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A2 Economics - F585 June 2013

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Original post by jmunger
really? how was the question pretty explicit in stating which other factors promoted economic growth seeing as it only mentioned international trade...?


You could be totally right, however I just find it hard trying to counter argue international trade as a driver, as international trade has clearly been one of the most significant drivers, as their international trade as a percentage of gdp is 155%. Ergo trying to argue that international trade wasn't the only key driver. This is what my teacher seemed to think anyways
Reply 881
Avatar for pjately
pjately
For eurozone question...i wrote about free movement of capital increasing AS. Is this a valid point?
Question, i am pretty sure that the diagram was supposed to show a left shift in LRAD which decreased GDP and inflation which was occuring.....

Then for the explanation on of the likely reasons is capital flight no?

people on here are saying thats the wrong explanation, but thats the one everyone put and im pretty sure thats right?
Original post by Ollie Warwick
You could be totally right, however I just find it hard trying to counter argue international trade as a driver, as international trade has clearly been one of the most significant drivers, as their international trade as a percentage of gdp is 155%. Ergo trying to argue that international trade wasn't the only key driver. This is what my teacher seemed to think anyways


i felt as though the question invited you to talk about other factors besides international trade. I talked about age structure and non-existant public debt, but hey, i might be wrong.
Reply 884
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JOR2010
14
Original post by Infamous12
i felt as though the question invited you to talk about other factors besides international trade. I talked about age structure and non-existant public debt, but hey, i might be wrong.


I agree. There was little in the way of concrete evidence that trade was the biggest factor, so I guess you had to bring in other things.

Posted from TSR Mobile
Question, i am pretty sure that the diagram was supposed to show a left shift in LRAs which decreased GDP and inflation which was occuring.....

Then for the explanation on of the likely reasons is capital flight no?

people on here are saying thats the wrong explanation, but thats the one everyone put and im pretty sure thats right?
Reply 886
Avatar for im7
im7
2
Original post by Ollie Warwick
You could be totally right, however I just find it hard trying to counter argue international trade as a driver, as international trade has clearly been one of the most significant drivers, as their international trade as a percentage of gdp is 155%. Ergo trying to argue that international trade wasn't the only key driver. This is what my teacher seemed to think anyways


I wrote that international trade as 155% of GDP may not mean it causes economic growth - 155% refers to the total imports AND exports, and if these are roughly equal then there is no contribution to growth as (X - M) is essentially zero, providing no addition to AD overall.
Original post by Infamous12
i felt as though the question invited you to talk about other factors besides international trade. I talked about age structure and non-existant public debt, but hey, i might be wrong.


that was the basis of the question! Saying whether trade was the MOST IMPORTANT , and then as the COMMENT you say why other things may have been more improtant than trade, such as the 'prudent macro policy' or the 'geography'

this is what i thought anyway
[INDENT]Question, i am pretty sure that the diagram was supposed to show a left shift in LRAs which decreased GDP and inflation which was occuring.....

Then for the explanation on of the likely reasons is capital flight no?

people on here are saying thats the wrong explanation, but thats the one everyone put and im pretty sure thats right?[/INDENT]




Original post by mandem2k11
that was the basis of the question! Saying whether trade was the MOST IMPORTANT , and then as the COMMENT you say why other things may have been more improtant than trade, such as the 'prudent macro policy' or the 'geography'

this is what i thought anyway


Original post by JOR2010
I agree. There was little in the way of concrete evidence that trade was the biggest factor, so I guess you had to bring in other things.

Posted from TSR Mobile


how did you guys approach the last question? (20 marker)

i talked about how econ growth can lead to sustainable development, then commented "however, it depends on"... Then i talked about other factors important for development and related it to Estonia and growth (coherent society, ecological balance and welfare) and ended with a conclusion.
Original post by im7
I wrote that international trade as 155% of GDP may not mean it causes economic growth - 155% refers to the total imports AND exports, and if these are roughly equal then there is no contribution to growth as (X - M) is essentially zero, providing no addition to AD overall.


Yes, although your theory is totally sound, it clearly states in extract 3 that exports have been a key driver for strong Estonia growth, ultimately indicating that exports have had a positive effect on Aggregate Demand and thus short run economic growth.
Reply 891
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jmunger
Original post by Ollie Warwick
You could be totally right, however I just find it hard trying to counter argue international trade as a driver, as international trade has clearly been one of the most significant drivers, as their international trade as a percentage of gdp is 155%. Ergo trying to argue that international trade wasn't the only key driver. This is what my teacher seemed to think anyways


yeah you're right, i did not try to show how trade didn't drive growth, so to speak, i simply just evaluated it saying depends on competitiveness of exports and saying what it depended on etc.
Reply 892
Avatar for im7
im7
2
Original post by Ollie Warwick
Yes, although your theory is totally sound, it clearly states in extract 3 that exports have been a key driver for strong Estonia growth, ultimately indicating that exports have had a positive effect on Aggregate Demand and thus short run economic growth.


It said that Estonia recovered from the recession through export-led growth in 2010 but it may not have happened from 2000-2007. Hoping they credit that point though, as there wasn't much evidence to suggest that international trade didn't cause the growth!
Original post by im7
It said that Estonia recovered from the recession through export-led growth in 2010 but it may not have happened from 2000-2007. Hoping they credit that point though, as there wasn't much evidence to suggest that international trade didn't cause the growth!


I swear the exam question said 2000-2010?? I probs wrong though
Reply 894
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im7
2
Original post by Ollie Warwick
I swear the exam question said 2000-2010?? I probs wrong though


I meant that in the case study it explicitly mentions export growth for Estonia in 2010 but not for the other years so you never know! But yeah I think the question said 2000-2010 probably because they wanted reference to figure 3.1
Original post by Ollie Warwick
I swear the exam question said 2000-2010?? I probs wrong though

yeah it was 2000-2010, and also I would have thought you had to say other factors, plus eatonia joined the eu in 2004 so trade wouldn't have really increased by then so growth surely must have been other factors?
Original post by physicshelp123
yeah it was 2000-2010, and also I would have thought you had to say other factors, plus eatonia joined the eu in 2004 so trade wouldn't have really increased by then so growth surely must have been other factors?


Exactly, I mentioned, FDI, competitive banking sector (low interest rates), strategic geographical position and flat rate tax system to reduce brain drain to ensure long run aggregate supply does not fall.
[INDENT]Question, i am pretty sure that the diagram was supposed to show a left shift in LRAs which decreased GDP and inflation which was occuring.....

Then for the explanation on of the likely reasons is capital flight no?

people on here are saying thats the wrong explanation, but thats the one everyone put and im pretty sure thats right?[/INDENT]




Original post by jordan6278
[INDENT]Question, i am pretty sure that the diagram was supposed to show a left shift in LRAs which decreased GDP and inflation which was occuring.....

Then for the explanation on of the likely reasons is capital flight no?

people on here are saying thats the wrong explanation, but thats the one everyone put and im pretty sure thats right?[/INDENT]






Yeah, but they said one factor, therefore it is likely to mean more than one. A reduction in AD due to a global economic crises is one, because a fall in exports takes time to feed through and to affect the inflation rate (the inflation rate in 2009 was much lower)
For the comment to the international trade question, I mentioned that an almost non-existent public sector debt level leads to the reduction in the supply of guilts (government bonds), which lead to a rise in the price of bonds, driving down their yields and hence cutting interest rates in the LR leading to an increase in investment. Is that right?

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