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AQA A2 Economics Unit 4 - June 20th

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    Thought I'd post and see how everyone is getting on with preparation for this unit. Sure many of you will see this as a crucial exam to meet university offers and maybe even to cap off A levels as for some this will be the last exam before 10+ blissful weeks of summer!

    Which topics are people doing well with or struggling to grasp? Personally, my class are yet to finish the content of the course so revision hasn't even begun yet!
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    (Original post by Choppyy)
    Thought I'd post and see how everyone is getting on with preparation for this unit. Sure many of you will see this as a crucial exam to meet university offers and maybe even to cap off A levels as for some this will be the last exam before 10+ blissful weeks of summer!

    Which topics are people doing well with or struggling to grasp? Personally, my class are yet to finish the content of the course so revision hasn't even begun yet!
    We are no where near finished imo, but I've started to look at past paper questions for the stuff we've gone through.

    Took me a while to fully understand the P.C, but I find most of it to be a repeat of unit 2 but with greater depth?
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    Yeah definitely think A2 is a step up from AS in terms of the difficulty of new content but also, because it's a synoptic exam, you need to know things from units 1-3. Greater test of ability IMO.

    Haven't gone through any questions yet. We'll do a mock 2 weeks before we leave, not long left!
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    We only started this unit just before Easter - and tbh we've done very little since! I'm dreading the exam, I'm still not 100% sure on ECON3 either - depends what comes up so I've got a lot of revision to do!

    This thread will really help - what do I actually need to know? We haven't got any textbooks, I'm planning on going through the spec, but any simple explanations would be great!
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    does anyone have any really useful revision posters for any of the topics, especially globalisation and the EU, im really stuck on them topics.
    I sat the exam in January and got an E, when in AS I came out with an A at the end
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    Hey everyone,
    I am currently revising the disadvantages of monetary union (Eurozone) and one of them is a 'loss of exchange rate flexibility against other countries which have adopted the Euro.'
    I don't really understand what this means and was wondering if somebody could help me out?
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    Wahaaayyy, there is a thread for this after all :p:

    How's revision going people? I NEED at least an A in this to meet my UCL offer. :sadnod:

    One thing I need help with is pros/cons for joining the Euro... Someone enlighten me please?
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    (Original post by sweetascandy)
    Wahaaayyy, there is a thread for this after all :p:

    How's revision going people? I NEED at least an A in this to meet my UCL offer. :sadnod:

    One thing I need help with is pros/cons for joining the Euro... Someone enlighten me please?
    I'm lucky - my offer for my firm states that one of my A grades can be general studies. As it HAS to include maths, and I don't need to pass my final geography exam to get an A, it means I'm not too stressed about economics. Having said that, I'll be disappointed with less than an A.

    TBH - I struggle more with ECON2 (this friday!) that anything else, because I hate the multiple choice!
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    (Original post by sweetascandy)
    Wahaaayyy, there is a thread for this after all :p:

    How's revision going people? I NEED at least an A in this to meet my UCL offer. :sadnod:

    One thing I need help with is pros/cons for joining the Euro... Someone enlighten me please?
    Pro's:

    Greater opportunities for trade with other Euro members, due to greater certainty and confidence about the exchange rate for domestic businesses.

    Reduced transaction costs for businesses.

    Greater price transparency for businesses.

    Possibility, providing policies are adjusted accordingly, of inward investment from other EU members. Therefore employment opportunities from this.

    Con's:

    Loss of independent monetary policy. So the UK would be unable to adjust interest rates according to Uk growth.

    Great political pressure to contribute to EFSF, and the fiscal compact, so fiscal policy would be have tighter control.

    The issues with greece, and their lack of fiscal discipline has created fears in bond markets with investor tightening the cost of borrowing, which can create more leakages out of out circular flow, in the form of interest payments.

    Inability to depreciate and appreciate our own currency to manipulate export performance.



    BTW, what are you planning to study at UCL?
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    (Original post by Seanm1994)
    Hey everyone,
    I am currently revising the disadvantages of monetary union (Eurozone) and one of them is a 'loss of exchange rate flexibility against other countries which have adopted the Euro.'
    I don't really understand what this means and was wondering if somebody could help me out?
    Well, If i understand correctly, by joining the euro, the uk would lose the power to independently adjust the currency as the ECB is responsible for this through the rate of interest and money supply. Therefore, we would be unable to use this as a means to control export (balance of payments on current account) performance and inflation. This is one of the main issues Greece had when she joined the Euro in 2001 (i think). Greece had different economic objectives and growth rates to the likes of Germany, so by accepting an interest rate that is set by the ECB, who would naturally be bias in determining the rate towards germany's and frances growth etc due to its size and importance in the EU, resulted in Greece lacking fiscal discipline and resulted in a mountain of debt. So I think it would be a really bad idea if UK joined the euro!!
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    (Original post by tarek1)
    Well, If i understand correctly, by joining the euro, the uk would lose the power to independently adjust the currency as the ECB is responsible for this through the rate of interest and money supply. Therefore, we would be unable to use this as a means to control export (balance of payments on current account) performance and inflation. This is one of the main issues Greece had when she joined the Euro in 2001 (i think). Greece had different economic objectives and growth rates to the likes of Germany, so by accepting an interest rate that is set by the ECB, who would naturally be bias in determining the rate towards germany's and frances growth etc due to its size and importance in the EU, resulted in Greece lacking fiscal discipline and resulted in a mountain of debt. So I think it would be a really bad idea if UK joined the euro!!
    Nicely put. Just one question however; when you say the UK would lose the power independently to adjust the currency I don't understand what you mean. The UK has floating exchange rate therefore it can't manipulate its own currency anyway?
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    (Original post by Seanm1994)
    Nicely put. Just one question however; when you say the UK would lose the power independently to adjust the currency I don't understand what you mean. The UK has floating exchange rate therefore it can't manipulate its own currency anyway?
    Yes you are right, but under a floating exchange rate the government still hold foreign reserves to buy or sell according to economic objectives. Also, you can alter the interest rate to influence "HOT MONEY", which it the flow of money into UK banks. So if interest rates are low, then there would be less businesses/ wealthy individuals wanting to hold money in UK banks as the return would be less. So, if you look at the Demand and supply, demand would shift leftwards, hence causing a devalue of the pound. If we were part of the Euro, then we would not be able to do this as the ECB would have control over interest rates.

    Hope this helps :]
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    (Original post by tarek1)
    Yes you are right, but under a floating exchange rate the government still hold foreign reserves to buy or sell according to economic objectives. Also, you can alter the interest rate to influence "HOT MONEY", which it the flow of money into UK banks. So if interest rates are low, then there would be less businesses/ wealthy individuals wanting to hold money in UK banks as the return would be less. So, if you look at the Demand and supply, demand would shift leftwards, hence causing a devalue of the pound. If we were part of the Euro, then we would not be able to do this as the ECB would have control over interest rates.

    Hope this helps :]
    Yeh thanks, that clears it up. You feeling prepared for this exam?
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    (Original post by Seanm1994)
    Yeh thanks, that clears it up. You feeling prepared for this exam?
    I guess so, i've taught A2 myself since i'm an external student, so the exam could go either really well, or terrible, i have no idea!
    If you have any tips that your teacher has told you about the exam, the possible questions, the style of essay etc etc, may be quite useful for me :]

    What about yourself, and topics your finding particularly difficult?
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    (Original post by tarek1)
    I guess so, i've taught A2 myself since i'm an external student, so the exam could go either really well, or terrible, i have no idea!
    If you have any tips that your teacher has told you about the exam, the possible questions, the style of essay etc etc, may be quite useful for me :]

    What about yourself, and topics your finding particularly difficult?
    The main thing my teacher stresses is evaluation and how we should have a lot of pre-prepared evaluation instead of trying to come up with it on the spot. Of course for some questions this doesn't apply but for some questions, such as benefits of joining the EU, pre-prepared evaluation can reduce time wasting and is just generally beneficial. Also he says to try and include real-world examples where applicable instead of just relying solely on economics theory/analysis.

    I still have a lot left to revise but I am fairly confident. Currently on a high A from AS and really want an A* but who knows. I'm much more confident on some topics than others so I guess it just depends what comes up on the day.
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    (Original post by Seanm1994)
    The main thing my teacher stresses is evaluation and how we should have a lot of pre-prepared evaluation instead of trying to come up with it on the spot. Of course for some questions this doesn't apply but for some questions, such as benefits of joining the EU, pre-prepared evaluation can reduce time wasting and is just generally beneficial. Also he says to try and include real-world examples where applicable instead of just relying solely on economics theory/analysis.

    I still have a lot left to revise but I am fairly confident. Currently on a high A from AS and really want an A* but who knows. I'm much more confident on some topics than others so I guess it just depends what comes up on the day.
    If there is any advice i can give, its to watch documentaries on the EU crisis, the financial crisis, and the effect globalisation is having on the world, and in particular developing nations. Just go on Youtube, there are so many on the EU, and globalisation, which you can use in the exam as real world examples. And it puts everything you've learnt into context. Ow and go onto BBC news website, economy section everyday, and just read about the developments in Greece, I think us econ students are lucky we have soo much going on in the EU atm.
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    (Original post by tarek1)
    If there is any advice i can give, its to watch documentaries on the EU crisis, the financial crisis, and the effect globalisation is having on the world, and in particular developing nations. Just go on Youtube, there are so many on the EU, and globalisation, which you can use in the exam as real world examples. And it puts everything you've learnt into context. Ow and go onto BBC news website, economy section everyday, and just read about the developments in Greece, I think us econ students are lucky we have soo much going on in the EU atm.
    Yeh I've been trying to read around as much as I can recently. By the way in response to your earlier question, I'm having trouble developing the causes of wealth and income inequality. Any notes/info you have on these would be great.
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    (Original post by Seanm1994)
    Yeh I've been trying to read around as much as I can recently. By the way in response to your earlier question, I'm having trouble developing the causes of wealth and income inequality. Any notes/info you have on these would be great.
    Income inequality:

    - Skills and qualifications of labour. If an individual is well qualified, educated etc, then demand for labour would be higher. Demand would also be inelastic for well qualified people (due to their importance and lack of substitutes), therefore, they are able to bid up their wages more. This would further increase income inequality. Think about the lorenz curve for this question, and try and include it in your answer.
    - Lack of government support/ intervention through progressive taxation, and benefits.
    - Number of people in the household, so if there are more people in the household that are qualified then this is likely to boost household income.


    Wealth inequality: Just remember with this, there is marketable wealth and non-marketable wealth. So it depends which one your talking about.

    - Savings
    - Chance, e.g. winning the lottery.
    - Inheritance.

    If you have any other questions just let me knoww :]
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    What topics do you think will come up. And I personally think something either on the euro in the european context or something to do with exchange rates which will enable candidates to share their knowledge of the euro crisis will come up.

    But could someone be more specific?

    I really want protectionism/budget deficit (PSNCR) to come up. Anyone know the chances? I know it came up a fair bit at the start of the syllabus, but not for the last 3 papers I think? :/ Predictions people?
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    Can someone tell me the difference between trade deflection, trade creation and trade diversion???

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