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

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Reply 560
Avatar for xChelsea
xChelsea
Original post by Hits1
Im getting fairly confused, it is Floating my bad jus researched it. Although why does the extract say part of thier decline in competitiveness stems from these economies having a 'fixed' exchange rate against other members of the euro area... whattt lol confused..


It's only fixed against other members of the eurozone but not against other currencies such as the dollar.
so shell i just keep going over
Fiscal policie
Exchange rate
Trade/protectionism
Flexible labour markets

is that it really?
Reply 562
Avatar for Hits1
Hits1
Original post by viksta1000
yeah I just read the extract he was on about...it says 'fixed against other member countries'

The Euro iteself is a floating currency

but the members cannot cause appreciation/depreciation in exchange rates against each other as they share the same currency :wink:


cheers buddy! Seriously this was also confusing me for some time and at least not going into the exam confused! thanks!
Reply 563
Avatar for Tickles
Tickles
tutor 2 u says its fixed???

Since autumn 1992, Britain has adopted a floating exchange rate system. The Bank of England does not actively intervene in the currency markets to achieve a desired exchange rate level.

In contrast, the twelve members of the Single Currency agreed to fully fix their currencies against each other in January 1999. In January 2002, twelve exchange rates become one when the Euro enters common circulation throughout the Euro Zone.
key words is 'against each other' to the above, against non-eu members its floating
Reply 565
Avatar for Hits1
Hits1
Original post by mqt
Thanks! Lol...That wouldv'e been another question i'd ask but you hit two birds with one stone ! :biggrin: thanks!


Hey I made a slight mistake, and the posts on the most recent page show why...

basically the euro is 'fixed' against other members within the EU as they share the same currency hence it cannot appreciate/depreciate

Whereas it is floating against other currencies such as the pound, dollar and so on!

Sorry about that, confused myself also!
Original post by viksta1000
yeah I just read the extract he was on about...it says 'fixed against other member countries'

The Euro iteself is a floating currency

but the members cannot cause appreciation/depreciation in exchange rates against each other as they share the same currency :wink:


So the decline in the competitiveness of the PIIGS was due to the 'fixed' exchange rate against other members ?
Reply 567
Avatar for xChelsea
xChelsea
Original post by Tickles
tutor 2 u says its fixed???

Since autumn 1992, Britain has adopted a floating exchange rate system. The Bank of England does not actively intervene in the currency markets to achieve a desired exchange rate level.

In contrast, the twelve members of the Single Currency agreed to fully fix their currencies against each other in January 1999. In January 2002, twelve exchange rates become one when the Euro enters common circulation throughout the Euro Zone.


It says against each other not against other currencies.
Original post by Tariq_3458
So the decline in the competitiveness of the PIIGS was due to the 'fixed' exchange rate against other members ?


yeh, and if spain wanted to devalue the exchange rate (and was allowed to, hypethetically). It wont have any effects at all on trade because it effects everyone equal so everything remains the same
can anybody give me proper evaluation points for trade? not just a balanced arguement evaluation, this only allows you to gain 15 marks
The other 5 marks is what i need
Original post by ajayhp
The biggest confusion i have is how integration even relates to free trade/trade liberalization? if some1 could explains this to me, i will rest in peace


I take it my explanation didn't help --> http://www.thestudentroom.co.uk/showpost.php?p=32385852&postcount=552

I'll try again


Basically, integration basically opens up the 'doors' to allow countries to trade, it cuts tariffs between different countries as well as reducing/eliminating non-tariff barriers. The reason you're confused at the moment is because when you think 'integration', you think EU, NAFTA, ASEAN...all regional trading blocs that have basically shut off the outside world with tariffs...so your thinking, how does that free up trade

But integration is not just limited to regional areas. For example, I can pretty much guarantee that the USA has some deals with China/Japan that allows for tariff free imports of certain goods...that is an example of integration

Its not until we develop fully integrated trade that we can have a fully 'free' trade system

trade liberalisation involved deregulating trade, removes barriers to entry....usually not directly linked to trade, so things like allowing foreign investors to invest, freehold properties for foreigners, enterprise subsidies etc This opens up opportunities for MNCs to move production, liberalisation promotes FDI....with liberalisation we can develop truly integrated trade patterns and hence a truly free trade system
How can the PIIGS recover and become more competitive? Also, what evaluation points are there for this kind of question.
Original post by Tariq_3458
So the decline in the competitiveness of the PIIGS was due to the 'fixed' exchange rate against other members ?


that was one of the factors yes

others are things like reducing productivity, high inflation, high wages etc
Reply 573
Avatar for A.Corona
A.Corona
Original post by mqt

Original post by mqt
sure inbox me your email :smile:...she sent it to us through email, although, someone on here sent it to me anyways :smile:


Hey I could use this toolkit tonight!! Be good for a quick overview, been using only my book and notes so far...
Reply 574
Avatar for xChelsea
xChelsea
Anybody got general arguements for/against globalisation
Original post by xChelsea
Anybody got general arguements for/against globalisation


allows technological spill overs,
allows more competition, increase supply, lower prices
Allows out sourcing so lower costs
static and dynamic effiency gains

but,
low skilled workers in developed country will lose jobs to devloping country due to out sourcing
short term can create more competition but long term many merges can takeplace and then a global monopoly is created
(edited 12 years ago)
Can I just point out aswell guys...keep your eye on the news...BBC/SKY/Bloomberg...as you might pick out a few arguments for tomorrow with the Greece huhaa going on at the moment


Good Luck folks! :biggrin:
(edited 12 years ago)
Reply 577
Avatar for xChelsea
xChelsea
Original post by Elponchis_LOL
allows technological spill overs,
allows more competition, increase supply, lower prices
Allows out sourcing so lower costs
static and dynamic effiency gains

but,
low skilled workers in developed country will lose jobs to devloping country due to out sourcing
short term can create more competition but long term many merges can takeplace and then a global monopoly is created


Thanks,
Could you explain technological spill overs and outsourcing please.
Original post by xChelsea
Thanks,
Could you explain technological spill overs and outsourcing please.


forgot technological spill overs! will need to look it up again

but outsourcing, is shifting production from one area to another due to it being cheaper. Basically exploiting countries comparative advantage. So primark will outsource their production to countries which have low labour costs
how does a depreciation of a currency increase inflationary pressures?!
hoping exchange rates doesn't come up..but it probably will do!

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