The Aggregate Demand-Aggregate Supply (AD-AS) Model topic involves the study of different components affecting the AD and AS. For AD, it features consumption, investment, government and net exports. For National Income Determination (NID), it features areas of learning, like the circular flow of income, multiplier process, reverse-multiplier process and the equilibrium of national income. The comprehension of these concepts will be critical for the study of the following chapters, namely the economic indicators and macroeconomic policies.

National Income Accounting (NIA) refers to the study of various economic indicators that are used to measure the economic performance of countries. By doing so, governments can assess the current standard of living of the countries. Areas of learning will focus on the identification, derivation and interpretation of economic indicators, like Gross Domestic Product (GDP), Consumer Price Index (CPI) and Human Development Index (HDI).

Examine the notion of economic growth and how it can be measured by indicators, like Gross Domestic Product (GDP) and Gross National Product (GNP). Find out what are the determinants that affect the varying levels of economic growth rates in countries as well as the impacts of economic growth. By recognising the benefits of sustainable economic growth, governments must introduce appropriate macroeconomic policies to pursue this aim.

Learn more about inflation, which refers to the sustained increase in general price level over a period of time, usually in a given year. Inflation rate is typially measured by the Consumer Price Index (CPI). Find out more about different causes of inflation, such as demand-pull inflation and cost-push inflation. Also, examine the positive and negative consequences of inflation on the individuals, firms and economies. By doing so, it will be crucial for governments to implement policies to maintain a low rate of inflation.

Unemployment refers to an economic condition whereby individuals who are willing and able to work but are unable to secure a job. It is usually measured by the unemployment rate, which is a fraction of the unemployment to the total active working population. Identify the causes of unemployment, such as demand-deficient unemployment, structural unemployment and frictional unemployment. Analyse the consequences of unemployment to comprehend why governments seek to achieve a low rate of unemployment.

The aims of government refer to price stability, full employment, sustained economic growth and external equilibrium. Examine different types of macroeconomic policies to find out how governments can pursue these aims. For demand-side policies, areas of learning include monetary policy, fiscal policy and exchange rate policy. For supply-side policies, areas of learning include manpower development, infrastructural development, R&D and trade development policies. Also, analyse the conflicting aims of governments.

Delve into the topic of International Economics by examining the Theory of Comparative Advantage (CA), which is derived from the assessment of opportunity costs incurred due to the focus on production of specific goods and services. CA is used to determine what types of goods and services that countries should specialise in and produce. Also, learn more about the benefits and detriments of free trade that affect developing and developed economies.

Although free trade has been touted by trade economists as a beneficial economic development, not all countries enjoy the benefits of free trade due to limitations, like the absence of infrastructure to support trade as well as the occurence of unemployment due to external competition. As such, countries may impose trade protectionism to insulate their economies from the harmful impacts of trade via measures, like tariffs, quotas and embargoes.

Globalization refers to the economic integration due to freer flow of labour and capital. Assess the benefits and detrimentals of globalization to understand why governments may pursue export-oriented strategies to advance their economic development without being undermined by the adverse effects. Globalization also involves the study of Foreign Direct Investment (FDI), which affects the external equilibrium.

Foreign Exchange involves the study of differences in value of currencies due to the changes in the demand and supply factors that affect the determination of exchange rate values. Learn more about different types of exchange rate systems, like the fixed exchange rate system, flexible exchange rate system and managed float exchange rate system. Examine how changes in exchange rate values affect the balance of payments, which then influences the economic stability of countries in the short run and long run.

Balance of Payment measures the economic transactions between a country and the rest of the world, based on a set of components, namely current account and capital account. Identify the sub-components that affect the current account, like the trade balance, service balance and income balance. Areas of study also include the causes and consequences of balance of payment deficit and surplus. By understanding how external factors can affect the balance of payment for a country, it will be useful to determine how governments can introduce appropriate policy responses to minimise the adverse impacts while reaping the desirable economic impacts, like financial stability.