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UPDATED TO 2023-2025 SYLLABUS

CAIE IGCSE
ECONOMICS
SUMMARIZED NOTES ON THE MNEMONICS SYLLABUS
Prepared for Yang Ye for personal use only.
CAIE IGCSE ECONOMICS

3.2. Factors Affecting Supply

1. The Basic Economic
Pizza Could Get B ad Tomorrow
Problem Prices of other goods/services
Cost of factors of production
1.1. The Factors of Production Global factors
Business optimism
“Caroline Enjoys Licking Lollipops” Technology advancement

C - Capital
E - Entrepreneurship 3.3. Factors Affecting PEDs
L - Land
L - Labour “People Prefer Snowy Nights”

P-Period of time
2. The Allocation of P-Proportion of Income spent
S-Substitute goods
Resources N-Necessity of product

3.4. Factors Affecting PES

2.1. Microeconomics: Focuses On
“Sally Sings Frankies Album Tonight”
“MICRO”
Supply available to meet demand
M - Markets
Spare production capacity availability
I - Individuals
C - Consumers Factor substitution availability
Availability of resources
R - Resources
O - Output Time

2.2. Macroeconomics: Focuses On 3.5. Market Failure

“MACRO-ECO” Humans U sually Encounter Many Poisonous Pests

M - Macro (whole economy) Harmful goods may be produced (e.g. drugs)‎

A - Aggregate (Demand & Supply) Unemployment – may become capital intensive
C - Country Environmental damages
R - Resources Monopolies dominate price
O - Output Only Profitable goods produced
E - Economic indicators Public goods not provided
C - Government policies
O - Overall 3.6. Advantages of a Market System

3. How Markets Work “I Enjoy Eating Ice Cream"

Incentive to produce goods consumers want (based solely

3.1. Factors Affecting Demand on consumer demand)
Encourages producers to Conserve resources
Producing Paper Is So Incredibly Painful Economic freedom
Incentive to acquire new Skills
Price Competition makes business more effective
Preferences
Income Available
Substitute/Complementary Goods 4. Money and Finance
Interest rates
Population 4.1. Functions of Money

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CAIE IGCSE ECONOMICS

“Sunny Mornings Unleash Smiles” Craft unions

Industrial unions
Store of value Non-manual unions/Professional unions
Medium of exchange General unions
Unit of account
Standard for deferred payment 5.3. Different Industrial Actions
4.2. Characteristics of Good Money “Skies Watch Over Greenfields

“Dolphins Swim Playfully Amidst Seashells” Strike

Work to rule
Divisibility Overtime ban
Scarcity Go slow
Portability
Acceptability‎ 5.4. Advantages of Trade Unions
Stability
“I Met Kind Bob”
4.3. Types of Lending from Commercial
Maintain employment/enhance job security
Banks Keep pay higher
Bring about minimum working standard
“My Lovely Cat Obeys" Improvement in health and society

Mortgages
Loans 5.5. Disadvantages of Trade Unions
Credit cards
Overdraft “Wise Wizards Find Loot”

Workers made redundant

4.4. Functions of the Central Bank Workers will need to pay union membership fees
Fashions change very quickly
"Some People Love Big Sunny Meadows." Lack of flexibility in working practices

Setting interest rates

Printing notes and minting coins 6. Growth of Firms
Lender of last resort
Banker for commercial banks and government
Supervising monetary policy 6.1. Measure a Firm's Size
Manage international financial system
"Many Owls Nest At Night."

5. Role of Trade Unions Market share

Organization
Number of employees
5.1. Functions of Trade Unions Amount of capital employed

Neglecting Development Is Common In Dictators

7. Economies of Scale
Negotiating wages and other non-wage benefits
Defending employee rights and jobs
Improve pay and other benefits 7.1. Economies of Scale
Improving working Conditions
Increase worker participation in business decisions "Tigers Roam Freely in Meadows."
Develop skills of union members
T echnical economies
Risk-bearing economies
5.2. Types of Trade Unions Financial economics
Marketing economies
Curiosity Inspires New Growth

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CAIE IGCSE ECONOMICS
7.2. Diseconomies of Scale
Always Learn More
A gglomeration diseconomies
Labour diseconomies
Management diseconomies
8. Competition
8.1. Firms Competition
“Mangoes Are Incredibly Iresistibly, Sweet!”
Maximize profits ‎
A chieve product superiority ‎
Increase the number of customers
Increase sales revenue
Expand Share of the total market sales
8.2. Disadvantages of Monopolies and
Oligopolies
“Lemonade Supports On Hot Rays."
Lower quality products
S upply less and charge higher prices
Offer less Consumer choice
Higher production costs
Restrict competition using barrier
8.3. Pricing Strategies
Penguins Enjoy Playing Marvelous Pranks."
Penetration pricing
Expansion pricing
Price leadership
Market skimming
Predatory pricing
8.4. Natural Barriers to Entry
Little Ants Eat Cookies."
Large customer base
A dvance product or patented processes
Equipment – can’t afford
C osts saving from large scale production
8.5. Artificial Barriers to Entry
Playful Squirrels Roam
Predatory pricing strategies used
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Preventing S uppliers from selling materials
Forcing Retailers to stock only their products
8.6. Competition Policy
Future-Focused Professionals Succeed
Fines on firms who abuse power
Forcing oligopolies and monopolies to break up
Public ownership of monopolies
S etting maximum price levels
9. Role of Government
9.1. Role of the Government in an
Economy as a Producer
Smiling Children Playfully Splash
S upply merit goods
C ontrol monopolies
Produce essential goods and services
S upply public goods
9.2. Main Macroeconomic Objectives
Lemonade Helps Energize Bodies
Low and stable rate of inflation
High and stable level of employment
Encourage economic growth
Balance of international transactions (should be stable)
9.3. Supply Side Policies
Every Company Should Deliver Free Tasty Lunches
Education and training
C ompetition policy
S ubsidies/grants
Deregulation ‎
Free trade agreement
T ax incentives subsidies
Labour market regulations
10. Taxation
10.1. Reasons to Tax
Fluttering Doves Roam at Day
Finance public expenditure
Discourage certain activities ‎
Redistribute income from rich to poor
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CAIE IGCSE ECONOMICS

Discourage the import of goods S ale of public sector assets ‎

Removing barriers to competition
10.2. Direct Taxes
10.8. Features of a Good Tax
People Plan Chess, Choose Tactics
E-Economy -Government administrators should be able to
Personal income tax collect taxes without spending too much time or money.
Payroll taxes S-Simplicity - T ax laws should be simple and easily
C orporation taxes understood.
C apital gains tax C- Certainty - It should be clear to the taxpayer when the
T ransfer tax tax is due, how much is due, and how it should be paid.
E -Equitability - The tax system should be fair so that no
10.3. Indirect Tax one bears too much or too little of the tax burden.

Ants Underneath The Eucalyptus: 11. Employment and

A d valorem taxes
User charges
Unemployment
T ariffs ‎
Excise duty 11.1. Personal and Economic
Consequences of Inflation
10.4. Advantages of Regulations
Roller Coasters Bring Intense Rides
Buy Apples in Limits
Reduces purchasing power
Balance between interests of firms and consumers
C auses unemployment
A llows government to regulate firms ‎
Boosts tax revenues
Improve efficiency and redistribute income
Increases government spending
Limit the effect of externalities ‎
Reduces real value of loans and savings
Decrease in company profits
10.5. Reasons to Subsidies
11.2. Deflation
Every Person Enjoys Pancakes

Encourage the production of goods of natural importance
Provide support for industries in decline ‎
Encourage the development of new products and
industries
Protect domestic industries against foreign competition ‎
10.6. Companies Nationalised in the
Past
Making Friends Creates Positivity
Faithful Friends Enjoy Evening Talks"
Firms make less revenues
Firms produce less as less demanded
Employers hire few workers
Expectation of prices to fall, people stop spending
T hings become cheaper
11.3. Consequences of Deflation
Rainy Days Bring Frogs Inside

Maintain a public service Reduce workforce

For safety Deep recession
C ontrol monopolies Bankruptcy
Protect employment Firms make less profit
Incomes fall in households
10.7. Public Sector Firms Privatised
11.4. Different types of Unemployment
Jack Carefully Swallows Raspberries"
Clean Surfaces Fight Germs
Joint ventures with private firms
C ontracting out C yclical

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CAIE IGCSE ECONOMICS

S tructural Fewer goods and services are produced

Frictional T ax revenues lower
S easonal Welfare payments rise

11.5. Personal Costs of Unemployment 11.7. Policies to Alleviate Poverty

Lost Dogs Discovered Father Takes Five Delicious Eclairs Regularly

Loss of income Food aid

Deskill of unemployment T echnological aid
Depressed and ill; strain on family Financial aid
Debt relief
Economic advice
11.6. Economic Costs of Unemployment Removing barriers to overseas trade

Friends Together Win

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CAIE IGCSE
Economics

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