Chain Bank

Chains of analysis for A Level and GCSE Economics. Each chain runs from a starting change to the words of the question, with the assumption behind every link.

Monetary policy

• Bank Rate rise → Inflation
• Bank Rate rise → Growth
• Bank Rate rise → Employment
• Bank Rate rise → Trade balance
• Bank Rate rise → Inequality
• Bank Rate rise → Fiscal balance
• Quantitative easing → Growth
• Quantitative easing → Inflation
• Quantitative easing → Employment
• Quantitative easing → Trade balance
• Quantitative easing → Inequality
• Quantitative easing → Fiscal balance

Fiscal policy

• Government spending rise → Growth
• Government spending rise → Inflation
• Government spending rise → Employment
• Government spending rise → Trade balance
• Government spending rise → Fiscal balance
• Income tax cut → Growth
• Income tax cut → Employment
• Income tax cut → Inequality
• Income tax cut → Fiscal balance
• VAT rise → Inflation
• VAT rise → Inequality
• VAT rise → Fiscal balance
• Government spending rise → Inequality
• Income tax cut → Inflation
• Income tax cut → Trade balance
• VAT rise → Growth

Supply-side policy

• Education and training → Growth
• Education and training → Employment
• Education and training → Inequality
• Education and training → Fiscal balance
• Infrastructure investment → Growth
• Infrastructure investment → Inflation
• Infrastructure investment → Trade balance
• Infrastructure investment → Development
• Corporation tax cut → Growth
• Corporation tax cut → Fiscal balance
• Corporation tax cut → Inequality
• Education and training → Development
• Education and training → Inflation
• Education and training → Trade balance
• Infrastructure investment → Employment
• Infrastructure investment → Inequality
• Infrastructure investment → Fiscal balance
• Corporation tax cut → Employment
• Corporation tax cut → Trade balance

Exchange rates

• Depreciation of the pound → Inflation
• Depreciation of the pound → Growth
• Depreciation of the pound → Employment
• Depreciation of the pound → Structure
• Depreciation of the pound → Trade balance
• Depreciation of the pound → Inequality
• Appreciation of the pound → Inflation
• Appreciation of the pound → Growth
• Appreciation of the pound → Employment
• Appreciation of the pound → Trade balance
• Appreciation of the pound → Structure

Trade and protectionism

• Tariff on imports → Inflation
• Tariff on imports → Employment
• Tariff on imports → Trade balance
• Tariff on imports → Fiscal balance
• Tariff on imports → Growth
• Tariff on imports → Structure
• Trade liberalisation → Growth
• Trade liberalisation → Inflation
• Trade liberalisation → Employment
• Trade liberalisation → Structure
• Trade liberalisation → Inequality
• Trade liberalisation → Development
• Joining a trading bloc → Growth
• Joining a trading bloc → Trade balance
• Joining a trading bloc → Inflation

Market failure

• Negative production externality → Resource allocation
• Negative production externality → Welfare
• Negative production externality → Third parties
• Negative production externality → Equity
• Negative consumption externality → Resource allocation
• Negative consumption externality → Welfare
• Negative consumption externality → Third parties
• Positive consumption externality → Resource allocation
• Positive consumption externality → Welfare
• Positive consumption externality → Third parties
• Positive consumption externality → Equity
• Public goods → Resource allocation
• Public goods → Welfare
• Information gaps → Resource allocation
• Information gaps → Welfare
• Information gaps → Equity

Government intervention

• Indirect tax → Consumers
• Indirect tax → Producers
• Indirect tax → Market failure
• Indirect tax → Government finances
• Indirect tax → Government failure
• Subsidy → Consumers
• Subsidy → Market failure
• Subsidy → Government finances
• Subsidy → Government failure
• Maximum price → Consumers
• Maximum price → Producers
• Maximum price → Government failure
• Minimum price → Consumers
• Minimum price → Producers
• Minimum price → Market failure
• Minimum price → Government failure
• Tradable pollution permits → Market failure
• Tradable pollution permits → Government failure
• Regulation → Market failure
• Regulation → Government failure

Labour markets

• Minimum wage rise → Wages
• Minimum wage rise → Employment
• Minimum wage rise → Inequality
• Minimum wage rise → Productivity
• Minimum wage rise → Prices and profits
• Rise in net migration → Wages
• Rise in net migration → Employment
• Rise in net migration → Productivity
• Stronger trade unions → Wages
• Stronger trade unions → Employment
• Stronger trade unions → Inequality
• Monopsony employer → Employment
• Monopsony employer → Wages
• Fall in demand for the product → Employment
• Fall in demand for the product → Wages

Market structures and competition

• Monopoly power → Prices
• Monopoly power → Profits
• Monopoly power → Efficiency
• Monopoly power → Consumers
• Monopoly power → Innovation
• Merger of rival firms → Prices
• Merger of rival firms → Profits
• Merger of rival firms → Efficiency
• Merger of rival firms → Consumers
• Collusion between oligopolists → Prices
• Collusion between oligopolists → Profits
• Collusion between oligopolists → Consumers
• Lower barriers to entry → Prices
• Lower barriers to entry → Profits
• Lower barriers to entry → Efficiency
• Lower barriers to entry → Consumers
• Price regulation of a utility → Prices
• Price regulation of a utility → Profits
• Price regulation of a utility → Efficiency
• Price regulation of a utility → Consumers
• Fines and merger blocking by the competition authority → Prices
• Fines and merger blocking by the competition authority → Consumers

Economic shocks

• Rise in world oil prices → Inflation
• Rise in world oil prices → Growth
• Rise in world oil prices → Employment
• Rise in world oil prices → Trade balance
• Rise in world oil prices → Inequality
• Global recession → Growth
• Global recession → Employment
• Global recession → Trade balance
• Global recession → Fiscal balance
• Global recession → Inflation
• Global recession → Development
• Fall in house prices → Growth
• Fall in house prices → Employment
• Fall in house prices → Inequality
• Fall in consumer confidence → Growth
• Fall in consumer confidence → Employment
• Fall in consumer confidence → Inflation
• Fall in consumer confidence → Trade balance

Globalisation and development

• Inflow of FDI from multinationals → Employment
• Inflow of FDI from multinationals → Growth
• Inflow of FDI from multinationals → Structure
• Inflow of FDI from multinationals → Trade balance
• Inflow of FDI from multinationals → Inequality
• Inflow of FDI from multinationals → Fiscal balance
• Foreign aid → Development
• Foreign aid → Growth
• Foreign aid → Trade balance
• Foreign aid → Fiscal balance
• Rise in commodity prices → Growth
• Rise in commodity prices → Trade balance
• Rise in commodity prices → Fiscal balance
• Rise in commodity prices → Structure
• Rise in commodity prices → Development
• Access to microfinance → Development
• Access to microfinance → Inequality
• Access to microfinance → Employment

Financial sector

• Banking crisis → Growth
• Banking crisis → Employment
• Banking crisis → Fiscal balance
• Banking crisis → Inflation
• Banking crisis → Trade balance
• Credit boom → Inflation
• Credit boom → Growth
• Credit boom → Trade balance
• Credit boom → Inequality
• Higher capital requirements for banks → Growth
• Higher capital requirements for banks → Fiscal balance
• Bank bailout → Fiscal balance
• Bank bailout → Growth
• Bank bailout → Inequality

Poverty and inequality

• Higher welfare benefits → Inequality
• Higher welfare benefits → Growth
• Higher welfare benefits → Employment
• Higher welfare benefits → Fiscal balance
• Higher welfare benefits → Development
• More progressive income tax → Inequality
• More progressive income tax → Employment
• More progressive income tax → Growth
• More progressive income tax → Fiscal balance
• Higher taxes on wealth → Inequality
• Higher taxes on wealth → Fiscal balance
• Higher taxes on wealth → Growth
• Rising income inequality → Growth
• Rising income inequality → Development
• Rising income inequality → Fiscal balance