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

yh at least 1 10 mark will be on fiscal stimulus cos its mentioned a lot in the extract
and
yh competivness but will be linked like discuss the extent to which the loose monetary setting lead to a fall in competiviness.

lol i just made that up but would the answer be inflation causing unit labour costs to go up?

and on the other hand it was borrowing that PIIGS were doing which leads to a negative mulipler when the money stops i.e spain and construction unemployment was high which meant productivity was low and unit costs went up?

Go for it!

I agree it is not that important BUT it shows stellar evaluation if you can say why you do not trust the figures in the table!

Example:

Explain possible policies that country X may have followed to come out of the recession in ....'

Answer:

The policies they may have followed were....but the data shown by (name of source) shows that they did NOT come out of the recession and thus the policies must have taken time to work

what is a negative multiplier effect?

yh at least 1 10 mark will be on fiscal stimulus cos its mentioned a lot in the extract
and
yh competivness but will be linked like discuss the extent to which the loose monetary setting lead to a fall in competiviness.

lol i just made that up but would the answer be inflation causing unit labour costs to go up?

and on the other hand it was borrowing that PIIGS were doing which leads to a negative mulipler when the money stops i.e spain and construction unemployment was high which meant productivity was low and unit costs went up?

anybody know how and where j-curve comes into this??

andd the effect of inflation can't depreciate euro because it's fxed rightttt...???

confused.com!

anybody know how and where j-curve comes into this??

andd the effect of inflation can't depreciate euro because it's fxed rightttt...???

confused.com!

you would talk about interest rates and how they are too low, this caused the economy to grow for the PIIGS more than average, increased FDI from abroad, over heating of the economy and then this led to inflation. according to the PPP theory, inflation can be corrected by a devaluation in the exhnage rate, but ofc these countries do not have that option so instead the strain is taken on the real economy as jobs are lost. less workers means increased unit cost of labour and less output and then this would be a cause of the fall in competitvness. However, another reason would be the huge gov't debts, although not directly linked to the loose monetary policy, it is in that gov't has no other chpice but to borrown because they cannot exercise their monetary policy. increase debt would maybe lead to lack of consumer confidence thus decrease in AD?

lol is that right? and what else would you put?

euro isnt fixed, its floating

i think you could argue that increase in taxes will lead to competitivness to go down as compared to loose monetary policy setting

also wid the goverment debt i rekon firms will lose business confidence as they feel banks wont lend to this economy due to high debts and if banks are not confident in lending then competivnes in that economy will go down?

increase in what taxes?

is the euro fixed against other countries who use the euro/


and floating for other countries e.g. Austrailia

corporation

i thought you asked about loose monetary policy, taxation is fiscal stimulus

the euro isnt fixed at all its floating against other currencies, but it is 'fixed' in the sense that countries that are part of the euro cannot change/ devalue it. it is floating in the global market just that euro countries have no control over is devaluation, make sense?

For judgments, would you guys recommend just going, "[X] will cause [Y] because of [supporting evidence that doesn't just regurgitate what you've already written]" or something more like "I believe that [X] will occur because of [supporting evidence]"?

Also, what time is everybody planning on sleeping?

but a reason to suggest its not the loose monetary policy