F581/ F582 Economics June 2013

Original post by iggyDash

Thanks for the past paper been looking for it for a while.

Since your generosity shall help you to :biggrin:

So for definitions look at the specification http://www.ocr.org.uk/Images/67693-specification-version-3-july-2008.pdf

So Look on it you can see all the definitions you need to no on each sub topic, make flash cards for them and memorize them

The specification also has trigger words e.g explain and discuss so you have an idea on what you need to know for example "discuss how changes in aggregate demand and aggregate supply may affect output, unemployment and inflation."

If anyone needs anymore help let me know :-)

Also do lots of past papers. every single one since some questions are very similar

No worries, glad to help others out for a change since I'm usually the one having trouble finding the most recent past papers! Haha.

Thank you very much! Seems I didn't go through the whole of the OCR GCE Economics page fully to see that there was a specification pack. :tongue:

Reply 103

>Username<

19

Original post by SherlockHolmes

A budget deficit occurs when government spending exceeds tax revenue. A cut in tax rates should decrease tax revenue and therefore lead to a budget deficit.

If you don't mind please could you explain the steps between all that. Its a 6 mark question, so what else could I write?

I understand what you said however people would spend more therefore wouldn't the budget balance go up?

Reply 104

heirloom

14

Original post by >Username<

Please can someone explain this question to me:

Comment on whether a cut in tax rates will always result in a budget deficit.

It depends on how big the cut is. Could encourage people into work and off unemployment benefits. Do you know if the question is referring to regressive or progressive tax?

Reply 105

>Username<

19

Original post by heirloom

It depends on how big the cut is. Could encourage people into work and off unemployment benefits. Do you know if the question is referring to regressive or progressive tax?

But if it encourages people into work then why would there be a deficit? And I'm not sure which tax the question is referring to. :s-smilie:

Reply 106

heirloom

14

Original post by >Username<

But if it encourages people into work then why would there be a deficit? And I'm not sure which tax the question is referring to. :s-smilie:

You have to say why it wouldn't always cause a deficit. Thats what comment means. You state an argument in favour of the statement and then one against it

Reply 107

>Username<

19

Original post by heirloom

You have to say why it wouldn't always cause a deficit. Thats what comment means. You state an argument in favour of the statement and then one against it

I know that, lol. I just don't understand what the actual question is asking. :s-smilie:

If tax rates are cut. Then people have more money to spend. So surely there would be an decrease in the trade deficit?

I get that there would be less taxes but I just don't know how to compose an answer...

Reply 108

heirloom

14

Original post by >Username<

I know that, lol. I just don't understand what the actual question is asking. :s-smilie:

If tax rates are cut. Then people have more money to spend. So surely there would be an decrease in the trade deficit?

I get that there would be less taxes but I just don't know how to compose an answer...

It's not talking about a trade deficit its talking about a budget deficit. When government spending is more than government revenue

Reply 109

Comment on whether a cut in tax rates will always result in a budget deficit.

A budget deficit occurs when government expenditure exceeds the revenue the government receives from taxes. A cut in tax rates would change the balance between the two, as tax revenue would fall (let's say tax revenue is T and expenditure is E), causing (T - E) to fall assuming ceteris paribus. A cut in tax rates would also effect other components of AD such as Consumer Expenditure, as it may cause it to increase. This may also influence how much the Government receives from the tax revenue; as consumers may choose to spend more money which could result in tax revenue received staying possibly the same. However, this will all depend on the initial position of the budget balance, as the tax revenue may be far higher than the Government Expenditure, meaning that depending on the size of the cut in tax rates, it may make no difference to the overall budget balance. It also depends on what happens to the Government Expenditure thereafter, as the Government may opt to spend less money as a result of the cut in the tax rates, which may offset the budget deficit from occurring. Therefore, a cut in tax rates does not always cause a budget deficit, as it depends on other key factors.

(edited 10 years ago)

Reply 110

SherlockHolmes

13

What would the analysis be for 'Comment on whether a fall in unemployment rate should lead to economic growth.'?

Reply 111

Original post by SherlockHolmes

What would the analysis be for 'Comment on whether a fall in unemployment rate should lead to economic growth.'?

how many marks is the question worth? 6, 7 or 8?

Reply 112

OP

Original post by SherlockHolmes

What would the analysis be for 'Comment on whether a fall in unemployment rate should lead to economic growth.'?

argument for why it would lead to growth :

- more people employed
- more disposable income for consumers
- increase in consumption which in turn increases aggregate demand , increasing Real National Output

Alternatively you could say that more people employed means a larger labour force for firms hence they can expand productive capacity hence improving economic growth.

Then Arguments for why it wouldn't necessarily lead to growth :

- depends on size of fall in unemployment rate
- if other components of AD act in other direction to consumption , then AD decreases thus Growth would not occur
- depends on what the unemployment rate originally was

cannot think of any other comments at the minute though lol

Reply 113

SherlockHolmes

13

Original post by CTArsenal

how many marks is the question worth? 6, 7 or 8?

This question is worth 6 marks.

Original post by Fas

...

Thanks a lot Fas. I think you have covered everything!

However, I thought unemployment rate meant unemployment is still increasing but at a slower rate rather a decrease in unemployment?

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

(edited 10 years ago)

Reply 114

Original post by SherlockHolmes

This question is worth 6 marks.

Thanks a lot Fas. I think you have covered everything!

However, I thought unemployment rate meant unemployment is still increasing but at a slower rate rather a decrease in unemployment?

nope, you'd be on the right track if you were talking about inflation, but the unemployment rate is 'The percentage of the labour force who are out of work, but are willing and able to work.'

(edited 10 years ago)

Reply 115

OP

Original post by SherlockHolmes

This question is worth 6 marks.

Thanks a lot Fas. I think you have covered everything!

However, I thought unemployment rate meant unemployment is still increasing but at a slower rate rather a decrease in unemployment?

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

nah - as the above poster said if it was on about the inflation rate then , yes you'd be correct.

but the unemployment rate is just the percentage of the labour force out of work , so a reduction in that means that theres a reduction in the percentage of the labour force out of work - thus more are employed :smile:

Reply 116

Original post by Fas

nah - as the above poster said if it was on about the inflation rate then , yes you'd be correct.

but the unemployment rate is just the percentage of the labour force out of work , so a reduction in that means that theres a reduction in the percentage of the labour force out of work - thus more are employed :smile:

It doesn't necessarily mean more are employed - because a fall in the unemployment rate may mean that the unemployed have either emigrated to another country, or they've retired and are no longer part of the labour force.

In this question you'd probably be able to mention that in the evaluation I guess.

Reply 117

OP

Original post by CTArsenal

It doesn't necessarily mean more are employed - because a fall in the unemployment rate may mean that the unemployed have either emigrated to another country, or they've retired and are no longer part of the labour force.

In this question you'd probably be able to mention that in the evaluation I guess.

aye very true - or maybe the actual labour force has just increased ! definitely a bunch of stuff for good evaluation there.

what do we think is gonna be the essay on Monday then ? Im HOPING its along the lines " Discuss the effectiveness of Fiscal/monetary/supply-side policies in reducing unemployment " as unemployment hasn't come up in ages and that would be a nice one to answer.

really hoping it;s not like the Jan 2013 one which was about decreasing AS , and knowing OCR they'll do something like " Discuss why being unemployed is a good thing " :tongue:

Reply 118

Original post by Fas

aye very true - or maybe the actual labour force has just increased ! definitely a bunch of stuff for good evaluation there.

what do we think is gonna be the essay on Monday then ? Im HOPING its along the lines " Discuss the effectiveness of Fiscal/monetary/supply-side policies in reducing unemployment " as unemployment hasn't come up in ages and that would be a nice one to answer.

really hoping it;s not like the Jan 2013 one which was about decreasing AS , and knowing OCR they'll do something like " Discuss why being unemployed is a good thing " :tongue:

yeah exactly :tongue:

I'm hoping that in the paper they repeat a couple of the definitions questions found in the past papers as well, considering they haven't had a single paper that has had the same definition question as another! Good ones would be aggregate demand, aggregate supply, GDP etc. :biggrin:

I would love if the 18-marker is about the effectiveness of a demand-side policy, since I feel more confident answering them over the supply-side policy and tend to get more marks when doing mock essays, since I miss out quite a bit of information with supply-side when under pressure :facepalm:

.

Reply 119

OP