AQA A Level Economics Paper 2 7136/2 - 6 Jun 2022 [Exam Chat]

i talked about the phillips curve (one of my points was low inflation = high unemployment) and how in the extract it said it’s outdated bc a lot of countries have had low inflation and low unemployment idk if that’s right tho

I mentioned that too, for the 9 marker did you do an AD shift left?

Reply 61

Tomytomtom

2

Original post by CobblyWobbly

What points did u put
I put price level, exchange rate, trade barriers, and growth overseas/ productivity

me too

Reply 62

Taz.

5

Original post by vincentvangooo

i talked about the phillips curve (one of my points was low inflation = high unemployment) and how in the extract it said it’s outdated bc a lot of countries have had low inflation and low unemployment idk if that’s right tho

yh i mentioned that as well. Although i said that inflation could not really be the main objective as it works alongside low unemployment as the extract mentions. I criticised the Philips Curve like the extract though, not sure if my argument was strong though...

Reply 63

vincentvangooo

10

Original post by ibrahimx04

I mentioned that too, for the 9 marker did you do an AD shift left?

i think i did the import tariff diagram?

Reply 64

o.opiu

4

Original post by CobblyWobbly

What points did u put
I put price level, exchange rate, trade barriers, and growth overseas/ productivity

I put loss in comparative advantage, increased production costs(wages) and relative inflation

Reply 65

borat32

5

I said for the 9 marker that a reduction in tariffs means that the excess domestic demand created by the increase in the price of imports will be reduced as import prices have now lowered, so I drew a trade creation diagram showing the fall in the tariff price(pw tariff) to the world price which is lower due to the comparative advantages of other countries like China, and then there’s a increase in consumer surplus as they can purchase goods from abroad at a lower price, also said how it increases competition and then higher productivity as domestic firms have to cut costs.

Reply 66

neymarjr1107

2

Original post by Blablu

I’m guessing I’m one of the few who chose essay one. Very nice essay Q tbh.

same here. what did you write for the 15 marker and 25 marker?

Reply 67

username5929163

11

Original post by neymarjr1107

same here. what did you write for the 15 marker and 25 marker?

Can’t remember the Qs anymore lol. Also, revising for my other exam.

Reply 68

CobblyWobbly

4

Original post by borat32

I said for the 9 marker that a reduction in tariffs means that the excess domestic demand created by the increase in the price of imports will be reduced as import prices have now lowered, so I drew a trade creation diagram showing the fall in the tariff price(pw tariff) to the world price which is lower due to the comparative advantages of other countries like China, and then there’s a increase in consumer surplus as they can purchase goods from abroad at a lower price, also said how it increases competition and then higher productivity as domestic firms have to cut costs.

I put similar points - you think itll be right?
Also did u draw a dgm showing tariffs falling?

And whats were ur points for the inflation 25marker
I put
- less purchasing ability which can reduce growth
- reduced int compet
- instability can lead to deflation which is bad and its mentioned in th eextract and I used japan for inflaito
Then I evaluated and I also said that it deoends on kevel of inflation and that low unemployment may be a better objective

Reply 69

ethan.stone

4

Original post by Blablu

I’m guessing I’m one of the few who chose essay one. Very nice essay Q tbh.

I did it too, absolute gift of a 15 and 25.

Reply 70

fleas33333

1

Original post by ibrahimx04

Did anybody do context 2?

What did you guys get for the 9 marker? I went for a decrease in AD because reduced tariffs on imports makes them cheaper so increased demand which widens the current account deficit which decreases AD and caused price levels to drop, in the extract it mentioned lower inflation results in lower growth and employment so I assumed it was demand side deflation.

And what did you all conclude for the data response 25 marker? I said target long run growth to improve all 4 objectives.

And I also did essay 2, did anybody else?

I did cost push inflation Rip and that an decrease in tariffs reeduces cost of production fml

Reply 71

borat32

5

For 9 marker I didn’t really link it to AD which is a bit annoying but I talked about a higher AS because of greater competition for domestic firms to reduce their prices to the world price, thus causing benevolent deflationary pressure and also increasing output. I also added a trade creation diagram showing that a removal of tariffs leads to lower consumer prices due to lower priced imports which are more competitive(should’ve then said how it worsens a CA then leading to a fall in AD).

25 marker talked about dangers of inflationary pressure during a positive output gap which can be magnified by cyclical fluctuations in the economic cycle like house price bubbles. Then discussed the tools the government would use to keep inflation low, such as contractionary monetary policy and then how rising interest rates can conflict with other macroeconomic objectives like economic growth and unemployment from deflation(if interest rates are too high). Then said that higher interest rates lead to currency appreciation which makes exports more expensive which may harm the current account and thus AD, but imports are cheaper leading to lower imported inflation which reduces cost push inflation for firms which allows them to be more internationally competitive but also achieving other macroeconomic objectives. Said that other objectives are more important to the UK economy such as economic growth during the covid pandemic where they are willing to allow temporary inflation in order to keep unemployment low and stimulate growth, then I linked it to the Philips curve and how increased government spending may lead to inflation but lower unemployment, but if fiscal supply side policies are used then all macro economic objectives can be achieved.

Original post by ibrahimx04

For the 9 marker, I began with a definition of inflation and also tariffs. I then drew an AD AS diagram and shifted AD to the left, because tariffs are essentially taxes, reducing them makes imports cheaper thus demand is greater so the (X-M) value decreases and there is a widening of the current account deficit which decreases AD and thus results in lower price levels.

A few people I know however went for the SRAS shift to the right due to lower costs of production, so I’m unsure which one is right - both seem correct?

And for the 25 marker, I did the cons of inflation such as asset price bubbles, fall in real disposable incomes and uncertainty. Then how strong growth might be more desirable because of material standards of living and international competitiveness and development, and then also unemployment and how high unemployment can have the hysteresis effect and also result in govs having to spend more on welfare benefits and areas affected. My judgement I’m unsure, I said target long run growth to improve all 4 objectives.

Reply 72

borat32

5

Original post by CobblyWobbly

I put similar points - you think itll be right?
Also did u draw a dgm showing tariffs falling?

And whats were ur points for the inflation 25marker
I put
- less purchasing ability which can reduce growth
- reduced int compet
- instability can lead to deflation which is bad and its mentioned in th eextract and I used japan for inflaito
Then I evaluated and I also said that it deoends on kevel of inflation and that low unemployment may be a better objective

Yh just kinda wished I talked about AD for increased imports honestly dk y I didn’t think of it. Yh that was my diagram show the fall to the world price so lower prices to consumers.

25 I focused more on the benefits of stable inflation and the tools that are used to control it and how they can conflict with other macroeconomic objectives which may be more important

Reply 73

wolf14223

3

Original post by Anonymous37853

I ran out of time. Btw is there anyway unemployment can link to development because I kinda waffled on the 2nd 25 marker

wdym 2nd 25 marker we were only supposed to answer one

Reply 74

dsfdmkvkfmm

8

Original post by wolf14223

wdym 2nd 25 marker we were only supposed to answer one

i think they mean one from the essay and one from the context so two 25 markers

Reply 75

dsfdmkvkfmm

8

anyone do essay 2? what did you write about supply-side improvements?

Reply 76

borat32

5

So I said how they are improvements to productivity, said how interventionist policies such as education and training leads to greater skills and qualifications and thus greater productivity, so I showed a rightward shift in LRAS. Also said how it reduces occupational immobility and then structural unemployment , and it increase the quality of goods and services from higher productivity leading to greater exports from higher international competitiveness(may not be the case for the UK). Then said subsiding relocation costs to reduce geographical immobility. Said how interventionist policies can reduce the structural factors affecting the natural rate of unemployment.

Then I discussed that free market policies need to be used to reduce the replacement ratio(frictional factors)such as cutting income tax which increases incentive to work and greater productivity due to wage efficiency, how it can also have a demand side impact through higher disposable incomes and then consumption. Drew the laffer curve etc. Then talked about privatisation and deregulation and said how they can lead to lower efficiency and productivity due to monopoly creation.

Ko

Anyone do context one( seems not many picked it and I kinda regret/idk what was context 2 about again) and essay 2

And if u did do context 1 what did u write for the 25 marker and 9