ZNOTES.

ORG

UPDATED TO 2022 SYLLABUS

CAIE IGCSE
ECONOMICS
(0455)
SUMMARIZED NOTES ON THE MNEMONICS SYLLABUS
CAIE IGCSE ECONOMICS (0455)

Public goods not provided

1. How Markets Work 1.6. What are the advantages of a

market system?
1.1. What are the factors affecting
demand? Incorrect Substitution Can Cause Errors

Producing Paper Is So Incredibly Painful Incentive to produce goods consumers want (based solely
on consumer demand)
Price Incentive to acquire new Skills
Preferences Encourages producers to Conserve resources
Income Available Competition makes business more effective
Substitute/Complementary Goods Economic freedom
Interest rates
Population
2. Money and Finance
1.2. What are the factors affecting
supply? 2.1. What are the functions of money?
SUMS
People Can Get Brain Tumour
Store of value
Prices of other goods/service
Unit of account
Cost of factors of production
Medium of exchange
Global factors
Standard for deferred payment
Business optimism
Technology advancement
2.2. What are the characteristics of
1.3. What are the factors affecting PEd? good money?
SPIN PADSS

Number of Substitutes Portability

Period of time Acceptability
Proportion of Income spent Divisibility
Necessity of product Scarcity ‎
Stability
1.4. What are the factors affecting PEs?
2.3. What are the types of lending from
Some Animals Feature Small Talons commercial banks?
Supply available to meet demand
Availability of resources
Lousy Olympians Created Monsters
Factor substitution availability
Loans
Spare production capacity availability
Overdraft
Time
Credit cards
Mortgages
1.5. How do markets fail?
2.4. What are the functions of the
Humans Usually Encounter Many Poisonous Pests
central bank?
Harmful goods may be produced (e.g. drugs)‎
Unemployment – may become capital intensive Leopard Patterned Suitcases Should Be Mutilated
Environmental damages
Monopolies dominate price Lender of last resort
Only Profitable goods produced Printing notes and minting coins

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CAIE IGCSE ECONOMICS (0455)

Setting interest rates Workers made redundant

Supervising monetary policy Workers will need to pay union membership fees
Banker for commercial banks and government Fashions change very quickly
Manage international financial system Lack of flexibility in working practices

3. Role of Trade Unions 4. Growth of Firms

3.1. What are the functions of trade 4.1. How can you measure a firms size?
unions?
OMAN
Neglecting Development Is Common In Dictators Organization
Market share
Negotiating wages and other non-wage benefits
Amount of capital employed
Defending employee rights and jobs
Number of employees
Improve pay and other benefits
Improving working Conditions
Increase worker participation in business decisions 5. Economies of Scale
Develop skills of union members

3.2. What are the types of trade unions? 5.1. What are the economies of scale?
Fill The Remaining Mugs
CING
Financial economies
Craft unions
Technical economies
Industrial unions
Risk-bearing economies
Non-manual unions/Professional unions
Marketing economies
General unions

3.3. What are the different industrial 5.2. What are the diseconomies of
actions? scale?
MAL
Only Workers Get Salaries
Management diseconomies
Overtime ban
Agglomeration diseconomies
Work to rule
Labour diseconomies
Go slow
Strike
6. Competition
3.4. What are the advantages of trade
unions? 6.1. Why do firms compete?
My Brother Kills Insects Many Actors Invest In Stocks

Maintain employment/enhance job security Maximize profits ‎

Bring about minimum working standard Achieve product superiority ‎
Keep pay higher Increase number of customers
Improvement in health and society Increase sales revenue
Expand Share of total market
sales
3.5. What are the disadvantages of
trade unions? 6.2. What are the disadvantages of
monopolies and oligopolies?
Who Wants Free Lamps?
Computer Sometimes Have Low RAM

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Offer less Consumer choice Supply public goods

Supply less and charge higher
prices
Higher production costs 7.2. What are the main macro-economic
Lower quality products
Restrict competition using
barrier objectives?

6.3. What are the pricing strategies? Lazy Homeowners Eat Burgers

Low and stable rate of inflation

Please Exclaim My Public Presence High and stable level of
employment
Encourage economic growth
Penetration pricing
Encourage trade and secure favourable
Balance of
Expansion pricing
international
transactions
Market skimming
Price leadership
Predatory pricing 7.3. What are the main macro-economic
objectives?
6.4. What are the natural barriers to
entry? Lazy Homeowners Eat Burgers

Low and stable rate of inflation

LACE High and stable level of
employment
Encourage economic growth
Large customer base
Encourage trade and secure favourable
Balance of
Advance product or patented
processes
international
transactions
Costs saving from large scale
production
Equipment – can’t afford
7.4. What are the supply side policies?
6.5. What are the artificial barriers to
Every Company Should Deliver Free Tasty Lunches
entry?
Education and training
PSR Competition policy
Subsidies/grants
Predatory pricing strategies used Deregulation ‎
Preventing Suppliers from selling
materials Free trade agreement
Forcing Retailers to stock only
their products Tax incentives subsidies
Labour market regulations
6.6. What is the competition policy?
Find First Person Shooter
8. Taxation
Fines on firms who abuse power 8.1. What are the reasons to tax?
Forcing oligopolies and
monopolies to break up
Public ownership of monopolies
Rowdy Ducks Drive Ferraris
Setting maximum price levels
Redistribute income from rich to
poor
7. Role of Government Discourage certain activities ‎
Discourage import of goods
Finance public expenditure
7.1. What is the role of the government
in an economy as a producer? 8.2. Direct taxes

Polite Students Capture Successes Poor People Can’t Consume Tea

Produce essential goods and

services Personal income tax
Supply merit goods Payroll taxes
Control monopolies Corporation taxes

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Capital games tax

9.1. What are the personal and
Transfer tax
economic consequences of inflation?
8.3. Indirect tax
RC-BIRD
Teachers Are Usually Eccentric
Reduces purchasing power
Tariffs ‎ Causes unemployment
Ad valorem taxes Boosts tax revenues
Increases government spending
Excise duty
Reduces real value of loans and
savings
User charges
Decrease in company profits

8.4. What are the advantages of

9.2. How does deflation take place?
regulations?
FFEET
BAIL
Firms make less revenues
Balance between interest of firms
and consumers Firms produce less as less
demanded
Allows government to regulate
firms ‎ Employers hire few workers
Improve efficiency and
redistribute income Expectation of prices to fall,
people stop spending
Limit affect of externalities ‎ Things become cheaper

8.5. What are the reasons to subsidies? 9.3. What are the consequences of
PEEP
deflation?

Provide support for industries in

decline ‎ F-BIRD
Encourage production of goods of
natural importance
Firms make less profit
Encourage development of new
products and industries
Bankruptcy
Protect domestic industries
against foreign competition ‎
Incomes fall in households
Reduce workforce
8.6. Why were companies nationalized Deep recession
in the past?
9.4. What are the different types of
Millionaires Fund Corrupt Politicians
unemployment?
Maintain a public service
For safety Car Security Features Sensors
Control monopolies
Cyclical
Protect employment
Structural
Frictional
8.7. How can public sector firms be Seasonal
privatized?
9.5. What are the personal costs of
Journalists Can Reveal Secrets
unemployment?
Joint ventures with private firms
Contracting out LDD
Removing barriers to competition
Loss of income
Sale of public sector assets ‎
Deskill of unemployment
Depressed and ill; strain on
family
9. Employment and
Unemployment

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9.6. What are the economic costs of FT FRED

unemployment? Food aid

Technological aid
FTW Financial aid
Removing barriers to overseas
trade
Fewer goods and services produced Economic advice
Tax revenues lower Debt relief
Welfare payments rise

9.7. What are the policies to alleviate

poverty?

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CAIE IGCSE
Economics (0455)

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