AQA A2 Economics Unit 4 - June 20th

Reply 380

Mizz_S

1

Original post by ohTS

Hi thanks for these!! Just wondering why long run growth causes high levels of unemployment or if this is a typo?

oops

... that was a typo. sorry!!

Reply 381

Tateco

14

Original post by 1L8A7D9

Of course I am.

I think we should be given some form of special compensation for having an England game the night before. Had the same for Unit 3 last Tuesday.

Hopefully it will lower the grade boundaries :wink:

Reply 382

Wulf chan

16

I'm starting my revision now because I am stupid. What should I focus on? because I can't revise everything before wednesday. Also does any one know what is likely to come up, based on past papers???

Reply 383

kingboom4

4

Original post by Wulf chan

I'm starting my revision now because I am stupid. What should I focus on? because I can't revise everything before wednesday. Also does any one know what is likely to come up, based on past papers???

I second that question... even though I've heard that there is a high chance that globalisation and monetary policy will come up, is that true?

Reply 384

ilovecatsforlife

2

I'd focus on globalisation, exchange rates and BoP. A lot of it is AS recap tbh

Reply 385

_becca

9

Original post by Wulf chan

I'm starting my revision now because I am stupid. What should I focus on? because I can't revise everything before wednesday. Also does any one know what is likely to come up, based on past papers???

Exchange rates tend to come up every couple of years because they're considered a 'tough' question. There's usually one question on the national economy and one on the international (although the international ones nearly always ask how international changes will affect the UK).

Reply 386

Prolific

2

It'd be best to briefly know the main topics of the exam. I've decided I'm going to hedge my bets and only briefly revise the NAIRU and the Phillips Curve trade-off, mainly because employment questions are too boring.

Inflation/Deflation/Stagflation - Causes of Inflation/Deflation/Stagflation, evaluate the measurement of CPI and RPI; other exogenous factors such whether the inflation rate is cooked, or whether inflation impacts growth, investment, exchange rate, consumer and business confidence.

Balance of Payments [Surplus/Deficit/Balance]

Exchange Rates - Net Inward Investment, how exchange rates impact business and consumer confidence, how exchange rates influence AD and the inflows of Hot Money into the economy [type of exchange rate: (e.g 'dirty float', 'pegged exchange rate' and 'floating' exchange rate)

Recession impact, fiscal deficits, globalisation, protectionism, EU single market, current account deficit, economic growth.

There's more, but that's pretty basic stuff that means you can answer the entire exam.

Reply 387

tallysingh

Ive pretty much revised everything to a high standard, apart from the international economy. I will do exchange rates, globalization and EU, as it quite likely to come up, would my AS level understanding be enough for BoP and would it be possible to avoid trade in the exam? I need 42 UMS in this exam to get a B

Reply 388

_becca

9

Could someone help me with this question please? :smile:

"To what extent do you agree with the view that the UK economy would benefit if the euro were to be adopted?"

I have:

PROS -
Transparency - in terms of price, comparing goods etc
Makes sense as Eurozone makes up a large amount of our export markets
Could you put in Trade Creation diagram? That it opens us up to greater levels of trade thus welfare gain etc...

CONS -
Problems in eurozone e.g Greece close to bankruptcy, PIIGS failing - should we be associating more with BRICS?
Recent speech D-Cam said without a doubt we are not joining Euro - tradition? Sterling is respected as currency, hundreds of years of history (Euro only 12 years old). (Evaluation is this a strong enough point to warrant it being used, how much does history actually help the currency now).
Practical problems e.g. switchover itself, training, hassle etc.

What else could I put? x

Reply 389

zxh800

13

Hey guys, how risky do you think it would be to not revise reasons for joining the Euro? And if I do not revise that what other topics related to the European Context question would I need to know?

Reply 390

Prolific

2

Original post by _becca

Could someone help me with this question please? :smile:

"To what extent do you agree with the view that the UK economy would benefit if the euro were to be adopted?"

I have:

PROS -
Transparency - in terms of price, comparing goods etc
Makes sense as Eurozone makes up a large amount of our export markets
Could you put in Trade Creation diagram? That it opens us up to greater levels of trade thus welfare gain etc...

CONS -
Problems in eurozone e.g Greece close to bankruptcy, PIIGS failing - should we be associating more with BRICS?
Recent speech D-Cam said without a doubt we are not joining Euro - tradition? Sterling is respected as currency, hundreds of years of history (Euro only 12 years old). (Evaluation is this a strong enough point to warrant it being used, how much does history actually help the currency now).
Practical problems e.g. switchover itself, training, hassle etc.

What else could I put? x

You are missing some obvious indicators in the question.

- An advantage is that some members of the Euro are running a budget surplus despite a global recession, and thus integration with the Euro means that the exchange rate of the UK responds to activities of the entire Eurozone, rather than the export-led growth of domestic firms.

- Adoption of the Euro means that there is no requirement for members to purchase the pound and become discouraged by the increase of other countries when they purchase imported goods and services.

----------------

- A disadvantage is that the adoption of the Euro means that the exchange rate and how competitive the UK is widely determined by the stances of other countries in the Eurozone. Take Greece for example, where a large budget deficit means that investors are unwilling to invest in a destabilised Euro, whereas they would be keen to invest in the pound. The country's price of goods and service, investment inflows and rate of exchange hangs in the balance of other countries.

- The pound is currently strong against the Euro. Adopting a new currency requires a completely new change of reserve, of policy making and a greater cooperation of fiscal and monetary policies, the UK almost encouraged to follow Merkel's decisive policy of a fiscal budget target across the EU.

Reply 391

ilovecatsforlife

2

So worried about this exam. Praying for borrowing, budget deficits or protectionism in the essays. For monetary policy, do we just need to know about how it affects AD? how does a expansionary money supply boost economic growth?

Reply 392

Prolific

2

Original post by ilovecatsforlife

So worried about this exam. Praying for borrowing, budget deficits or protectionism in the essays. For monetary policy, do we just need to know about how it affects AD? how does a expansionary money supply boost economic growth?

For monetary policy, just make sure you know the Quantity Theory of Money and how an increase in the money supply directly results in an increase in the price level, which could result in inflation, as well as the effects of a decrease/increase in interest rates.

Make sure you know about the liquidity trap and how low interest rates results in the economy having to be 'monetised' - stimulated by the central government buying back government bonds, effectively adding liquidity.

(edited 11 years ago)

Reply 393

ilovecatsforlife

2

Original post by Prolific

For monetary policy, just make sure you know the Quantity Theory of Money and how an increase in the money supply directly results in an increase in the price level, which could result in inflation, as well as the effects of a decrease/increase in interest rates.

Make sure you know about the liquidity trap and how low interest rates results in the economy having to be 'monetised' - stimulated by the central government buying back government bonds, effectively adding liquidity.

Do you reckon they'll be a supply side, monetary, fiscal question in the essays?

Reply 394

Prolific

2

Original post by ilovecatsforlife

Do you reckon they'll be a supply side, monetary, fiscal question in the essays?

Even if there's not, it's pretty much the core knowledge in this syllabus. The government has tools of Fiscal Policy and Monetary Policy, but there is only so much they can control. I predict a monetary policy question, particularly as this paper was constructed near the time of the first talks of Quantitative Easing and increasing the money supply to spur on aggregate demand.

There is a lot of knowledge you can add it, and it's all down to chains of reason. The paper is a hierarchy, where if you know what the effect of an increase in interest rates is, you'll be earning marks, but if you know that this depends on what level interest rates are at the time of this monetary expansion, you'll be gaining more marks.

If you then mention their 'top tier' points, (e.g. If the economy is in a liqudity trap, interest rates are at a low and expansionary fiscal policy will have a multiplier effect on equilibrium income, meaning thaat if the demand for money is sensitive, crowding out will take place and this can only be remedied by means of monetising the economy) this will be earning you the marks, as this is crucial evaluation.

Reply 395

megan.cl

Original post by Prolific

Make sure you know about the liquidity trap and how low interest rates results in the economy having to be 'monetised' - stimulated by the central government buying back government bonds, effectively adding liquidity.

We haven't learnt a thing about the liquidity trap, would you (or someone else) be able to outline what it is? :biggrin:

Reply 396

_becca

9

Original post by Prolific

.

Thank you very much! So in terms of diagrams and evaluation for this question, what would you write?
2
Also, could you please explain what you mean by "equilibrium income", "demand for money is sensitive", "monetising the economy"? Sorry for all the questions!

(edited 11 years ago)

Reply 397

tallysingh

Original post by megan.cl

We haven't learnt a thing about the liquidity trap, would you (or someone else) be able to outline what it is? :biggrin:

Its a keynesian view, they state this is the point where monetary policy fails. It is where interest rates cannot be decreased any further to stimulate AD. In 2008, this led to quantitative easing.

Reply 398

tallysingh

Original post by Prolific

Even if there's not, it's pretty much the core knowledge in this syllabus. The government has tools of Fiscal Policy and Monetary Policy, but there is only so much they can control. I predict a monetary policy question, particularly as this paper was constructed near the time of the first talks of Quantitative Easing and increasing the money supply to spur on aggregate demand.

There is a lot of knowledge you can add it, and it's all down to chains of reason. The paper is a hierarchy, where if you know what the effect of an increase in interest rates is, you'll be earning marks, but if you know that this depends on what level interest rates are at the time of this monetary expansion, you'll be gaining more marks.

If you then mention their 'top tier' points, (e.g. If the economy is in a liqudity trap, interest rates are at a low and expansionary fiscal policy will have a multiplier effect on equilibrium income, meaning thaat if the demand for money is sensitive, crowding out will take place and this can only be remedied by means of monetising the economy) this will be earning you the marks, as this is crucial evaluation.