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OCR A2 Economics - F585 Global Economy - Case Study Thread

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Anyone what would your answer be to the question 'should Greece default on its debts?'

Points for and against?

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Reply 141

eawilliams

Original post by Legend12

Thanks a lot! Really cleared a lot of things up for me.

I have a feeling that it may come up, the other glaringly obvious one would be "discuss whether FDI is the best way for a country to develop". Aside from that, there are 2 more that may throw a spanner in the works.

"Discuss whether Greece should have been in the Monetary Union"
"Discuss whether defaulting would be the best solution for Greece".

I would hate it if any of them came up at all!

Same! I agree, the monetary union essay question is very likely (which is a bit upsetting as I enjoyed this the least, ahh)
I am not as confident due no past papers ): I can't even spot trends in the questions because we don't have any.. sucks :/

Reply 142

eawilliams

Original post by 95pc1

Anyone what would your answer be to the question 'should Greece default on its debts?'

Points for and against?

This was posted from The Student Room's iPhone/iPad App

I have points for against but not for ):

Against:

-Effects of a default could potentially cause a Bank Collapse
-Decreased funding from ECB
-Domino effect - other governments within crisis (Spain, Ireland and Italy to a lesser extent) may be under pressure to default by their citizens who oppose the austerity measures put in place...

Reply 143

Md111

Ok guys i need some help. I am really panicking about this exam and i've signed up now specifically to ask this. I know basic theory etc but i'm struggeling to think of analysis and evaluation. Can someone please help me with Austerity, ODA, FDI and Fixed exchange rate. As if ready to write a 20m. The ocr text book has nothing that i can see on Austerity. Please any help would be great

Reply 144

radiopred

Time i started revising economics

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Reply 145

king101

Original post by Md111

Im on phone so one thing i can tell u is..ODA is AID..AID IS FREE MONEY and that promoted E.D as.... etc

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Reply 146

Md111

Original post by king101

Im on phone so one thing i can tell u is..ODA is AID..AID IS FREE MONEY and that promoted E.D as.... etc

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Ok. Can you use the likes of charities buying products as aid subsequently putting domestic firms then out of business.... or is it simply official, IMF and other countries etc...

Reply 147

king101

Original post by Md111

Ok. Can you use the likes of charities buying products as aid subsequently putting domestic firms then out of business.... or is it simply official, IMF and other countries etc...

Yeh that would be a valid point about charities.

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Reply 148

bad8oy

Original post by king101

Yeh that would be a valid point about charities.

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Good luck 2morrow bro

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Reply 149

iggyDash

Original post by bad8oy

Good luck 2morrow bro

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You ready ?

Reply 150

king101

Original post by bad8oy

Good luck 2morrow bro

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Hahaa thanks mate u too :smile:

im just in bed reading tsr posts, cant sleep lol :smile:

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Reply 151

JasonKYW

Original post by Md111

Well for fixed exchange rates you just want to know that they reduce uncertainty thus risk which encourages firms to invest more since they'll be more confident. They also result in hedging so the need to reduce uncertainty has been reduced since they can reduce the losses from firms etc. Problems would be that it is inflexible, governments need to hold foreign currency reserves to maintain the fixed exchange rate and the opportunity cost would be the gain from interest rates. Linking exchange rates and monetary policy will be problematic because the use of interest rates will result in the fixed level not being achieved.... Pretty sure I'm missing something out but that's what I can think of so far.

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Reply 152

t00 g00d for u

Original post by eawilliams

Points for?
Massive f you to all lenders. Similar to claiming bankruptcy, they don't need to pay back their payments. Clean slate in that gvt revenue can be used on solving Greeces structural problems.

However linking on to points against:
Defaulting would increase the perceived risk of Greece 100000x fold, meaning any future gvt bonds will cost them an arm and a leg ( that's if they aren't barred from accessing financial markets a la Argentina) , thus investment projects are made more difficult. Interest rates are high. Deflationary effect blah blab blah