[MOMI5K]

economic growth disadv- sizes of economies differ, thus harder to compare, benefits of economic growth are usually benefitted by higher end workers....etc...

thanks alot , now back to finishing off this june 2010 paper......then exam in 2 days..........then freeeeeeeeeeeeeeeeeeeedooooooooo ooooooommm

[QwertyG]

(Original post by ryanboi)
12 marks in Unit 2 are easier than in Unit 1. You will always be awarded 4 marks for evaluation and 8 marks for KAA.

Its the way the questions are given which does my head in, in the 30 mark you know the question is going to be on policy conflicts or how X could improve with the use of SSP or MP or FP

[MOMI5K]

(Original post by QwertyG)
Damn this exam man I need 90+ UMS for this sheit, 30 marks questions are actually do able but its those 12 mark questions which do my head in

yeah i agree, 30 marker question are easy to write about cos they can usually be answered in many ways, but 12 mark questions seem to be more narrow and specific, i find it harder to think of answers for them, *sigh*

[ryanboi]

(Original post by QwertyG)
Its the way the questions are given which does my head in, in the 30 mark you know the question is going to be on policy conflicts or how X could improve with the use of SSP or MP or FP

lol I personally think that Unit 2 is easier hehe

[Jamiesonn]

Can somebody explain to me the multiplier effect

[Tyles]

(Original post by Jamiesonn)
Can somebody explain to me the multiplier effect

I don't really know 'the definition' but i remember it as though whenever there is an injection into the circular flow of income, it has a greater than proportionate effect on the overall output. for example the government pumping in 20million leads to 40million as it travels through from firms to households? ish? somebody else help me here

[MOMI5K]

(Original post by Jamiesonn)
Can somebody explain to me the multiplier effect

an initial change in AD can have a greater final impact on equilibrium national income, i.e. the multiplier effect, it comes about because injections of demand into the circular flow of income stimulates further rounds of spending.

basically, if government spend more money, then that directly adds to AD, higher spending= more jobs created and work done, this leads to more people employed---> spending money---> higher consumption, hence an even higher AD---> businesses making more profits and expanding/investing/supplying more--> hiring more worker---> more people spending money/higher consumer disposable income--> higher consumption again---> AD rises further...etc etc....
a multiplying effect.

one effect of aggregate demend may stimulate further rounds of AD going up. this can also apply for the reverse, as in AD falling back if the multiplier effect is working in contraction.

[QwertyG]

What resources are you lot using to revise the unit Anforme book is useless.

[liabhimani]

Could someone please please explain the wealth effect and influences from inflation or economic growth on it please.L!?!?

[ryanboi]

(Original post by liabhimani)
Could someone please please explain the wealth effect and influences from inflation or economic growth on it please.L!?!?

Inflation means that MPC may raise interest rates to fight it. An increase in interest rate means that mortgage interest repayments will increase and so will have a negative wealth effect on UK economy since majority people in the UK owns a mortgage. This will cause consumer confidence to fall and thus lead to fall in consumption, hence a decrease in AD.

Economic growths means that house prices could be increasing. This will have a positive wealth effect as most people have houses as part of their wealth. So increase in house prices will increase people's wealth. Therefore, people will be more confidence and thus spend more.

Evaluation could be that fixed mortgage holder will not be affected by raise in interest rates.

[Jamiesonn]

(Original post by MOMI5K)
an initial change in AD can have a greater final impact on equilibrium national income, i.e. the multiplier effect, it comes about because injections of demand into the circular flow of income stimulates further rounds of spending.

basically, if government spend more money, then that directly adds to AD, higher spending= more jobs created and work done, this leads to more people employed---> spending money---> higher consumption, hence an even higher AD---> businesses making more profits and expanding/investing/supplying more--> hiring more worker---> more people spending money/higher consumer disposable income--> higher consumption again---> AD rises further...etc etc....
a multiplying effect.

one effect of aggregate demend may stimulate further rounds of AD going up. this can also apply for the reverse, as in AD falling back if the multiplier effect is working in contraction.

Thanks

This was posted from The Student Room's Android App on my GT-I9100

[liabhimani]

(Original post by ryanboi)
Inflation means that MPC may raise interest rates to fight it. An increase in interest rate means that mortgage interest repayments will increase and so will have a negative wealth effect on UK economy since majority people in the UK owns a mortgage. This will cause consumer confidence to fall and thus lead to fall in consumption, hence a decrease in AD.

Economic growths means that house prices could be increasing. This will have a positive wealth effect as most people have houses as part of their wealth. So increase in house prices will increase people's wealth. Therefore, people will be more confidence and thus spend more.

Evaluation could be that fixed mortgage holder will not be affected by raise in interest rates.

Thank you so much!!!!!!!

[Jim Riley]

Geoff and the team over on the Economics blog have been hard at work in recent days adding new revision materials to support students taking their Edexcel Unit 2 exam on Friday. Hopefully these will be useful for you - they contain lots of tips on evaluation too.

Unit 2 Macro: Measuring Unemployment in the UK

The Current Account of the Balance of Payments

UK Trade in Services

Migration and the UK Economy

Positive and Negative Multiplier Effects

The Importance of Productivity

Measuring Inflation in the UK

Real Interest Rates

Human Development Index (HDI)

The Output Gap

Government Spending

Macro Revision - Key Statistics on the UK Economy

Interest Rates and the Exchange Rate

Real Disposable Income

Jim

[Jamiesonn]

What are the evaluation points for the multiplier effect? I know one is time lags but what else?

[shaminn]

(Original post by Jamiesonn)
What are the evaluation points for the multiplier effect? I know one is time lags but what else?

With the multiplier effect you could talk about the size of the investment and how large the multiplier might be. You could also mention the size of withdrawals such as the propensity to save rather than continue to spend (this will reduce the effect of the multiplier).

Hope that helps


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

[nakz_]

bump?

[Jamiesonn]

(Original post by shaminn)
With the multiplier effect you could talk about the size of the investment and how large the multiplier might be. You could also mention the size of withdrawals such as the propensity to save rather than continue to spend (this will reduce the effect of the multiplier).

Hope that helps


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

Thanks very much

[Tyles]

(Original post by Jim Riley)
Geoff and the team over on the Economics blog have been hard at work in recent days adding new revision materials to support students taking their Edexcel Unit 2 exam on Friday. Hopefully these will be useful for you - they contain lots of tips on evaluation too.

Unit 2 Macro: Measuring Unemployment in the UK

The Current Account of the Balance of Payments

UK Trade in Services

Migration and the UK Economy

Positive and Negative Multiplier Effects

The Importance of Productivity

Measuring Inflation in the UK

Real Interest Rates

Human Development Index (HDI)

The Output Gap

Government Spending

Macro Revision - Key Statistics on the UK Economy

Interest Rates and the Exchange Rate

Real Disposable Income

Jim

I tip my hat and monocle to you sir, thank you.

[rmay95]

what are the key diagrams bar the standard AD/AS ones?

[Student296]

(Original post by ryanboi)
x

I'm doing this exam but I'm only starting revision today so only 2 days revision. What do you think is the best way to revise so I can at least secure a C grade is it possible for me to get a C seeing as I'm only starting revision now? Thanks