Mastering Edexcel Economics Theme 2

Theme 2 of Edexcel Economics is where students lose marks. They treat it

like isolated facts. This theme feeds into Paper 1 Section B. Understanding it transforms

your exam performance. The UK economy is a massive organism. Every decision creates

ripples across the system. Interest rate changes impact exchange rates, spending,

investment, and employment levels simultaneously. Aggregate demand is a shopping cart

filled by consumers, businesses, government, and foreign buyers. Remove one contribution

and the cart tips. The Phillips Curve shows this perfectly. In the 70s,

stagflation shattered old assumptions. COVID proved it again: inflation surged with