[don'tTRIP.]

(Original post by K.a)
Comment on the effectiveness of fiscal policy, such as that in the UK, to promote economic stability. (10)

Define - fiscal policy and economic stability

The govt has planned to cut spending in the UK. This means that govts do not have to borrow. This increases the amount of finance available for the private sector investment so the private sector is not crowded out by the govt, therefore, private sector investment increases. This aims to increase the economy's long term rate of economic growth. Also, this tends to push down the interest rate, so lower levels of interest will contribute to higher levels of private sector investment by lowering its cost. This therefore promotes economic stability.

- is the answer correct??

And also what evaluation points could you make??

There are several factors which can determine the effectiveness of FP.
1. Time lags may exist so as, it can take a govt. a year or so simply to identify where and how much fiscal change is needed. Thus it takes time for FP to work.
2. FP can be affected by political decisions rather than economic needs; for instance Gordon Brown was tempted to keep govt. spending high in the boom years and so failed to keep the golden rule. FP is much more effective if economic myopia is eradicated.
3. Size of FP is very difficult to determine = govt. failure, waste of already scarce resources etc.
4. Effectiveness depends on whether it crowds out the private sector; meaning the state takes more of the nation's resources. This can be a good thing, but might be wasteful. Perhaps we should be attempting to crowd in the private sector so, resources are reallocated to where they are much more productively and allocatively efficient.

Hope this helped

EDIT: BTW, your answer seems a bit thin; perhaps discuss the advantages of FP i.e. unlike MP, it's not dependent upon confidence and can be directed to maximise effectiveness.

[mehakvig92]

hi has anyone got any possible questions that might come up???

[uxa595]

This paper is a mother****er.

[patra]

Hey..can someone please explain the washington consensus and the role of the OECD/IMF/WB? That would be really helpful! thanks in advance! ;D xx

[mehakvig92]

washintong consensus are basically something that free market economics come up with
its a strong consensus amongst developed countries to eliminate government internverntion because they feel that the government always fails and to allow the market to function on its own..

there are three main parts to washintong consensus
1. price stability
2. trade liberliastion
3. macroeconomic stability

hope thats ok

and alsoooo have u got any questions that your teacher might have given youu?

[Executioner]

There is an exam paper made by ZigZag Education:

1.
(a) Distinguish between the structural and cyclical nature of public spending deficits. (4)
(b) Using an AD and AS diagram, show how a fall in consumer confidence would lead to a fall in national output. (6)
(c) Comment on the extent to which reduced government borrowing is needed in the UK. (10)

2.
(a) Explain the functions of the Confederation of British Industry. (4)
(b) Analyse benefits of improved literacy rates to countries such as India. (6)
(c) Comment on the potential problems that LEDCs such as India could face when encouraging multinational companies (MNCs) to invest in their country. (10)

3. Discuss the extent to which artificially reducing the value of the dollar would benefit the US economy. (20)




I have the mark scheme for these questions, if anyone is interested I'll post them

[CharrrrxD]

(Original post by Executioner)
There is an exam paper made by ZigZag Education:

1.
(a) Distinguish between the structural and cyclical nature of public spending deficits. (4)
(b) Using an AD and AS diagram, show how a fall in consumer confidence would lead to a fall in national output. (6)
(c) Comment on the extent to which reduced government borrowing is needed in the UK. (10)

2.
(a) Explain the functions of the Confederation of British Industry. (4)
(b) Analyse benefits of improved literacy rates to countries such as India. (6)
(c) Comment on the potential problems that LEDCs such as India could face when encouraging multinational companies (MNCs) to invest in their country. (10)

3. Discuss the extent to which artificially reducing the value of the dollar would benefit the US economy. (20)




I have the mark scheme for these questions, if anyone is interested I'll post them

Can you post it please?

[Executioner]

(Original post by CharrrrxD)
Can you post it please?

Hey, here's the Mark Scheme, it was too long to type up so I photocopied it

[-Illmatic-]

what on earth is the Confederation of British Industry?!

[Executioner]

(Original post by -Illmatic-)
what on earth is the Confederation of British Industry?!

It mentions it in Extract 1.
And I have no idea what it is

[-Illmatic-]

(Original post by Executioner)
It mentions it in Extract 1.
And I have no idea what it is

I very much doubt they'd directly test on that. Considering there is nothing on the spec about it!

[CharrrrxD]

(Original post by -Illmatic-)
what on earth is the Confederation of British Industry?!

I think its just a company who does business confidence surveys - maybe I'm wrong but I dont think they would test it anyway

[CharrrrxD]

(Original post by Executioner)
Hey, here's the Mark Scheme, it was too long to type up so I photocopied it

thank you so much
much apprieciated!

[-Illmatic-]

(Original post by CharrrrxD)
I think its just a company who does business confidence surveys - maybe I'm wrong but I dont think they would test it anyway

Ah okay, cool

[Executioner]

Some questions to answer from each extract from the tutor2u toolkit

Extract 1: UK investment and public finances
1. “The Treasury estimated that as much as two thirds of the UK’s deficit was ‘structural’” Analyse the likely causes of a structural budget deficit
2. Analyse how recession in the UK economy has led to a rise in the budget deficit
3. Analyse the ways in which a change in business confidence can affect capital investment
4. Comment on the factors that affect total government spending on debt interest from one year to another
5. Define what is meant by automatic stabilizers
6. Define what is meant by a budget deficit
7. Define what is meant by an economic recession
8. Define what is meant by capital investment
9. Define what is meant by discretionary cuts in government spending
10. Define what is meant by the sustainable investment rule
11. Distinguish between a cyclical and a structural budget deficit
12. To what extent would you expect a time lag between changes in GDP and changes in gross fixed capital formation?
13. Using Figure 1.1 describe the changes in real GDP and investment over the period shown in the data
14. Figure 1.1 shows that business capital spending fell sharply in 2008-09. Explain two possible reasons for this

Extract 2: The UK budget deficit reduction plan
1. Analyse how “temporary losses in output may become structural and permanent.’”
2. Analyse some of the economic consequences of a period of price deflation
3. Analyse the causes of long-term unemployment in the UK labour market
4. Analyse the factors that affect the value of the national income multiplier
5. Analyse the impact that increased capital investment can have on (i) economic growth and (ii) the rate of unemployment
6. Analyse the possible causes of price deflation in the UK economy
7. Attempts to cut budget deficits and government debt in the early stages of a recovery may damage a country’s long-run economic performance. Discuss
8. Comment on the effectiveness of fiscal stimulus policies in helping to reduce the depth of the recession in the UK economy
9. Comment on the limitations of a policy of the Bank of England keeping interest rates low as a way of helping the EU economy during a recession
10. Comment on the meaning of the term “excess capacity” and explain how it might be measured in an economy such as the UK
11. Comment on the policies that are likely to be most effective in reducing long-term unemployment
12. Define what is meant by a ‘double-dip’ recession
13. Define what is meant by deficient demand
14. Define what is meant by economic stability
15. Define what is meant by fiscal credibility
16. Define what is meant by purchasing power
17. Define what is meant by quantitative easing
18. Define what is meant by the national income multiplier
19. Distinguish between inflation and deflation
20. Distinguish between quantitative easing and credit easing
21. Distinguish between nominal and real interest rates
22. Distinguish between base interest rates and the rate of interest on bonds
23. Distinguish between the fiscal deficit and the national debt
24. Evaluate the case for and against the Bank of England directly funding an increase in the government budget deficit
25. Explain how quantitative easing is designed to boost demand in an economy
26. Explain the aims of a period of fiscal austerity
27. Explain the main roles of the International Monetary Fund (IMF)
28. Explain the roles of the Bank of England
29. Explain what is meant by long-term unemployment
30. To what extent might the multiplier effects of a cut in government spending differ from the multiplier effects of an equivalent rise in taxation?
31. UK investment levels have fallen during the recession. Evaluate the policies that might lead to a higher level of capital investment in the UK economy
32. Using an aggregate demand and supply diagram, analyse the likely effects of cuts in government spending
33. Using an aggregate demand and supply diagram, analyse the likely effects of temporary cuts in taxation

Extract 3: UK Overseas Aid
1. Analyse the constraints on growth and development for poorer developing countries
2. Analyse the policies that might be used to increase investment in low carbon industries
3. Distinguish between aid and foreign investment and give an example of each
4. Distinguish between economic growth and economic development
5. Evaluate the argument that the UK should no longer provide development assistance to the India economy and reallocate this aid funding to other countries
6. Aid is more important than trade to sustaining economic development? Do you agree?
7. Explain two different types of development aid
8. Define what is meant by low carbon growth
9. Define what is meant by the Human Development Index
10. Explain what the Millennium Development Goals are
11. To what extent is a move towards free trade more important in promoting growth and development than higher levels of overseas aid?
12. To what extent is an increase in overseas aid assistance a necessary but insufficient condition for an increase in economic growth in some of the world’s poorest countries?
13. Using an aggregate demand and supply diagram, analyse the likely effects of an increase in official development assistance for a country such as Ethiopia or Tanzania
14. Using the data in Figure 3.2, comment on the extent to which a higher per capita income can lead to a higher score for the HDI

Extract 4: Future of Economic Growth and Development in India
1. “India has dramatically reduced import tariffs and become more open to international trade.” With the help of a diagram analyse the economic effects of reducing import tariffs and opening up an economy to trade
2. “Neither economic growth nor development is guaranteed in India.” Discuss the extent to which India will continue to achieve high economic growth rates
3. Analyse how a business is able to produce a laptop for the India market costing $35
4. Analyse the reasons behind the rapid growth of India’s workforce
5. Apart from an expanding workforce what other supply-side factors that influence trend economic growth?
6. Comment on the extent to which malnutrition in India is a constraint on her economic growth and development
7. Comment on the importance of a rise in adult literacy rates for India’s economic performance
8. Define what is meant by comparative advantage
9. Define what is meant by infrastructure
10. Define what is meant by per capita GDP
11. Define what is meant by state-directed economic growth
12. Define what is meant by Washington Consensus
13. Distinguish between economic growth and aggregate demand
14. Distinguish between market liberalization and privatization
15. Explain how partnerships with institutes of Technology and Science can help firms supplying the Indian domestic market
16. To what extent do the benefits of high growth rates in India outweigh the economic and social costs?
17. Using an aggregate demand and supply diagram, analysis some of the likely effects of a rise in infrastructure spending in the Indian economy
18. What are the main risks to sustained economic growth in the Indian economy?
19. Analyse how an Indian business can manufacture a laptop for $35
20. Analyse the economic effects of the Indian government subsidising mobile phones and cheap laptops for millions of Indian students

Extract 5: Imbalances in the global economy
1. “High domestic consumption and low savings … has been root causes of global trade and balance of payments imbalances.” Do you agree?
2. Analyse some of the causes of a currency appreciation such as the Brazilian Real
3. Analyse some of the causes of the rise in foreign currency reserves in China
4. Analyse the ways in which quantitative easing by central banks in developed countries can lead to rising malnutrition rates in poorer developing nations
5. Comment on the extent to which a depreciation of the US dollar will serve to improve the current account of their balance of payments
6. Comment on the view that persistent trade imbalances will threaten prospects for further globalisation
7. Distinguish between a trade surplus and a current account surplus
8. Evaluate the view that the stability of the global economy would be best served if more countries allowed their currencies to float freely
9. Define what is meant by “loose monetary policy”
10. Define what is meant by a “currency war”
11. Define what is meant by a “trade war”
12. Define what is meant by a current account surplus
13. Define what is meant by an appreciation of a currency such as the Chinese renminbi (Yuan)
14. Define what is meant by purchasing power parity
15. How far do you agree with the view that large global trade imbalances threaten the stability of the world economy?
16. Discuss the likely consequences for the world economy of developed countries introducing protectionist measures in response to alleged currency manipulation by developing countries
17. To what extent will an appreciation of the Yuan help to reduce the size of China’s trade surplus with the United States and with the European Union?
18. Using a diagram, analyse the effects of the Chinese government intervening in the foreign exchange market to keep the value of their currency lower against the US dollar
19. Discuss the benefits and costs of a competitive devaluation of the US dollar against currencies such as the Chinese Yuan

[Dave11]

Is it OK to use the tutor2u toolkit as a sole revision source? Would appreciate any opinions

[Executioner]

(Original post by Dave11)
Is it OK to use the tutor2u toolkit as a sole revision source? Would appreciate any opinions

I am using the ZigZag Education Kit, ATP resource and tutor2u toolkit. So I got a lot to go through. All these 3 are really helpful for the exam next week.

I am only counting on them, I'm not going to use anything else

Here's ZigZag Education's sample document, they cover the rest up but I have the full version http://zigzageducation.co.uk/samplep...mics/s4495.pdf

[CharrrrxD]

(Original post by Executioner)
I am using the ZigZag Education Kit, ATP resource and tutor2u toolkit. So I got a lot to go through. All these 3 are really helpful for the exam next week.

I am only counting on them, I'm not going to use anything else

Here's ZigZag Education's sample document, they cover the rest up but I have the full version http://zigzageducation.co.uk/samplep...mics/s4495.pdf

Would you be able to send me the ATP resource or tell me where to get it from please? thanks

[Executioner]

(Original post by CharrrrxD)
Would you be able to send me the ATP resource or tell me where to get it from please? thanks

Yeah sure

Here it is: F585 Jan 12.pdf

[CharrrrxD]

(Original post by Executioner)
Yeah sure

Here it is: F585 Jan 12.pdf

thank you so much!
I tried to +1 but it said I can't because I gave you one earlier!
Appreciate it so much!