A-Level Economics Diagrams

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Every diagram you need for A-Level Economics — micro and macro, fully labelled, across all major exam boards.

120 diagrams16 categoriesAQA · Edexcel · OCR · CIE

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120 diagrams

Supply & Demand

Demand Curve

The downward-sloping demand curve showing the inverse relationship between price and quantity demanded. Illustrates the law of demand with a standard D curve.

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Supply & Demand

Supply Curve

The upward-sloping supply curve showing the positive relationship between price and quantity supplied. Illustrates the law of supply with a standard S curve.

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Supply & Demand

Supply & Demand Equilibrium

Standard supply and demand diagram showing market equilibrium where quantity demanded equals quantity supplied, determining the equilibrium price and quantity.

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Supply & Demand

Demand Shift Right (Increase in Demand)

Diagram showing a rightward shift of the demand curve, leading to higher equilibrium price and quantity. Used to analyse factors increasing demand such as rising incomes or changing tastes.

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Supply & Demand

Demand Shift Left (Decrease in Demand)

Diagram showing a leftward shift of the demand curve, leading to lower equilibrium price and quantity. Used to analyse factors decreasing demand such as falling incomes or a substitute becoming cheaper.

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Supply & Demand

Supply Shift Right (Increase in Supply)

Diagram showing a rightward shift of the supply curve, leading to lower equilibrium price and higher quantity. Used to analyse cost reductions, technology improvements, or subsidies.

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Supply & Demand

Supply Shift Left (Decrease in Supply)

Diagram showing a leftward shift of the supply curve, leading to higher equilibrium price and lower quantity. Used to analyse cost increases, raw material shortages, or taxes.

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Supply & Demand

Equilibrium Shifts — Both Curves Shift Up

Diagram showing simultaneous rightward shifts of both supply and demand, with the net effect on equilibrium price ambiguous and equilibrium quantity rising.

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Supply & Demand

Equilibrium Shifts — Both Curves Shift Down

Diagram showing simultaneous leftward shifts of both supply and demand, with the net effect on equilibrium price ambiguous and equilibrium quantity falling.

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Supply & Demand

Market Surplus After Demand Shift

Diagram illustrating how a leftward demand shift creates a market surplus at the original price, and how the price mechanism restores equilibrium.

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Supply & Demand

Consumer & Producer Surplus

Diagram showing consumer surplus (area above price and below demand curve) and producer surplus (area below price and above supply curve) at market equilibrium.

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Supply & Demand

Deadweight Loss (Welfare Loss Triangle)

Diagram showing the welfare loss triangle created when output deviates from the allocatively efficient level, as occurs with taxes, price controls, or monopoly.

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Elasticity

Price Elasticity of Demand — Elastic

Demand curve with PED > 1 (elastic), showing that a given percentage price rise leads to a larger percentage fall in quantity demanded. Revenue falls when price rises.

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Elasticity

Price Elasticity of Demand — Inelastic

Demand curve with PED < 1 (inelastic), showing that a percentage price rise leads to a smaller percentage fall in quantity demanded. Revenue rises when price rises.

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Elasticity

Price Elasticity of Demand — Unitary

Demand curve with PED = 1, where percentage change in price equals percentage change in quantity demanded. Total revenue remains unchanged when price changes.

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Elasticity

Price Elasticity of Demand — Perfectly Elastic

Horizontal demand curve showing perfectly elastic demand (PED = ∞). Any price rise above the market price causes quantity demanded to fall to zero.

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Elasticity

Price Elasticity of Demand — Perfectly Inelastic

Vertical demand curve showing perfectly inelastic demand (PED = 0). Quantity demanded does not change regardless of the price level.

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Elasticity

PED and Total Revenue

Diagram linking the price elasticity of demand to total revenue, showing how revenue changes as price changes along an elastic or inelastic demand curve.

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Elasticity

Price Elasticity of Supply — Elastic

Supply curve with PES > 1 (elastic), showing that producers can increase output proportionally more than a price rise. Common in industries with spare capacity.

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Elasticity

Price Elasticity of Supply — Inelastic

Supply curve with PES < 1 (inelastic), showing that quantity supplied responds less than proportionally to a price rise. Common with perishable or capacity-constrained goods.

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Elasticity

Price Elasticity of Supply — Unitary

Supply curve with PES = 1, passing through the origin, where the percentage change in quantity supplied exactly matches the percentage change in price.

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Elasticity

Price Elasticity of Supply — Perfectly Elastic

Horizontal supply curve showing perfectly elastic supply (PES = ∞). Producers supply any quantity at a given price but nothing below it.

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Elasticity

Price Elasticity of Supply — Perfectly Inelastic

Vertical supply curve showing perfectly inelastic supply (PES = 0). Quantity supplied is fixed regardless of price, as with land or limited-edition goods.

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Elasticity

Cross Elasticity of Demand — Substitutes

Diagram showing positive cross elasticity of demand between substitute goods, where a rise in the price of one good increases the demand for the other.

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Elasticity

Cross Elasticity of Demand — Complements

Diagram showing negative cross elasticity of demand between complementary goods, where a rise in the price of one good reduces demand for the other.

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Elasticity

Income Elasticity of Demand — Normal Good

Diagram showing positive income elasticity of demand for normal goods, where a rise in income increases the quantity demanded at every price.

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Elasticity

Income Elasticity of Demand — Luxury Good

Diagram showing income elasticity of demand greater than 1 for luxury goods, where demand rises more than proportionally with income.

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Elasticity

Income Elasticity of Demand — Inferior Good

Diagram showing negative income elasticity of demand for inferior goods, where demand falls as income rises because consumers switch to superior alternatives.

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Costs & Production

Short-Run Costs (TC, TFC, TVC)

Diagram showing total cost, total fixed cost, and total variable cost curves in the short run, illustrating how costs change as output increases.

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Costs & Production

TC, TFC and TVC Curves

Detailed diagram of total cost, total fixed cost, and total variable cost curves showing the vertical gap (fixed costs) and the shape driven by diminishing marginal returns.

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Costs & Production

Long-Run Average Cost (LRAC) Curve

U-shaped LRAC curve (envelope curve) showing economies of scale, the minimum efficient scale, and diseconomies of scale in the long run.

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Costs & Production

Types of Economies of Scale

Diagram illustrating internal and external economies of scale, showing how average costs fall as a firm or industry expands output in the long run.

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Costs & Production

Breakeven and Shutdown Points

Diagram showing the breakeven point (P = AC) and the shutdown point (P = AVC) for a competitive firm, distinguishing short-run and long-run survival conditions.

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Market Structures

Profit Maximisation (MR = MC)

Diagram showing the profit-maximising output where marginal revenue equals marginal cost (MR = MC), with the profit rectangle between AR and AC illustrated.

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Market Structures

Monopoly — Profit Maximisation

Classic monopoly diagram with downward-sloping AR = Demand, MR below AR, and profit-maximising output at MR = MC, showing supernormal profit and deadweight welfare loss.

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Market Structures

Natural Monopoly

Diagram showing a natural monopoly where the LRAC is still falling across the entire relevant range of demand, making a single producer the most efficient market structure.

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Market Structures

Perfect Competition — Short Run to Long Run

Two-panel diagram showing industry equilibrium and individual firm behaviour in perfect competition, with the long-run adjustment process as supernormal profits attract entry.

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Market Structures

Perfect Competition — Loss-Making Firm

Diagram showing a perfectly competitive firm making a short-run loss (P < AC), with the loss rectangle illustrated and the decision to stay open while P > AVC.

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Market Structures

Monopolistic Competition — Short Run and Long Run

Diagram showing monopolistic competition in the short run (supernormal profit) and long run (normal profit), with the firm facing a downward-sloping demand curve.

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Market Structures

Oligopoly — Kinked Demand Curve

Sweezy's kinked demand curve model for oligopoly, explaining price rigidity: rivals match price cuts but not price rises, creating a kink and discontinuous MR curve.

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Market Structures

Contestable Markets

Diagram illustrating the theory of contestable markets, where the threat of new entry disciplines incumbent firms to price competitively even in concentrated markets.

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Market Structures

Allocative and Productive Efficiency

Diagram contrasting allocative efficiency (P = MC) and productive efficiency (P = min AC), showing where each is achieved and comparing market structures.

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Price Discrimination

First-Degree (Perfect) Price Discrimination

Diagram showing a monopolist extracting all consumer surplus by charging each consumer their maximum willingness to pay, eliminating the deadweight loss.

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Price Discrimination

Second-Degree Price Discrimination

Diagram showing block pricing (second-degree price discrimination), where consumers pay different prices for different quantities consumed, such as utility tariffs.

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Price Discrimination

Third-Degree Price Discrimination

Diagram showing market segmentation into two groups with different PEDs, with the firm charging a higher price in the inelastic segment and lower in the elastic segment.

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Government Intervention

Indirect Tax — Specific (Unit) Tax

Supply and demand diagram showing the effect of a specific per-unit tax: leftward supply shift, rise in consumer price, fall in producer price, tax revenue rectangle, and deadweight loss.

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Government Intervention

Indirect Tax — Ad Valorem Tax

Supply and demand diagram showing the effect of a percentage (ad valorem) tax, which rotates the supply curve, widening the tax wedge at higher quantities.

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Government Intervention

Subsidy — Government Subsidy Effect

Supply and demand diagram showing the effect of a per-unit government subsidy: rightward supply shift, lower consumer price, higher producer price, subsidy cost rectangle.

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Government Intervention

Price Ceiling (Maximum Price)

Diagram showing the effect of a government-imposed maximum price set below equilibrium, creating excess demand (shortage) and reducing total welfare.

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Government Intervention

Price Floor (Minimum Price)

Diagram showing the effect of a government-imposed minimum price set above equilibrium, creating excess supply (surplus) and reducing total welfare.

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Government Intervention

Buffer Stock Scheme

Diagram showing a buffer stock scheme where a government agency buys when prices fall below a floor and sells when prices rise above a ceiling to stabilise commodity prices.

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Government Intervention

Import Quota

Supply and demand diagram showing the effect of an import quota: domestic price rises above world price, domestic output increases, consumer surplus falls, and a quota rent is created.

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Government Intervention

Import Tariff

Supply and demand diagram showing the effect of an import tariff: domestic price rises, consumer surplus falls, government gains tariff revenue, and a deadweight loss is created.

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Government Intervention

Export Subsidy

Diagram showing the effect of an export subsidy on domestic and world markets, with domestic consumers paying a higher price and producers receiving the world price plus subsidy.

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Government Intervention

Tradable Pollution Permits (Cap and Trade)

Diagram illustrating a cap-and-trade scheme for pollution, showing how the permit market sets a price for emissions and achieves a socially optimal output level.

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Externalities

Negative Externality — Production

Diagram showing MSC above MPC, with the free market overproducing at Qp and the socially optimal output at Qs (MSC = MPB), along with the welfare loss triangle.

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Externalities

Negative Externality — Consumption

Diagram showing MSB below MPB, with the free market overconsumption at Qp and the socially optimal quantity at Qs (MSB = MSC), illustrating the welfare loss.

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Externalities

Positive Externality — Production

Diagram showing MSC below MPC, with the free market underproducing at Qp and the socially optimal output at Qs (MSC = MPB), with a Pigouvian subsidy restoring optimality.

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Externalities

Positive Externality — Consumption

Diagram showing MSB above MPB, with the free market underconsumption at Qp and the socially optimal quantity at Qs (MSB = MSC), illustrating the welfare gain from a subsidy.

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Externalities

Asymmetric Information

Diagram illustrating market failure due to asymmetric information (moral hazard and adverse selection), showing how information gaps lead to under- or over-provision of goods.

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Externalities

Public Goods and the Free Rider Problem

Diagram illustrating the free rider problem for non-excludable, non-rival public goods, showing why the market fails to provide them and justifying government provision.

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Externalities

Choice Architecture and Nudge Theory

Diagram illustrating behavioural economics interventions such as default options, framing, and nudges that shift consumer choices without restricting freedom.

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Externalities

Prospect Theory (Loss Aversion)

S-shaped value function from Kahneman and Tversky's Prospect Theory showing loss aversion — losses loom larger than equivalent gains in consumers' utility function.

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Labour Markets

Labour Market — Demand and Supply

Standard labour market diagram with downward-sloping labour demand (MRP) and upward-sloping labour supply, determining equilibrium wage and employment.

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Labour Markets

Marginal Revenue Product (MRP) Theory

Diagram showing the MRP curve as the labour demand curve, derived from diminishing returns, and used to determine the profit-maximising level of employment.

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Labour Markets

National Minimum Wage

Labour market diagram showing a minimum wage set above equilibrium, creating unemployment (excess supply of labour) or reducing it in a monopsony market.

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Labour Markets

Monopsony in the Labour Market

Diagram showing a monopsonist employer who faces an upward-sloping labour supply and MCL above supply, paying a lower wage and employing fewer workers than the competitive outcome.

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Labour Markets

Trade Union in a Competitive Labour Market

Diagram showing a trade union pushing wages above the competitive equilibrium, creating a wage-employment trade-off with unemployment shown.

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Labour Markets

Trade Union vs Monopsony (Bilateral Monopoly)

Diagram showing bilateral monopoly in the labour market — a trade union negotiating against a monopsonist employer, with the wage and employment level indeterminate between the two extremes.

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Labour Markets

Wage Discrimination and the Gender Pay Gap

Labour market diagram illustrating wage discrimination, showing how identical workers in different groups are paid below their MRP, creating a welfare loss.

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Income & Wealth

Lorenz Curve

Diagram showing the Lorenz curve measuring income inequality: the further the curve bows from the 45° line of perfect equality, the greater the inequality (Gini coefficient).

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Income & Wealth

Gini Coefficient — Country Comparison

Diagram comparing Lorenz curves for two countries with different Gini coefficients, illustrating relative income inequality and its change over time.

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AD/AS Model

AD/AS Diagram — Keynesian Model

Keynesian AD/AS diagram with a flat SRAS and an L-shaped (or horizontal) LRAS in the short run, illustrating how demand stimulus can raise real output when there is spare capacity.

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AD/AS Model

AD/AS Diagram — Classical / Monetarist Model

Classical AD/AS diagram with a vertical LRAS at the natural rate of output, showing that demand shocks only affect the price level in the long run.

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AD/AS Model

AD Shift Right — Keynesian (Below Full Employment)

Keynesian AD/AS diagram showing a rightward AD shift below full employment, increasing real GDP with little or no rise in the price level.

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AD/AS Model

AD Shift Right — Classical (At Full Employment)

Classical AD/AS diagram showing a rightward AD shift at full employment, causing only a rise in the price level with no permanent increase in real output.

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AD/AS Model

AD Shift Left — Recession

AD/AS diagram showing a leftward AD shift causing a fall in real GDP and a negative output gap, illustrating recession and demand-deficient unemployment.

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AD/AS Model

SRAS Shift Right (Positive Supply Shock)

AD/AS diagram showing a rightward SRAS shift due to falling input costs or technology improvement, reducing inflation and raising real output simultaneously.

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AD/AS Model

SRAS Shift Left (Negative Supply Shock)

AD/AS diagram showing a leftward SRAS shift due to rising input costs or supply disruption, causing stagflation — higher price level and lower real output.

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AD/AS Model

LRAS Shift Right (Long-Run Economic Growth)

AD/AS diagram showing a rightward shift of the LRAS representing an increase in the productive capacity of the economy (long-run supply-side growth).

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AD/AS Model

Supply-Side Policy and LRAS

Diagram showing how supply-side policies (education, deregulation, tax reform, infrastructure) shift the LRAS rightward, raising the economy's potential output.

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AD/AS Model

Negative Output Gap (Recessionary Gap)

AD/AS diagram illustrating a negative output gap where actual GDP is below potential GDP, associated with demand-deficient unemployment and deflationary pressure.

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AD/AS Model

Positive Output Gap (Inflationary Gap)

AD/AS diagram illustrating a positive output gap where actual GDP exceeds potential GDP, associated with demand-pull inflation and overheating.

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Inflation & Unemployment

Demand-Pull Inflation

AD/AS diagram showing demand-pull inflation where excess aggregate demand pulls the price level upward, typically associated with a positive output gap.

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Inflation & Unemployment

Cost-Push Inflation

AD/AS diagram showing cost-push inflation where a rise in production costs (wages, energy) shifts SRAS left, raising prices and reducing output simultaneously.

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Inflation & Unemployment

Inflation-Deflation Spiral

Diagram showing the self-reinforcing cycles of rising inflation (wage-price spiral) or deflation (debt-deflation trap) and their macroeconomic implications.

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Inflation & Unemployment

Inflation Expectations Shift (SRPC)

Phillips Curve diagram showing an upward shift of the SRPC due to higher inflation expectations, illustrating the expectations-augmented Phillips Curve adjustment process.

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Inflation & Unemployment

Demand-Deficient (Cyclical) Unemployment

Labour market diagram showing demand-deficient unemployment caused by a fall in aggregate demand, illustrated as a leftward shift in the labour demand curve.

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Inflation & Unemployment

Types of Unemployment and Aggregate Supply

Diagram illustrating different types of unemployment (frictional, structural, demand-deficient, seasonal) and their relationship to the NAIRU and LRAS position.

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Inflation & Unemployment

Short-Run Phillips Curve (SRPC)

Short-run Phillips Curve showing the inverse trade-off between inflation and unemployment — lower unemployment is associated with higher inflation in the short run.

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Inflation & Unemployment

Long-Run Phillips Curve (LRPC)

Vertical long-run Phillips Curve at the natural rate of unemployment (NAIRU), showing that there is no long-run trade-off between inflation and unemployment.

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Fiscal Policy

Expansionary Fiscal Policy

AD/AS diagram showing the effect of an increase in government spending or a tax cut, shifting AD right and raising real GDP (and potentially the price level).

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Fiscal Policy

Contractionary Fiscal Policy

AD/AS diagram showing the effect of a cut in government spending or a tax rise, shifting AD left to reduce inflationary pressure at the cost of lower real output.

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Fiscal Policy

Automatic Stabilisers

Diagram illustrating how automatic stabilisers (progressive tax and welfare spending) reduce the size of the fiscal multiplier and dampen cyclical fluctuations in GDP.

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Fiscal Policy

The Keynesian Multiplier Effect

Diagram illustrating the Keynesian multiplier: an initial injection of spending is magnified through successive rounds of consumption, producing a larger final change in GDP.

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Fiscal Policy

Keynesian Cross (45° Diagram)

The Keynesian cross (45° line) diagram showing equilibrium national income where aggregate expenditure equals national income, and the impact of injections on equilibrium.

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Fiscal Policy

Crowding Out

Diagram showing how increased government borrowing raises interest rates, reducing private investment and partially offsetting the fiscal stimulus (crowding out effect).

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Fiscal Policy

Laffer Curve

The Laffer Curve showing the relationship between tax rate and tax revenue, illustrating that beyond a peak rate, higher taxes reduce revenue by discouraging economic activity.

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Fiscal Policy

Accelerator Effect

Diagram showing the accelerator principle: investment responds more than proportionally to changes in national income, amplifying cyclical fluctuations.

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Monetary Policy

Monetary Policy Transmission Mechanism

Flow diagram showing how a change in the central bank base rate transmits through the economy: affecting market rates, asset prices, exchange rates, and ultimately output and inflation.

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Monetary Policy

Money Market Equilibrium

Diagram showing the money market with money supply (vertical) and money demand (downward-sloping), determining the equilibrium interest rate.

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Monetary Policy

Increase in Money Supply

Money market diagram showing a rightward shift in money supply, reducing the interest rate and stimulating borrowing and investment.

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Monetary Policy

Quantitative Easing (QE)

Diagram explaining quantitative easing: the central bank purchases government bonds, increasing the money supply, pushing down long-term interest rates, and boosting asset prices.

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Monetary Policy

Liquidity Trap

Money market diagram showing the liquidity trap: when interest rates approach zero, increases in money supply fail to lower rates further, making conventional monetary policy ineffective.

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Monetary Policy

Fisher's Equation of Exchange (MV = PQ)

Diagram illustrating the quantity theory of money (MV = PQ), showing how increases in money supply translate into price level rises when velocity and output are fixed.

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National Income

Circular Flow of Income (Basic)

Two-sector circular flow model showing the flow of income and expenditure between households and firms through goods markets and factor markets.

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National Income

Circular Flow with Leakages and Injections

Five-sector circular flow diagram showing leakages (savings, taxes, imports) and injections (investment, government spending, exports) and their effect on national income.

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National Income

Business (Trade) Cycle

Diagram of the economic business cycle showing boom, recession, trough, and recovery phases relative to trend GDP growth, along with output gap fluctuations.

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Exchange Rates

Floating Exchange Rate Determination

Supply and demand for currency diagram showing how the exchange rate is determined in a free-floating regime by the interaction of demand and supply of the currency.

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Exchange Rates

Currency Appreciation

Foreign exchange diagram showing an increase in demand for currency (or decrease in supply) leading to currency appreciation and its effects on exports, imports, and the current account.

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Exchange Rates

Currency Depreciation

Foreign exchange diagram showing a fall in demand for currency (or increase in supply) leading to depreciation, improving competitiveness but risking import-cost inflation.

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Exchange Rates

Fixed Exchange Rate and Intervention Band

Diagram showing a fixed exchange rate regime with a managed band, illustrating how the central bank intervenes to maintain the rate within the target range.

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Exchange Rates

J-Curve Effect

Time-series diagram showing the J-curve effect: after a currency depreciation the current account initially worsens before improving, as trade volumes adjust with a lag.

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Exchange Rates

Marshall-Lerner Condition

Diagram explaining the Marshall-Lerner condition: currency depreciation improves the current account only if the sum of PED for exports and imports exceeds one.

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Exchange Rates

Balance of Payments Structure

Diagram showing the structure of the balance of payments: current account (trade in goods and services, income, transfers) and capital/financial account and their interrelationship.

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Economic Growth

Production Possibility Frontier (PPF)

Concave PPF showing the maximum combinations of two goods an economy can produce with given resources, illustrating opportunity cost, productive efficiency, and scarcity.

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Economic Growth

PPF and Economic Growth

PPF diagram showing an outward shift representing economic growth (increase in productive capacity) through capital accumulation, technology, or labour force expansion.

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Economic Growth

Comparative Advantage and Specialisation

PPF-based diagram illustrating comparative advantage: countries gain from specialisation and trade even if one country has an absolute advantage in producing all goods.

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Economic Growth

Harrod-Domar Growth Model

Diagram illustrating the Harrod-Domar growth model: economic growth requires investment (funded by savings) to expand the capital stock, with growth rate = savings rate / capital-output ratio.

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Economic Growth

Lewis Dual Sector Model

Diagram illustrating the Lewis two-sector model of development: surplus labour moves from the traditional agricultural sector to the modern industrial sector, driving growth.

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