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Revision/Discussion Thread Edexcel Economics Unit 2 Friday 25th of May 2012

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    (Original post by ryanboi)
    Is very hard. What you can do is, do at least 4 past papers (4 questions), find out what you don't understand from those 4 papers. Revise that. Then read through all the examiner reports and memorise facts that you don't feel confidence about. If you still have some time, pick on your weaknesses. If you are bad at 30 markers, do as many of that as possible.
    (Original post by Tyles)
    you can easily get an A in this unit with not much revision, as long as you can wrap your head around main concepts and ideas. can follow a case study, you should be fine.
    Thanks guys and good luck with your exam.
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    (AQA Macro) Just wondering what sort of questions/topics usually come up.. so i can revise a particular area more..

    I know in Micro there was always one about market failure etc..

    So just wondering what its like in Macro..

    Also, how would you go about answering the 25 marker..
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    Definition of the current account of balance of payments?
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    hm, i dont know what's in this unit
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    (Original post by Jamiesonn)
    Definition of the current account of balance of payments?
    Current account of the balance of payments — a record of a country’s trade of exports, imports, investment income and current transfers with the rest of the world.
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    (Original post by Student296)
    Current account of the balance of payments — a record of a country’s trade of exports, imports, investment income and current transfers with the rest of the world.
    Yeah, that's what I was going to say

    Does anyone think we should go over the formulas for certain things because in the past, question like that have come up?
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    (Original post by shaminn)
    Yeah, that's what I was going to say

    Does anyone think we should go over the formulas for certain things because in the past, question like that have come up?
    Formulas? I done all the past papers and i never seen one question that require formulas. The one that require some maths was about exchange rate.
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    (Original post by ryanboi)
    Formulas? I done all the past papers and i never seen one question that require formulas. The one that require some maths was about exchange rate.
    Yeah, that's pretty much what I meant. Sorry I didn't make that clear. What do you think the main things we need to know are?

    Also, I have a quick question - with Monetary policies, I know you have the use of Interest Rates, but what else qualifies in this sections?

    It's annoying because I find that some policies work for both AS and AD.
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    Hopefully I can get 100, anyone got any tips? It's not like unit 1 where you can just memorise
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    (Original post by shaminn)
    Yeah, that's pretty much what I meant. Sorry I didn't make that clear. What do you think the main things we need to know are?

    Also, I have a quick question - with Monetary policies, I know you have the use of Interest Rates, but what else qualifies in this sections?

    It's annoying because I find that some policies work for both AS and AD.
    Ermm, make sure you are very confident with policies and objectives. Like how they help reach economic growths and conflicts between them. They could be the 30 marks question.

    Quantitative easing is another thing that monetary policies controls. However, in AS Unit 2, you only need to know about the interest rate. You need to understand the role of MPC and how different factors influence the decisions made on interest rate. You need to know the magnitude of the effects of the policies.

    Yes, the one I can think of is tax. Tax is fiscal policy but it can also be supply side policies. You might not agree to this but my thinking is that income tax will affect the demand side more and corporation tax, the supply side more. Obviously, two types of tax overlaps demand and supply side.
    Which other policies did you find that work for both AS and AD?
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    (Original post by ryanboi)
    Ermm, make sure you are very confident with policies and objectives. Like how they help reach economic growths and conflicts between them. They could be the 30 marks question.

    Quantitative easing is another thing that monetary policies controls. However, in AS Unit 2, you only need to know about the interest rate. You need to understand the role of MPC and how different factors influence the decisions made on interest rate. You need to know the magnitude of the effects of the policies.

    Yes, the one I can think of is tax. Tax is fiscal policy but it can also be supply side policies. You might not agree to this but my thinking is that income tax will affect the demand side more and corporation tax, the supply side more. Obviously, two types of tax overlaps demand and supply side.
    Which other policies did you find that work for both AS and AD?
    I will bare that in mind and make sure that I know the policies well. I think for some reason I found that Interest Rates slightly worked for both. It might just be me but if the base rate decreases, then the demand for mortgages etc will rise and thus consumption may increase due to the cheaper value of loans. Also AS may increase due to the fact that it will simply cost less to borrow money and therefore higher levels of investment and so causing a possible increase in production and increase the LRAS maybe.


    Bit of a mouthful but do you think that would work, because it seems to make sense to me.
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    I know i'm asking alot of questions but sorry.

    How do you measure cpi again?
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    (Original post by Jamiesonn)
    I know i'm asking alot of questions but sorry.

    How do you measure cpi again?
    So CPI is the Consumer Price Index which shows the level of inflation.

    This is measured by doing two surveys:

    The first survey is done to find out the 'basket of goods' which is 650 commonly used goods.

    The second part of this is to find all the prices to these goods and have a base year price, with an index of 100, and then the prices every year after and then show the level of inflation.

    Make sure you remember that the CPI is measured in INDEX weighting. Does that help?
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    (Original post by shaminn)
    I will bare that in mind and make sure that I know the policies well. I think for some reason I found that Interest Rates slightly worked for both. It might just be me but if the base rate decreases, then the demand for mortgages etc will rise and thus consumption may increase due to the cheaper value of loans. Also AS may increase due to the fact that it will simply cost less to borrow money and therefore higher levels of investment and so causing a possible increase in production and increase the LRAS maybe.


    Bit of a mouthful but do you think that would work, because it seems to make sense to me.
    What you saying is right. But thats the knock-on effects on interest rates. Interest rates mainly influence the consumption level. And if consumption level increases, it will have a knock-on effect of increase in AS as firms will produced more to meet the increased demand. What you say is right but interest rate will always affect the demand side. Affecting the demand side will have effect on the supply side. So the primary effect of interest rate will be on the demand side.
    Yeah cost of borrowing is less. So, increase levels of investment. Interest rates affect investments. But then investments affect productive capacity in the long run. Interest rate itself doesn't affect productive capacity.
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    (Original post by ryanboi)
    What you saying is right. But thats the knock-on effects on interest rates. Interest rates mainly influence the consumption level. And if consumption level increases, it will have a knock-on effect of increase in AS as firms will produced more to meet the increased demand. What you say is right but interest rate will always affect the demand side. Affecting the demand side will have effect on the supply side. So the primary effect of interest rate will be on the demand side.
    Yeah cost of borrowing is less. So, increase levels of investment. Interest rates affect investments. But then investments affect productive capacity in the long run. Interest rate itself doesn't affect productive capacity.

    Ah that makes sense, so it's mainly just a knock on effect which causes AS to increase also. I'll bare that in mind.

    Also, with the Distribution of Income, what sort of things do you actually look at, because in textbooks there is no explicit stuff for it. Like i know that taxing and welfare helps to balance out the distribution of income but what else effects it or improves it?

    Sorry for all the Q's
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    (Original post by shaminn)
    So CPI is the Consumer Price Index which shows the level of inflation.

    This is measured by doing two surveys:

    The first survey is done to find out the 'basket of goods' which is 650 commonly used goods.

    The second part of this is to find all the prices to these goods and have a base year price, with an index of 100, and then the prices every year after and then show the level of inflation.

    Make sure you remember that the CPI is measured in INDEX weighting. Does that help?
    Yeah thanks i'm just going through numerous past papers
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    (Original post by shaminn)
    Ah that makes sense, so it's mainly just a knock on effect which causes AS to increase also. I'll bare that in mind.

    Also, with the Distribution of Income, what sort of things do you actually look at, because in textbooks there is no explicit stuff for it. Like i know that taxing and welfare helps to balance out the distribution of income but what else effects it or improves it?

    Sorry for all the Q's
    Interest rate will improves the income distribution between rich and poor. As rich people own lots of mortgages. If interest rate increase, rich people will suffer from it as they have to pay far more money than what they originally have to. Poor people will receive less effect from it as they own no or few mortgages. This will therefore, improve income distribution. Economic growth tend to benefit rich people as rich people will get lots of bonuses when in boom period.
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    anyone got a plan for answering 30 markers?
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    (Original post by Jack_Smith)
    anyone got a plan for answering 30 markers?
    18KAA and 12EV so I always do the following method:

    Definitions (2-6 marks depending on if diagram is applicable)
    Diagram (4 marks if fully labelled and if needed at all)
    Analysis on the components and the effects (4 marks)
    Evaluate the point just made (4 marks)

    Then repeat the analysis and evaluation three times over to get all the marks.


    That's my way of doing it but don't take it as the only way to answer it.

    Let me know if that helps.


    This was posted from The Student Room's iPhone/iPad App
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    One possible 30 mark question which I think may come up will be about Unemployment/Employment due to the Olympics. Can someone tell me how to answer the following two questions?

    1) Discuss how a increase in Employment will effect the economy? (30)

    2) Discuss how the government can achieve higher rates of employment in the economy? (30)

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Updated: June 10, 2012
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