AQA A2 Economics Unit 4 - June 20th

'Call me Freshwater'. Haha, well played.

Wait what? You work? That's awesome, especially if it's in finance.

Thanks and to you too.

I started working on building a psychological mindset for the trading of stocks and commodities, so I spend more time suiting up and making money and watching bond yields. Maybe one day I will go to university, but I'm not fond of a syllabus that gives me no room to do what I love. Economics is such a great subject though, a million accolades should be awarded for all the people on here that are facing the death trap that is AQA, OCR and Edexcel economics.

Could someone help me with the following question?

"Assess the contribution which supply side reforms might make in helping avoid major recessions."

Could someone help me with the following question?

"Assess the contribution which supply side reforms might make in helping avoid major recessions."

Can a shift to the right in LRAS cause deflation? If this is the case, is this a disadvantage of using supply side policies?

Does the 25 marks have to be balanced? because I usually do 4 for my view and 2 for the opposing view

- Supply side reforms boost long-run growth and shift LRAS to the right. As more is produced, to a better standard and more efficiently, this will mean that there is further export-led growth as many desire our products, avoiding a recession as for a recession to exist there needs to be 2 or more quarters of negative economic growth.

- Retraining programmes mean that out labour pool is more advanced. If our labour is producing more and at a quicker rate, this leads to the effects said above. But in times of globalisation there are theories which argue 'The Great Brain Robbery', where workers are trained and then relocate to where the greatest MRP is, and where they can make the best lives for themselves.

- You can then mention net inward investment as people see that supply-side policies are taking effect, firms producing more and Hot Money inflows into the economy increasing.

- Balance of payments surplus on current account could arise, but this depends on the countries' trading partners, and whether the costs of productions do not negate the supply-side policies. It's all well and good if little Miss Osborne decides he wants to stimulate growth, but if firms are unable to match the low costs of other competitive countries, there will be no export-led growth and a further propensity to import better goods from overseas.

- depends on how long the recession has been.
- depends on the nature of the deficit (structural/cyclical)
- depends on if fiscal policy is not negating investments in infrastructure and demand stimulation.
- depends on if the supply-side policies can actually induce the economic growth. If there is demand-deficient unemployment no matter how skilled workers won't bee wanted without the creation off new jobs.

You, sir, are amazing. <3

But what is MRP? Also, you went onto evaluate the BoP surplus point before fully explaining it (you probz assumed I already know it) How would the surplus arise? Thanks sooo much

When they ask about a question on increasing economics growth do you talk about actual growth which is increase in AD or potential growth which is increase in LRAS?

Please help

When they ask about a question on increasing economics growth do you talk about actual growth which is increase in AD or potential growth which is increase in LRAS?

Please help

When they ask about a question on increasing economics growth do you talk about actual growth which is increase in AD or potential growth which is increase in LRAS?

Please help

Marginal Revenue Product. Since the paper is synoptic, sometimes it's good to add a tiny bit of knowledge. it's basically saying that a worker will recolate and find a job where they gain the most out of their skillset, and will earn the most for the least work.

Surplus will arise because you're exporting more, and you're highly competitive with full capacity, low costs and low prices. You're export more than you import, but it widely depends on the exchange rate, purchasing power parity in comparison to other currencies and the depth of the deficit you are running.

Depends on the current inflation rate, and the built-in inflation from the previous boom.

Just searched my notes to make sure, but this is pretty straightforward.
- Supply-side movements mean LRAS shifts outwards.
- This is an inflationary gap, positive output gap.
- Clue is in the name, inflation is caused, if anything.

I don't particularly understand your point.

I'll tell you what I am thinking and then you correct me where I'm wrong.

If supply side movements shift the LRAS to the right, then the price level drops as can be seen on an AD-LRAS diagram. This is disinflation or deflation depending on the current rate of inflation.

I don't understand how inflation is caused from this process.