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Question spotting for F585 Economics The Global Economy OCR A level June 2011

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Second bailout for Greece, possible main theme for the exam ? opinions
Original post by the_prodigy
Second bailout for Greece, possible main theme for the exam ? opinions


I don't think the exam will have a 'theme'..but I reckon it'll be heavily centralised about the Eurozone crisis and the ECB acting too late with their shoddy monetary policy

I see the 20 marker being comment on...yadda yadda yadda...of trade liberalisation
Can someone explain to me negative real interest rates
im baffed :s
:smile:
Reply 203
Avatar for koba-girl
koba-girl
Original post by ajayhp
Trade & intergration


Hi, i think that too :smile:
What evaluative points do you think you can write about this?
Are you using tutor 2 you, ive pretty much learnt that, do you think its enough?
Reply 204
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Hits1
Original post by Tariq_3458
Can someone explain to me negative real interest rates
im baffed :s
:smile:


Interest rates that fall below zero. The material suggests that monetary policy has been 'too loose' fueled by negative interest rates and so on. Therefore short-term growth has come at the expense of inflation..

I think....
Original post by Tariq_3458
Can someone explain to me negative real interest rates
im baffed :s
:smile:


basically inflation is higher than interest rates

at the moment it can be said the interest rates in the UK are 'negative'

interest is only 0.5% whereas inflation is 5%, so we're 'losing out' by saving so people would rather spend, AD increase = short term economic growth? but is it worth it with high inflation...that's what the extracts are trying to get accross...that the short term Eurozone economic growth was at the expense of inflation
(edited 12 years ago)
Reply 206
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ajayhp
3
any1 wanna check me answer for Italy heading into a double-dip
IMAGE_133.jpg36.3KB
Reply 207
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koba-girl
Original post by viksta1000
I don't think the exam will have a 'theme'..but I reckon it'll be heavily centralised about the Eurozone crisis and the ECB acting too late with their shoddy monetary policy

I see the 20 marker being comment on...yadda yadda yadda...of trade liberalisation


what are the evaluative points for this topic though? :smile: x
Original post by Hits1
Interest rates that fall below zero. The material suggests that monetary policy has been 'too loose' fueled by negative interest rates and so on. Therefore short-term growth has come at the expense of inflation..

I think....


the bold bit is spot on

but the interest rates will never fall below zero...that basically means by taking out loans your paying back less...or saving will cost you money lol
Reply 209
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Hits1
Original post by ajayhp
any1 wanna check me answer for Italy heading into a double-dip


Yeh thats good! Also put in the diagrams therefore a shift to the left of AD or AS that represents the double-dip recession.

Really important to put diagrams everywhere you can as this clearly identifies that your an economics student, also ensures that you gets marks for analysis, Level 3 etc..
Reply 210
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Hits1
Original post by viksta1000
the bold bit is spot on

but the interest rates will never fall below zero...that basically means by taking out loans your paying back less...or saving will cost you money lol


haha oh dear, Just read you reply and makes much more sense in that the inflation rate is higher than the interest rate!

Thanks for clearing that up!
Reply 211
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ajayhp
3
ty, yep will do, ty for the advice
Can anyone please answer a couple of simple 4 markers that i'm not 100% sure about;

' Distinguish between monetary convergence and real convergence'
' Distinguish between an economic slowdown and economic recession'

I vaguely know what each of them is but wouldn't know how to get 4 marks! Thank you :smile:
Reply 213
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Hits1
Original post by ajayhp
ty, yep will do, ty for the advice


Also try and add when talking about consumer confidence - that this leads to a fall in Consumption, Consumption is a component of AD - hence there will be a further shift to the left of AD (as you have mentioned) and the same for Business confidence - Investment etc etc... Component of AD etc -
Original post by mqt
yeah, it's seems to be a trend that it's going to be based around the final extract...so stuff about trade agreements, trade liberalisation, globalisation etc etc is what we were told too...but not too specfic cause we can never be too sure...i'm going to revise some more and i'm going to have a go at that question you've put down :yes:
feel like exchanging some views/answers afterwards?:colondollar:


Basically the key points you put down for this question are
- Liberalisaing will mean more free trade is involved which is beneficial to any economy
- Also from this free trade the LDC's can create an CA (comparative advantage) by moving from the primary to secondary industry. This CA will mean countries can specialise in waht its best at.
- Also exporters gain from economies of scale and there is also poductive efficiency
- From this free trade there will be lower prices which consumers benefit from resulting in consumer surplus.

However
- LDCS need the type of globalaisation where the MDCS open up thier markets from the exports from the poor world.
- they also need to protect thier infant industries so they can gain economies of scale and becomre larger and more competitive in the long run.
- At the momment the rich countries want the LDCS to open up thier exports and FDI but the LDCS need to impse barriers as thier can be consequences from the FDI and investment from abroad.
Original post by koba-girl
what are the evaluative points for this topic though? :smile: x


ok well first we start off with what trade liberisation actually is

so trade liberilsation is basically the promotion of international trade by the reduction of barriers to entry (tariffs and non-tariff barriers)
Liberlisation can occur when economies within the same geographical area agree to eliminate tariffs on trade within the regional trade bloc

There are many reasons why they may wish to do this:

•

tariff free trade will reduce trade costs allowing countries to import cheaper goods as well as import cheaper raw materials for firms

•

this means that firms can reduce costs by importing cheaper materials thus reducing cost push inflation

•

firms will have access to larger markets allowing them to benefit from economies of scale

•

trade liberlisation will allow more competition into the domestic economy forcing domestic suppliers to improve efficiency in order to compete on a international level

•

economies can benefit from greater innovation and investment as members share knowledge and technology

•

monopoly power will be reduced as competition increases and hence consumers benefit from greater 'choice' and lower prices

•

economies can see increases in FDI as multi-national corporations from outside the area relocate to take advantage of tariff free trading



However, trade integration can have many consequences

•

Trade diversion means that economies formally trading from outside the free trade area will have to transfer trade from cheaper countries to less efficient economies inside the union

•

domestic economies may suffer due to being unable to compete with compeition - can lead to increased unemployment

•

some economies will benefit more than others

•

developing countries reliant on exports who are outside the area will be greatly affected

•

imports from outside the free trade area will be more expensive as the economy has to agree to a common tariff for non union members



so to conclude, trade liberalisation can have many benefits, but can also induce costs on economies within the union as well as outside the union
Original post by viksta1000
basically inflation is higher than interest rates

at the moment it can be said the interest rates in the UK are 'negative'

interest is only 0.5% whereas inflation is 5%, so we're 'losing out' by saving so people would rather spend, AD increase = short term economic growth? but is it worth it with high inflation...that's what the extracts are trying to get accross...that the short term Eurozone economic growth was at the expense of inflation


Thanks for dat man
Appreciated !
Original post by Hits1
Interest rates that fall below zero. The material suggests that monetary policy has been 'too loose' fueled by negative interest rates and so on. Therefore short-term growth has come at the expense of inflation..

I think....


Confused.com lol
Reply 218
Avatar for koba-girl
koba-girl
Original post by viksta1000
ok well first we start off with what trade liberisation actually is

so trade liberilsation is basically the promotion of international trade by the reduction of barriers to entry (tariffs and non-tariff barriers)
Liberlisation can occur when economies within the same geographical area agree to eliminate tariffs on trade within the regional trade bloc

There are many reasons why they may wish to do this:

•

tariff free trade will reduce trade costs allowing countries to import cheaper goods as well as import cheaper raw materials for firms

•

this means that firms can reduce costs by importing cheaper materials thus reducing cost push inflation

•

firms will have access to larger markets allowing them to benefit from economies of scale

•

trade liberlisation will allow more competition into the domestic economy forcing domestic suppliers to improve efficiency in order to compete on a international level

•

economies can benefit from greater innovation and investment as members share knowledge and technology

•

monopoly power will be reduced as competition increases and hence consumers benefit from greater 'choice' and lower prices

•

economies can see increases in FDI as multi-national corporations from outside the area relocate to take advantage of tariff free trading



However, trade integration can have many consequences

•

Trade diversion means that economies formally trading from outside the free trade area will have to transfer trade from cheaper countries to less efficient economies inside the union

•

domestic economies may suffer due to being unable to compete with compeition - can lead to increased unemployment

•

some economies will benefit more than others

•

developing countries reliant on exports who are outside the area will be greatly affected

•

imports from outside the free trade area will be more expensive as the economy has to agree to a common tariff for non union members



so to conclude, trade liberalisation can have many benefits, but can also induce costs on economies within the union as well as outside the union



Thank you!!
That helped so much!!
How have you been revising, from the tutor 2 u?
or the text books?
I'm really scared for this exam :frown:
Original post by mqt
i have a question! :smile:...could you explain to me a reserve currency please :smile:


A currency widely traded and held in the foreign reserves by the central bank to pay of debts and imports. :smile:

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