OCR F585 June 2015 The Global Economy

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Is someone able to help me understand comparative advantage? I understand the concept of producing a good at a lower opportunity cost, but I don't understand how, for example, having lots of capital machinery gives a country a comparative advantage in producing electronics (or something along those lines)?

Does anyone know anywhere I can get model answers to the Tutor2u toolkit questions? Or even are there any?

Not to be annoying but i have heard that the tutor2u toolkit is long and it contains a lot of information you do not need, maybe try the questions in the APT as they work with the examiners and the questions will be more realistic?

but if the toolkit helps you then by all means use it i personally just found it dragging on and on.

Would anyone be able to give me feedback on the answer I wrote to this question?? Have I written too much?

Comment to theextent to which supply side reforms can be expected to improve the UK's net trade position? (10)

Spending on education and training could lead to an improvement in the UKs net trade position. This will result in workers becoming more skilled and therefore more productive which increases quality of labour and products. This will decrease unit labour costs, resulting in cheaper goods and services thus increasing international price competitiveness. This will result in an increase in demand for UK goods as they are cheaper and betterquality resulting in an increase in UK exports thus improving the net trade position (value of exports minus the value of imports).

Investment in infrastructure will help improve the level of competitiveness of UK firms as new infrastructure, such as new roads; will assist in reducing firms transportation costs. This means are able to sell goods and services at a lower price, therefore firms goods become more price competitive therefore improving international competitiveness. This will lead to an increase exports leading to an improvement in the UKs net trade position.

However, supply side policies might not improve the UKs net trade position. For example, the policy to reduce corporation tax may be ineffective if business confidence is low. This means that even if firms would have higher retained profits from investing with low corporation tax, they might chose not to invest as they might lack confidence in a poor future economic prospect (i.e weak recovery). As a result there will be no improvement in international competitiveness and no increase in UK exports.

Furthermore, the effectiveness of UK government policies is dependent on the size of government debt. Currently the UK government has a very high debt (£4bn in first quarter of 2013). It can therefore not afford to invest large amounts of money in infrastructure and education. If the gov did so, it would be associated with a huge opportunity cost.
Moreover, it depends on the level of confidence in domestic firms. If firms choose not to invest, then policies such as investments in infrastructure or increasing access to finance for business will be ineffective as the gains are not passed on to produce better quality or lower-priced goods.

Does anyone know anywhere I can get model answers to the Tutor2u toolkit questions? Or even are there any?

Yeah I found it pretty heavy :/ What's the APT? Sounds like it could be very useful, is it possible you could send me a link where to find it?

Comment on whether re-balancing the economy awayfrom consumption and towards investment would mean sustainable economic growth

anyone got some points?...

If the last question is about globalisation, you would link it to the case study and put forward stiglitz argument and and IMF, or can you just do generic answer?

Comment on whether re-balancing the economy awayfrom consumption and towards investment would mean sustainable economic growth

anyone got some points?...

linking it would help as it will make ur analysis and evaluation better and it will show you are applying your knowledge. also i have a feeling the essay may not be a globalisation question as that would be too straight forward, it may involve how trade is affected by globalisation or one that i think is very likely is inequity

The emphasis of extract 5 is on globalisation and inequality. It has to be about globalisation, developing countries and inequality to some extent

i hope it is, my teacher has just been over analysing it tbh

I hope its not inequality and as many people have said previously, its not on the spec in any great detail. I would still revise it though

Not to be annoying but i have heard that the tutor2u toolkit is long and it contains a lot of information you do not need, maybe try the questions in the APT as they work with the examiners and the questions will be more realistic?

but if the toolkit helps you then by all means use it i personally just found it dragging on and on.