Global Economics F585 how confident are people with this exam?

I've got both, and the APT one seems a bit better.

The main reason why the fiscal rules were broken is because of the recession. The monetary policy had lost it's ability to effect the state of the economy, due to the liquidity trap it was thought that a expansionary fiscal policy would have more impact in bringing the economy out of a recession. Therefore, the fiscal rules were broken in order to allow extra borrowing in order to help promote growth, through increased spending, not just on capitial projects but on current expeniture. There were also automatic stablisers working in the economy which would have meant there would be increased spending and less revenue to fund it, which would lead to a deficit which was not at the government's discretion. then obviously you would explain the negative effects of the fiscal rules being broken.

so basically i would answer that question by:

1- explaining why other policies have become ineffective eg liquidity trap
2- explain the benefits of the fiscal rules being broken... promotion of growth and stuff and how this would happen
2- how the deficit would have occured without the government playing a part
4 - the negative impact on the economy.

also when mentioning economic terms such as the ones above in bold they need to be explained a bit more then i have and obviously depending on the marks this would need to be in a bit more detail.

the negative effects of the fiscal rules being broken would be-
-oppertunity cost in repaying the interest rates
- unsustaintable deficits occuring, in countries such as spain and greece
- waste occuring in the economy
- the crowding out effect
etc.

What effect might a depreciation have on AD?

start by defining a depreciation... keeping in mind a depreciation happens without governmental control.. its based purely on supply and demand for a currency.

when referring to AD we look at all the components
- consumption
domestic goods would now look more attractive because they look cheaper in comparision to international goods. Therefore, the demand for international goods would fall and the demand for domestic goods would be increased, causing a increase in consumption.
-government spending
not too sure about this one tbh... it may effect it because governments may spend more on UK goods rather then international stuff.. giving an injection into the economy?
-investment there would be an increase flow of fdi because people who exchange their currency will get more sterling (if we're reffering to the UK having a depreciation in the sterling) and this will cause an inflow of investment which would also act as an injection.
- exports would be more price competitive in the international market because they have a advantage of lower value.. for example UK goods are bought in sterling and with sterling being lower in value ireland can buy more UK goods with the euro and they will also be more attractive to them because UK goods look cheaper in comparision with their domestic goods which are priced in euros.
- imports will fall this is because consumers in the UK buy international goods from Europe in Euros and the Euro is stronger relative to the sterling therefore goods from europe will look expensive to UK comsumers which will cause the demand for imports to fall.
then you need a evaluation of what you just said...
but will this really happen.. because a deprication of the sterling may not be relative to the UK's trading partners... for example if the Euro and dollar depricates at the same rate then the sterling will not be internationally competitve to Europe and the US. Also with other countries that manipulate their currency the depciation may not have such a big impact as have first thought. then you could refer to the case of China who devalues their currency in order to make Chinese goods more price competitive.
another evaluative point is that all of the UK's main trading partners are facing a recession too which would also cause the impact of the deprication to be less then first thought.

^^^^^ this is PERSONALLY the way i would answer the questions, im not a teacher so i dont know if this is all right, i hope it is and that it's helpful... but please feel free to correct me if im wrong about any of the above (apart from my spelling LOL) and please do it in a nice way not a mean way lol

ahh dis is all pretty sick...ur Guuud... also try n remember dat wen ur talkin bout increasin demand for domestic goods, reducing import expenditure ect n increasing government spending.. they are tryin to look to achieve the benefits arising from the multiplier effect
and therefore hopefully the accelerator effect will also take place if there is a change in national output

also in dis specification u get marks for showin current knowledge so u cud add that in the recent global crises the polish zloty depreciated and this gave them a boost to AD & their economy and they were able to take advantage of the multiplier effects and record a 0.1 % growth in there economy in the years of the recession whilst other countries recorded negative figures

btw what did u mean by opportunity cost of interest rates as a neg of fiscal policy being broken..dnt understand dis atm

again thanks for all wat u wrote above...i have a feeling this similiar depreciation question cud cum up

has anyone sent it to you yet...if not lemme kno n i'll send it..

same goes to u MCyan

has anyone sent it to you yet...if not lemme kno n i'll send it..

same goes to u MCyan

can i just ask has everyone whose got a toolkit paid for them? I know atp are very good because we use them in other subjects but just wondering if this one is worth spending the money on cos it seems a lot?
Thanks

Guys, regarding big topic such as sustainability, what specifically question would you think will come up? Like sustainability linking to developed/developing countries?

most of the sustainability stuff seems to be linked to economic growth and the impact on the environment. This is an a quote from the extract:

The major achievement under the UN Framework was the signing of the Kyoto Protocol in 1997. This protocol set binding targets for the carbon dioxide emissions of the major developed economies and established an important principle with respect to developing economies. This principle was that developing economies would face a lower burden in reducing emissions than developed countries.

so obviously you need to look at developing and developed countries in a different way when looking at their growth nad the environmental impact and you need to have knowledge about the Kyoto protocall.

according the the tutor2u you toolkit:

There are many market failures connected to the climate change debate – these include:

• Externalities specifically greenhouse gas externalities and other emissions contributing to global warming
• Missing markets for scarce environmental resources leading to the tragedy of the commons
• Other public goods issues with the environment including the free-rider problem from those countries that opt to allocate resources towards cutting emissions
• Information asymmetries and other forms of information failure including information gaps among consumers about the consequences of their consumption decisions for the environment
• The impact of climate change and other environmental problems on the distribution of income and wealth within and between countries

know about the problems facing developing countries, is there a shortage of funds? can developed countries help them out
also know about the carbon trading scheme, regulations, carbon taxation, subsidies.

Then theres a BIGGG BIT ABOUT CHINA obviously you need a lot of knowledge about china as a contributer to co2 emissions.

Hmm i dnoo how much help ive been, but i hate this topic, its very boring... and i need to learn a lot more about it. Good luck with the revision. A toolkit would deffo help out with this!

Thank you for your reply. Yeah, definitely mention China! Wish I had a toolkit too.

When are you sitting this exam? if you sitting when i am- in 2 weeks exactly, theres no point buying a toolkit not the tutor2u one anyway cause it takes about two weeks to come. I can send you it if you want though...

Oh gosh i didnt realise it would take that long, that would be fantastic if you could send it me though

okay just private message me with your email and ill attach it there

send me your email and ill e-mail you the tutor2u you one if you want

Oh gosh i didnt realise it would take that long, that would be fantastic if you could send it me though