OCR Economics F585 June 2012

That one required me to go and do some research. Here's what I would look at:

"First, the one child policy and the impact of income growth on fertility will see China’s demographic structure rapidly age. Aging of the population will constrain the supply of labour, put pressure on wages, reduce the capacity to save, change industrial structure and the composition of trade, and make building human capital, accelerating technological change and raising productivity more urgent national priorities."

These are not my words, this information was taken directly from http://www.eastasiaforum.org/2010/02/23/the-scale-of-chinas-economic-impact/

Please let me know if this answer is sufficient or if you would like me to discuss in greater depth?

Rising population = GDP per capita will be lower but overall growth will rise

Ageing population = Less disposable income, as wealth will be redistributed
between people in and out labour force. Comes with great social costs.

Migrating workers = overcrowding of cities, need to expand, pollution, food shortage, more labour available, factor mobility.

Thanks, this makes a lot more sense, but I have a question regarding the ageing population bit, why would people be moving in and out of the labour force? - or this is because the older people will be retiring and the younger people going into work?

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.

How would you guys go about answering this question -

Comment on the extent to which rapid economic growth is capable of promoting development.

How would you guys go about answering this question -

Comment on the extent to which rapid economic growth is capable of promoting development.

Could you explain what you mean by this please?

What could be some benefits of the export quota on rare earths to the global economy?

This question is all centered on the fact that Economic growth is necessary for growth but not sufficient. So you need to distinguish between the two, write about the benefits of growth for example rising incomes and how this promotes development. However growth brings about costs which can limit or reduce development depending on what caused the growth. Mineral extraction for example in China will lead to consequences for the environment....Basically to be promote development the growth needs to be sustainable and not lead to a depletion of the natural stock of capital.

Hi, i would really appreciate it if someone could possibly explain fiscal policy credibility?

I know that policy credibility occurs when businesses and consumers believe that a policy is appropriate in a given economic situation and will achieve its objectives, and that examples for fiscal policy would include the setting up of the independent OBR, and in the past Gordon Brown's golden rule, but I don't know what else to put...?

What diagram would be used to illustrate Wages growing at a faster rate than productivity?

and are there any other diagrams any one would recommend?

So far ive got the Market Failure, Economics Growth, Quota (short term + long term), and the diagram to show price volatility in commodity prices such as Raw materials.

What is the difference between nominal and real exchange rate?
I know what they are, but I can not explain what increase in each of them mean..

If there is a rise in nominal value would it mean there is a rise in real exchange rate?

On page 7, extract 2, the nominal rate is lower than real, what does that mean?

What diagram would be used to illustrate Wages growing at a faster rate than productivity?

and are there any other diagrams any one would recommend?

So far ive got the Market Failure, Economics Growth, Quota (short term + long term), and the diagram to show price volatility in commodity prices such as Raw materials.