightings % in IGCSE
AO1: demonstrate knowledge and understanding of the specified subject content
30-35%
AO2: apply knowledge and understanding using appropriate terms, concepts, theories and methods effectively to address problems and issues
30-35%
AO3: select, organise, analyse and interpret information from various sources to analyse problems and issues
15-20%
AO4: evaluate evidence, make reasoned judgements and present conclusions accurately and appropriately.
15-20%
TOTAL 100%
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 16
Entering your students for assessment
Student entry
Details of how to enter students for this qualification can be found in Edexcel’s International Information Manual, copies of which (in CD format) are sent to all active Edexcel centres. The information can also be found on Edexcel’s international website: www.edexcel-international.org/sfc/academic/infomanual
Combinations of entry
There are no forbidden combinations.
Access arrangements and special requirements
Edexcel's policy on access arrangements and special considerations for GCE, GCSE, IGCSE, and Entry Level qualifications aims to enhance access to the qualifications for students with disabilities and other difficulties without compromising the assessment of skills, knowledge, understanding or competence.
Please see the Edexcel website (www.edexcel.org.uk/sfc) for:
• the Joint Council for Qualifications (JCQ) policy Access Arrangements and Special Considerations, Regulations and Guidance Relating to Students who are Eligible for Adjustments in Examinations
• the forms to submit for requests for access arrangements and special considerations
• dates for submission of the forms.
Requests for access arrangements and special considerations must be addressed to:
Special Requirements Edexcel One90 High Holborn London WC1V 7BH
Assessing your students The first assessment opportunity for Paper of this qualification will take place in the June 2011 series and in each following June and January series for the lifetime of the specification.
Your student assessment opportunities
Paper June 2011 January 2012 June 2012 January 2013
Paper 1: Economics
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 17
Awarding and reporting
The grading, awarding and certification of this qualification will follow the processes outlined in the current GCSE/GCE Code of Practice for courses starting in September 2009, which is published by the Qualifications and Curriculum Authority (QCA). The IGCSE qualification will be graded and certificated on an eight-grade scale from A* to G.
Students whose level of achievement is below the minimum standard for Grade G will receive an unclassified U. Where unclassified is received it will not be recorded on the certificate.
The first certification opportunity for the Edexcel IGCSE in Economics will be 2011.
Students whose level of achievement is below the minimum judged by Edexcel to be of sufficient standard to be recorded on a certificate will receive an unclassified U result.
Language of assessment
Assessment of this specification will be available in English only. Assessment materials will be published in English only and all work submitted for examination and moderation must be produced in English.
Malpractice and plagiarism
For up-to-date advice on malpractice and plagiarism, please refer to the JCQ’s Suspected Malpractice in Examinations: Policies and Procedures document on the JCQ website www.jcq.org.uk/
Student recruitment Edexcel’s access policy concerning recruitment to our qualifications is that:
• they must be available to anyone who is capable of reaching the required standard
• they must be free from barriers that restrict access and progression
• equal opportunities exist for all students.
Progression This qualification supports progression to:
• Edexcel AS/Advanced GCE in Economics and AS/Advanced GCE in Economics and Business Studies
• Level 3 BTEC Nationals in Business and other qualifications.
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 18
Grade descriptions Grade descriptions are provided to give a general indication of the standards of achievement likely to have been shown by candidates awarded particular grades. The descriptions must be interpreted in relation to the specification content; they are not designed to define that content. The grade awarded will depend in practice upon the extent to which the candidate has met the Assessment Objectives overall. Shortcomings in some aspects of the assessment may be balanced by better performance in others.
Grade A
Candidates can:
• demonstrate in-depth knowledge and critical understanding of the full range of the specification content
• apply this knowledge and critical understanding, using terms, concepts, theories and methods effectively to address problems and issues
• select and organise information from a wide variety of sources and interpret and use this information effectively to analyse problems and issues with a high degree of accuracy
• evaluate evidence, making reasoned judgements, and present conclusions accurately and appropriately.
Grade C
Candidates can:
• demonstrate knowledge and understanding of most aspects of the specification content
• apply this knowledge and understanding, using terms, concepts, theories and methods appropriately to address problems and issues
• select, organise, interpret and use information to analyse problems and issues with some accuracy
• make reasoned judgements and present conclusions that are supported by evidence.
Grade F
Candidates can:
• demonstrate knowledge and understanding of some aspects of the specification content
• apply this knowledge and understanding, using some terms, concepts, theories and methods to address problems and issues
• show some ability to select, organise, interpret and use simple information
• make judgements and present simple conclusions that are sometimes supported by evidence.
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 19
Support and training
Edexcel support services Edexcel has a wide range of support services to help you implement this qualification successfully.
ResultsPlus — ResultsPlus is an application launched by Edexcel to help subject teachers, senior management teams, and students by providing detailed analysis of examination performance. Reports that compare performance between subjects, classes, your centre and similar centres can be generated in ‘one-click’. Skills maps that show performance according to the specification topic being tested are available for some subjects. For further information about which subjects will be analysed through ResultsPlus, and for information on how to access and use the service, please visit www.edexcel.org.uk/resultsplus
Ask the Expert — Ask the Expert is a new service, launched in 2007, that provides direct email access to senior subject specialists who will be able to answer any questions you might have about this or any other specification. All of our specialists are senior examiners, moderators or verifiers and they will answer your email personally. You can read a biography for all of them and learn more about this unique service on our website at www.edexcel.org.uk/asktheexpert
Ask Edexcel — Ask Edexcel is Edexcel’s online question and answer service. You can access it at www.edexcel.org.uk/ask or by going to the main website and selecting the Ask Edexcel menu item on the left.
The service allows you to search through a database of thousands of questions and answers on everything Edexcel offers. If you don’t find an answer to your question, you can choose to submit it straight to us. One of our customer services team will log your query, find an answer and send it to you. They’ll also consider adding it to the database if appropriate. This way the volume of helpful information that can be accessed via the service is growing all the time.
Examzone — The Examzone site is aimed at students sitting external examinations and gives information on revision, advice from examiners and guidance on results, including re-marking, re-sitting and progression opportunities. Further services for students — many of which will also be of interest to parents — will be available in the near future. Links to this site can be found on the main homepage at www.examzone.co.uk
Training A programme of professional development and training courses, covering various aspects of the specification and examination, will be arranged by Edexcel. Full details can be obtained from our website: www.edexcel.org.uk
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 20
Textbooks and resources There are few recent economics textbooks available but the following titles are suitable for the basic theory and concepts. Dictionaries of economics terms are useful for definitions of the concepts contained in the specification. All resources are suggested as possible teaching aids only, and are not required reading for the course. The internet is valuable as a tool for research and learning. There is a variety of aids for students and teachers, including revision notes and case studies for the UK GCSE which can be adapted for IGCSE.
Please note that while resources are checked at the time of publication, materials may be withdrawn from circulation and website locations may change at any time.
Textbooks
Anderton A — Economics for GCSE, 2nd Edition (Collins, 1993) ISBN 0003274292
Bannock G — The Penguin Dictionary of Economics (Penguin, 1999) ISBN 0140513760
Black J — A Dictionary of Economics (Oxford Paperbacks, 1997) ISBN 0192800183
Moynihan D and Titley B — Economics: A Complete Course, 3rd Edition (Oxford University Press, 2001) ISBN 0199134138
Paisley and Quillfeldt — GCSE Economics (Longman, 1987) ISBN 0582005205
Pass C — Collins Dictionary of Economics (HarperCollins, 2000) ISBN 0004724739
Pratten J — GCSE Economics (Liverpool Academic Press, 2001) ISBN 1872807739
Websites
General websites
www.bbc.co.uk As well as topical issues there is also an education section.
www.bized.ac.uk Originally designed for business studies and now incorporates a wealth of useful information for both teachers and students.
www.s-cool.co.uk Although only available for AS/A level, many topics also apply to the IGCSE specification and are dealt with simply with revision questions.
www.tutor2u.net Originally for AS/A2 but developing more resources for GCSE level.
Current economic issues and statistical data
www.ebea.org.uk designed for teachers developing materials for themselves and students
www.economist.com Economist magazine
www.ft.com Financial Times newspaper
www.guardian.co.uk Guardian newspaper
Specification – Edexcel IGCSE in Economics (4EC0) – Issue 1 – September 2008 © Edexcel Limited 2008 21
UK data
www.bankofengland.co.uk For information on current interest rates and the UK’s financial system.
www.direct.gov.uk The website of the UK government, providing information for citizens from various government departments.
www.hm-treasury.gov.uk The UK’s economic and finance ministry. Access to budget reports and policy information.
www.statistics.gov.uk Holds all national statistics, for example economy, census, population, labour market.
World data
www.europa.eu.int/en/comm Holds statistics on all nations in the European Economic /eurostat Community.
www.oecd.org The website holds comparable statistics, economic and social data from countries committed to democracy and market economy.
www.worldbank.org Source of loans, credits and grants to developing countries. Website has a section on world data and research.
www.wto.org The World Trade Organization deals with rules of trade between nations. Includes a section on trade statistics.
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