OCR Economics F585 June 2012
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Original post by chunkyjooj
My annotated pre-release extract to match the YouTube videos.
I will be posting my summary of the examiners reports findings soon too.
Hope you guys are appreciating this, working hard to get my class and the rest of you a good grade on this. Do some damage!
I will be posting my summary of the examiners reports findings soon too.
Hope you guys are appreciating this, working hard to get my class and the rest of you a good grade on this. Do some damage!
Thankyou!
I've put together a list of key points based on examiner reports. Some strong direction in this document.
Original post by chunkyjooj
I've put together a list of key points based on examiner reports. Some strong direction in this document.
You are awesome
. Thanks!!!!Original post by chunkyjooj
I've put together a list of key points based on examiner reports. Some strong direction in this document.
Hi, i see on your channel on youtube you included videos related to extracts 1 and 2. Do you have any for 3 and 4 by any chance?
Your videos seem really nice too. I've just gone over the extract 1 video so far and noticed 1 point that i hadn't earlier
Can someone explain the Monetary Transmission Mechanism, i can draw it, but how are you meant to analyse it?
Original post by uxa595
Hi, i see on your channel on youtube you included videos related to extracts 1 and 2. Do you have any for 3 and 4 by any chance?
Your videos seem really nice too. I've just gone over the extract 1 video so far and noticed 1 point that i hadn't earlier
Your videos seem really nice too. I've just gone over the extract 1 video so far and noticed 1 point that i hadn't earlier
Extract 4 http://www.youtube.com/watch?v=ZQVrDZg_h-0
Extract 3 http://www.youtube.com/watch?v=YAXDt7OIAms
Now go and get an 'A'.
Original post by farrukhkhan01
Can someone explain the Monetary Transmission Mechanism, i can draw it, but how are you meant to analyse it?
You should be able to explain how one action leads to another. If the interest rate increase, returns are more attractive to foreign investors, therefore bank deposits increase and drive up the value of our currency. This will cause the exchange rate to rise, allowing us to buy more foreign currency at a cheaper rate.
That's just the analysis of the impact on the exchange rate. You need to analyse the impact on the price of assets, the price level, consumption and investment (at the very least).
I've made notes on the spec, but without past papers... how do I test myself about the knowledge????
Original post by chunkyjooj
Extract 4 http://www.youtube.com/watch?v=ZQVrDZg_h-0
Extract 3 http://www.youtube.com/watch?v=YAXDt7OIAms
Now go and get an 'A'.
Extract 3 http://www.youtube.com/watch?v=YAXDt7OIAms
Now go and get an 'A'.
I was looking at your extract one video and i see in the first paragraph, you said we just need to understand how interest rates work and the transmission mechanism.
However, looking at it, doesn't it relate quite a bit to types of inflation. If the UK was suffering demand pull inflation, you can raise rates. If the UK has low growth, you don't have to worry about inflation and you focus on increasing growth. Basically, it's showing how for many years, we didn't get much cost push inflation due to consistant oil/food and other prices.
That's just my view on it, not sure it's it's correct as i haven't done any work on this with a teacher.
I've noted from the OCR book (not the best source of revision though) and have also highlighted key points/definitions in the APT/Tutor2U guide as well.
After looking at one of the past papers (where the 20 marker was based on the last extract - could be the same here?) I found it extremely helpful in terms of what to write for comment questions.
For example, small things such as making sure you say if price of exports falls, they come relatively cheaper compared to other countries. Also, it's important to say However, it depends upon....
Thinking short term/long term, considering other points (even if the question may not specifically ask for it), elasticities, time taken for impact etc. will gain us higher marks. I urge you guys to also look at these mark schemes from previous years - very helpful!
I'm stuck at what to do now. So, like unit 3 I'm going to do 4 separate mind maps (one for each extract) and list key points/topics that I need to now and then go from there.
P.S. thanks chunkyjooj you're a great help and I only wish my teachers were as helpful as you!
After looking at one of the past papers (where the 20 marker was based on the last extract - could be the same here?) I found it extremely helpful in terms of what to write for comment questions.
For example, small things such as making sure you say if price of exports falls, they come relatively cheaper compared to other countries. Also, it's important to say However, it depends upon....
Thinking short term/long term, considering other points (even if the question may not specifically ask for it), elasticities, time taken for impact etc. will gain us higher marks. I urge you guys to also look at these mark schemes from previous years - very helpful!
I'm stuck at what to do now. So, like unit 3 I'm going to do 4 separate mind maps (one for each extract) and list key points/topics that I need to now and then go from there.
P.S. thanks chunkyjooj you're a great help and I only wish my teachers were as helpful as you!
Original post by Pritesh.Mistry
I've noted from the OCR book (not the best source of revision though) and have also highlighted key points/definitions in the APT/Tutor2U guide as well.
After looking at one of the past papers (where the 20 marker was based on the last extract - could be the same here?) I found it extremely helpful in terms of what to write for comment questions.
For example, small things such as making sure you say if price of exports falls, they come relatively cheaper compared to other countries. Also, it's important to say However, it depends upon....
Thinking short term/long term, considering other points (even if the question may not specifically ask for it), elasticities, time taken for impact etc. will gain us higher marks. I urge you guys to also look at these mark schemes from previous years - very helpful!
I'm stuck at what to do now. So, like unit 3 I'm going to do 4 separate mind maps (one for each extract) and list key points/topics that I need to now and then go from there.
P.S. thanks chunkyjooj you're a great help and I only wish my teachers were as helpful as you!
After looking at one of the past papers (where the 20 marker was based on the last extract - could be the same here?) I found it extremely helpful in terms of what to write for comment questions.
For example, small things such as making sure you say if price of exports falls, they come relatively cheaper compared to other countries. Also, it's important to say However, it depends upon....
Thinking short term/long term, considering other points (even if the question may not specifically ask for it), elasticities, time taken for impact etc. will gain us higher marks. I urge you guys to also look at these mark schemes from previous years - very helpful!
I'm stuck at what to do now. So, like unit 3 I'm going to do 4 separate mind maps (one for each extract) and list key points/topics that I need to now and then go from there.
P.S. thanks chunkyjooj you're a great help and I only wish my teachers were as helpful as you!
You might want to check out the WEESTEPS by tutor2u for that kind of technique.
What most surpises me about Chunkyjooj's notes though is that saying However and it depends isn't enough for full marks. What else can you put after those?
Original post by Placebo101
You might want to check out the WEESTEPS by tutor2u for that kind of technique.
What most surpises me about Chunkyjooj's notes though is that saying However and it depends isn't enough for full marks. What else can you put after those?
What most surpises me about Chunkyjooj's notes though is that saying However and it depends isn't enough for full marks. What else can you put after those?
I was asked to submit this in the forum, so here it is:
Summary of key information pulled from Examiner’s reports:
• Be sure to use your time wisely and efficiently
• Students should examine and analyse the data given in the pre-release stimulus as there is bound to be a question asking them to analyse the information it presents
• Explicitly differentiate between GROWTH AND DEVELOPMENT! I make this point loud and clear because this will be a costly mistake on this upcoming June 2012 exam
• You are not required to know anything further than what has been listed in the stimulus. Additional research is helpful but not necessary to gain full marks.
• Comment and Discuss questions aim to address the ‘stretch and challenge’ requirement of the specification. Stretch and challenge questions have been placed in the textbook, get familiar with their style of questioning.
• Analysis and evaluation guidance can be provided by the specification. Focus on the section that dictates what ‘Candidates should be able to’.
• Definitions should be memorised, regardless of what the stimulus indicates.
• Explain all diagrams, drawing them in is simply not enough. This has been a common issue in past exams. Students seem to be under the impression that drawing a diagram automatically earns them marks.
• Commentary must be informed, not left at ‘however’ or simple ‘this depends upon’ statements. They must be explained thoroughly.
• Make as many possible connections as possible to the stimulus.
• Signpost your writing, let the examiner know you have a set structure and plan.
Original post by uxa595
I was looking at your extract one video and i see in the first paragraph, you said we just need to understand how interest rates work and the transmission mechanism.
However, looking at it, doesn't it relate quite a bit to types of inflation. If the UK was suffering demand pull inflation, you can raise rates. If the UK has low growth, you don't have to worry about inflation and you focus on increasing growth. Basically, it's showing how for many years, we didn't get much cost push inflation due to consistant oil/food and other prices.
That's just my view on it, not sure it's it's correct as i haven't done any work on this with a teacher.
However, looking at it, doesn't it relate quite a bit to types of inflation. If the UK was suffering demand pull inflation, you can raise rates. If the UK has low growth, you don't have to worry about inflation and you focus on increasing growth. Basically, it's showing how for many years, we didn't get much cost push inflation due to consistant oil/food and other prices.
That's just my view on it, not sure it's it's correct as i haven't done any work on this with a teacher.
Well, if you understand the transmission mechanism - then you understand the relationship between the interest rate and demand pull inflation. However, you'll understand it from multiple angles.
Yes, with rising cost-push inflation we have little ability to influence inflation with the IR as it addresses AD primarily.
Any discussion of the transmission mechanism is inherently linked to a discussion on inflation. Your analysis of cost push inflation is spot on, nice work.
Original post by Placebo101
You might want to check out the WEESTEPS by tutor2u for that kind of technique.
What most surpises me about Chunkyjooj's notes though is that saying However and it depends isn't enough for full marks. What else can you put after those?
What most surpises me about Chunkyjooj's notes though is that saying However and it depends isn't enough for full marks. What else can you put after those?
I've read the reports, and it's a bit more clear with what they mean. Statements on their own will gain no marks, but if the points are developed they will.
Original post by chunkyjooj
I've put together a list of key points based on examiner reports. Some strong direction in this document.
Will you marry me?
haha - thanks soo much, thumbs'd up all your youtube vids too mann
Original post by chunkyjooj
Well, if you understand the transmission mechanism - then you understand the relationship between the interest rate and demand pull inflation. However, you'll understand it from multiple angles.
Yes, with rising cost-push inflation we have little ability to influence inflation with the IR as it addresses AD primarily.
Any discussion of the transmission mechanism is inherently linked to a discussion on inflation. Your analysis of cost push inflation is spot on, nice work.
Yes, with rising cost-push inflation we have little ability to influence inflation with the IR as it addresses AD primarily.
Any discussion of the transmission mechanism is inherently linked to a discussion on inflation. Your analysis of cost push inflation is spot on, nice work.
What do you think the last question is going to be?
What is the monetary transmission mechanism?!?!
Original post by K.a
What do you think the last question is going to be?
I really don't like to answer questions like this, simply because some students will potentially rely on it as a fact - when it's absolutely not. DO NOT SIMPLY use this as your only preparation for the final essay!
Discuss the view that market based approaches are the best approach to correcting the market failure resulting from resource scarcity, such as that of the rare earths in China. (20 marks) ---> Or some variation of this question asking whether market based approaches by the EU are more effective in addressing the global resource scarcity issue than the quotas imposed by China.
There's tons of scope in this question to discuss the core economic issue of scarcity in the context of China and the EU.
I'm happy to check through a plan for this if someone posts. Also, any other ideas for helpful videos for this exam?
Go get 'em.
Original post by chunkyjooj
I really don't like to answer questions like this, simply because some students will potentially rely on it as a fact - when it's absolutely not. DO NOT SIMPLY use this as your only preparation for the final essay!
Discuss the view that market based approaches are the best approach to correcting the market failure resulting from resource scarcity, such as that of the rare earths in China. (20 marks) ---> Or some variation of this question asking whether market based approaches by the EU are more effective in addressing the global resource scarcity issue than the quotas imposed by China.
There's tons of scope in this question to discuss the core economic issue of scarcity in the context of China and the EU.
I'm happy to check through a plan for this if someone posts. Also, any other ideas for helpful videos for this exam?
Go get 'em.
Discuss the view that market based approaches are the best approach to correcting the market failure resulting from resource scarcity, such as that of the rare earths in China. (20 marks) ---> Or some variation of this question asking whether market based approaches by the EU are more effective in addressing the global resource scarcity issue than the quotas imposed by China.
There's tons of scope in this question to discuss the core economic issue of scarcity in the context of China and the EU.
I'm happy to check through a plan for this if someone posts. Also, any other ideas for helpful videos for this exam?
Go get 'em.
I'd agree that this is a great point to pick up on in any essays on quotas, sustainability, etc. It may seem as if you're going back to basics, discussing the economic problem, but it's very relevant.
Original post by Sophia1994
What is the monetary transmission mechanism?!?!
In my opinion, from what I have read from the text book and my knowledge:
The MTM is basically the process of how changes in the interest rate, set by the central bank e.g. (BoE, Federal Reserve or the peoples bank of China) affect the rate of inflation. The key word here is transmission. It is really referring to the stages in between changes in the base rate to the overall affect on inflation.
For example,
If the central bank raises the base rate of interest. The commercial banks also raise the rate of interest, therefore, the cost of borrowing for a consumer or business has increased. But at the same time, the return on savings has increased. This increases the 'APS: Average propensity to save' since higher interests rates are seen as attractive to people who have choice over their spending/saving. If more people save, more money is in banks, and less money is being spent on goods on services. This means there must be a reduction consumer expenditure, which is a key part of aggregate demand in the UK.
However, higher UK interest rates raise the relative interest rate to that from other countries in the EU/World. This attracts money from foreign savers and speculators, this creates hot money flows into UK financial institutions due to the higher return on their savings/investments. To put your money in UK banks however, you must use the UK currency: Sterling. To do this, foreigners exchange their currency for the Sterling. This increases the demand for Sterling and from a simple demand and supply diagram, you will be able to see that the value of the Sterling has risen from P to P1. A stronger currency will mean that the price of exports sold will be dearer (more expensive), as foreign businesses and consumers must now pay more of their currency for our currency. And our imports will be cheaper as we supply less sterling for the same amount of foreign goods and services.
Overall, this would mean a fall in net external demand (Exports down, Imports up) = more money leaving the circular flow of income as leakages. As you are aware, net exports is a component of aggregate demand. If we consider the affects of a rise in interest rates on domestic demand and net external demand we can see that aggregate demand has fallen. Investment is also lower due to a lower accounting rate of return on any investment financed through borrowing.
Therefore (C is down, I is down, Gsameish, + (Xdown - M up) = AD down.
The affects on inflation from a fall in aggregate demand is usually a reduction in inflation. The severity of the affect on inflation will be determined by the size of the change in the interest rate, the speed at which the commercial banks alter their rates, the speed at which consumers and business react to these changes (e.g. determined by confidence/expectations) and the current position of AD on the LRAS. What I mean is, where the economy is producing in terms of its productive potential capacity, or its output gap.
This is my interpretation at least. Feel free to add anything you think is needed, or I should of included. I have done no revision so this is just from memory from last year. Hope it helped. x
It's also about how it affects economic growth, forget to mention that, but I don't think I need to explain this to you smart people
(edited 11 years ago)
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