Reading the notation

Three graph models carry this paper — get their symbols precise, since mixing up which model is being drawn is the fastest way to lose the graphing marks.

📖 Symbols used in economic growth

8 terms

Cover the right column and check you can say what each one means.

AD, AS: Aggregate demand and aggregate supply — the SAME model used for inflation, here read for its effect on real GDP (Y) rather than just price level.
Operating balance: Government revenue minus government expenditure over a period — can improve or worsen from a growth project depending on which side moves more.
PL, Y: Price level and real GDP on the AS/AD graph — growth is a rightward shift in Y.
Circular flow model: A diagram of five sectors (households, producers, financial, government, overseas) connected by money flows — income, consumption, investment, taxes, exports, imports.
Injection: Money entering the circular flow from outside the households-producers loop: investment, government spending, or export receipts.
Leakage: Money leaving the circular flow: savings, taxes, or import payments.
Production possibility frontier (PPF): A curve showing the maximum combinations of two types of goods (e.g. capital and consumer goods) an economy can produce with its current resources.
Opportunity cost: On a PPF, the amount of ONE good given up to produce more of the other — read as a movement ALONG the curve.

Before writing anything

Identify which of the three recurring models this part is: AS/AD, circular flow, or PPF — each has its own checklist below.
Skim for a land-use change, a government operating-balance question, or a natural disaster — these signal the deeper skill sections further down this page.

Practice for this standard covers the whole topic — flashcards and quiz.