OCR Economics F585 June 2012

For the inflation in the UK one I did a demand and supply diagram to show increased global demand instead of an aggregate supply shift - mind went completely blank! doh

You may get a couple of marks for showing demand pull inflation and explaining it but really we are in a recession and demand is so low that rising raw material prices and food prices are resulting in cost push inflation. However you have to remember that we also do have expansionary monetary policy in the UK with the bank of england base rate at 0.5% and QE and now credit easing which may well be having some sort of demand pull inflationary affect! I talked about both just to be sure that i had covered the points

Reply 1581

queketth

Original post by uxa595

2c.
-ISEW explanation
- Apply VERY briefly to China
- Hard to value measure in ISEW.
-2 people/countries may value a good differenlty, whos right?
- HDI/real GDP more quantifiable. Plus more HDi measures available so better comparions vs other countries.

Also can we really trust China's data on sustainability they can fiddle it so easily due to their political system etc that the reliability of the data should be questioned.

Reply 1582

hanlem

Original post by queketth

You may get a couple of marks for showing demand pull inflation and explaining it but really we are in a recession and demand is so low that rising raw material prices and food prices are resulting in cost push inflation. However you have to remember that we also do have expansionary monetary policy in the UK with the bank of england base rate at 0.5% and QE and now credit easing which may well be having some sort of demand pull inflationary affect! I talked about both just to be sure that i had covered the points

Yeah I explained that it wasn't due to demand pull inflation in the UK because of the recession and spare capacity - but it was external cost push inflation due to the rising cost of commodities which I then said was a result of rising global demand from developing countries and drew the diagram for that

hopefully haven't lost all the marks, i knew it should have been AD/AS but just couldn't think how!

Reply 1583

ray_charlene

9

For the benefits of inflation targeting I wrote a totally different answer (cos I didn't revise for this part)
-provides a direction for central bank/BoE to decide whether a tightened/loosed monetary policy should be used
-acts as one of the factors that investors ie firms and individuals take into a/c of before investing, they can make better judgment

I had no idea why I didn't put things about inflationary expectation, it just didn't come up in my mind at that effing moment
AM I SCREWED IN THIS VERY FIRST QUESTION?

Reply 1584

crookes

Original post by Clare1994

It was looking for the causes of inflation in that one :/ I put wage rises for first thought of putting rise in food prices but didn't in the end so ended up putting worker storages which I realised is just another reason for wage inflation so just gave up in the end...
God dam why didn't I just do rise in the price of food!

This was posted from The Student Room's Android App on my GT-S5570

do you really think so? i did that but i doubt it's right, i did wage prices and energy prices?

Reply 1585

queketth

Original post by hanlem

Yeah I explained that it wasn't due to demand pull inflation in the UK because of the recession and spare capacity - but it was external cost push inflation due to the rising cost of commodities which I then said was a result of rising global demand from developing countries and drew the diagram for that

hopefully haven't lost all the marks, i knew it should have been AD/AS but just couldn't think how!

Sounds like you did just fine!!

Reply 1586

lilipop

The last essay was pretty good as my teacher has done a specimen answer for us for a similar question.

Reply 1587

queketth

Original post by ray_charlene

For the benefits of inflation targeting I wrote a totally different answer (cos I didn't revise for this part)
-provides a direction for central bank/BoE to decide whether a tightened/loosed monetary policy should be used
-acts as one of the factors that investors ie firms and individuals take into a/c of before investing, they can make better judgment

I had no idea why I didn't put things about inflationary expectation, it just didn't come up in my mind at that effing moment
AM I SCREWED IN THIS VERY FIRST QUESTION?

Doesn't sound like it both are valid reasons just because other people here didn't put them doesn't mean that they are wrong and I don't see why those would be, I put your second point and the logic is fine in the first so NO! :smile:

Reply 1588

OnimushaGTA

8

Fair to say, this was the hardest economics paper I had ever done!

This was posted from The Student Room's iPhone/iPad App

Reply 1589

Ryanxclarke

For the divergence question i put:

- inflation mean there is a loss in purchasing power hence real exchange rate will fall whereas nominal does not reflect this
- china has a fixed nominal exchange rate against the US dollar hence will only reflect a depreciation of the dollar whereas real exchange rate will fall through inflation.

Reply 1590

uxa595

21

MY 20 mark Q:

Define protectionism and an embargo.
Explain that there is a resource scarcity problem as demand rising and supply is being depleted/decreasing. Consumption does not account real cost. Production at level where MSC> MSB and MSC=MSB.
China intend to fix this by doing a ban.

Ban = world supply being inelastic.
price goes up, Q down. Less resources used. Sustainable development up.
Also, production costs rise for other countries, fall for China, so China inc their comparative advantage.

Also, Provides incentive for countries to research and dig their own rare metals. In the long long, supply should increase, and bring increase growth and development.

HOWEVER
Many goods made use rare earths. Lower sustainability.
Countries extract more rare earths. economic development fall and increased resource depletion

Eval
Extent depends upon retaliation
Extent depends upon how much rare earths China holds in the ground. In the long run, only policy may be like the EU to find alternatives.

Reply 1591

Mattyb7

http://www.bbc.co.uk/news/science-environment-18508692

Part of the last question on it, I included this in the Essay that other countries will invest to find these raw materials elsewhere.

Reply 1592

CMPUNK

2

grade boundaries in my opinion
E- 21
D-25
C -31
B- 36
A- 41

Reply 1593

kingshan16

So glad I did not revise crazy like all of you on this thread. Tbh honest some of you went really over board. I thought it was hard but I did know the main questions. Anyway I know all of will do good because you are like super ninja crazy psychotic drugs revision people. Good luck.

Reply 1594

cakeonmymind

Original post by CMPUNK

grade boundaries in my opinion
E- 21
D-25
C -31
B- 36
A- 41

An A has never been less than 44 though? Isnt 41 pushing it although i hope youre right

Reply 1595

queketth

Original post by kingshan16

So glad I did not revise crazy like all of you on this thread. Tbh honest some of you went really over board. I thought it was hard but I did know the main questions. Anyway I know all of will do good because you are like super ninja crazy psychotic drugs revision people. Good luck.

Woke up this morning thought the exam was in the afternoon, released at 8.45 it wasn't never cycled so fast in my life bramble cuts all up my arms :frown:

thats what I call dedication and my planned revision time this morning where I was going to START my economics revision got screwed over !!

Reply 1596

ray_charlene

9

Original post by CMPUNK

grade boundaries in my opinion
E- 21
D-25
C -31
B- 36
A- 41

I always want to know how you guys calculate your grade boundaries :colondollar:

Reply 1597

ray_charlene

9

Original post by queketth

Woke up this morning thought the exam was in the afternoon, released at 8.45 it wasn't never cycled so fast in my life bramble cuts all up my arms :frown:

thats what I call dedication and my planned revision time this morning where I was going to START my economics revision got screwed over !!

I can hear your heart beat

Reply 1598

OnimushaGTA

8

This paper was very tricky and required a lot of thought I reckon.

For example, question 1b: many students at my college drew an AD/AS diagram of AD shifting forward and waffled basically (not saying it's wrong) whereas it would have probably been easier to do a standard demand and supply diagram; showing supply decreasing due to taxes (referenced in the extract) -viz increasing the price in the price level.

Thus businesses put their prices up, workers ask for pay rise, don't get it + businesses could make redundancies due to that -leading to spare capacity (negative output gap) + Inflation in the economy!

As much as I want grade boundaries to be low, OCR is not kind enough.