AQA Economics Unit 4 11th June 2013

The Single European Market is a Customs Union with a CAT (Common Ex Tariff)
The Eurozone is a Currency Union

Not stepping on Kelbels Toes or anything :P Just knew the answer, i also did well at AS (100ums in Macro and 85 in Micro) and have strong knowledge at A2, more than happy to help

Oh right, yeah, sort of. It's just because Unit 2 and 4 are very similar, my class think. I got 100/100 UMS in Econ 3 in Jan.. I wouldn't have exactly called it a dream, much harder if you were sitting the exam on the day I think! Much easier when you're looking at past papers at home lol! Luckily for me, I was hot on Oligopoly for the data question

Trust me, I'd have swapped exams in a heart beat, i was very strong on the Concentrated Market section and did the Jan paper as a mock, it was lovely
The first section in June was horiffic, well done

It's just all about what comes up, you found it easy because you were good on that section maybe I'd have found your paper easy in June, we'll never know! Just happy I've secured my 100 lol! x

Happy for you too haha, its a great feeling, takes the pressure off for the A overall and puts you in good position for the A*

It's just all about what comes up, you found it easy because you were good on that section maybe I'd have found your paper easy in June, we'll never know! Just happy I've secured my 100 lol! x

No chance you would have found the June paper easy

Hiya, Could you please explain quantitative easing to me...

Most of the capital held by high street banks to back their loans to customers takes the form of UK government bonds bought by the banks on the bond market. With QE, the BoE buys these illiquid bonds from the banks, paying for them with the liquid 'new money' that QE creates. It basically means that the BoE is giving high street banks money in the hope that it will lend out more of it to consumers and businesses, however, this hasn't happened.

You can talk about it as a part of monetary policy. It's a good policy to talk about because it has been done by the government in recent years and you can easily point out the flaws in the idea (such as the one I have pointed out that banks did not use this new money to lend to businesses) for evaluation points. Hope this helped

That's pretty good but there's a bit more to it.
If you want some more analysis/evaluation points.

Quantitative Easing increases the demand and hence the price of bonds.
This reduces the rate of return for investors. Pension funds are major investors in bonds so there's a potentially large negative impact. You can take that as far as you like given that reduced pensions will hit consumption.
There's also a risk of short term inflation (potentially hyper inflation) due to an increase in the money supply - that's the monetarist theory of inflation anyway.
In the long term the bank is supposed to sell off the bonds and destroy the money it receives for them. Therefore there's no long term increase in the money supply. You could however question when and if this will happen though.

what would be the macroeconomic performance for the UK economy if they left being a member of the EU?

Yeah those are points I would also bring in but I tried to make it as simple as possible to explain the basic concept and any possible flaws because all that information above might be a bit hard to digest if you don't understand the basic principle of QE. Good analysis/evaluation though.

That's pretty good but there's a bit more to it.
If you want some more analysis/evaluation points.

Quantitative Easing increases the demand and hence the price of bonds.
This reduces the rate of return for investors. Pension funds are major investors in bonds so there's a potentially large negative impact. You can take that as far as you like given that reduced pensions will hit consumption.
There's also a risk of short term inflation (potentially hyper inflation) due to an increase in the money supply - that's the monetarist theory of inflation anyway.
In the long term the bank is supposed to sell off the bonds and destroy the money it receives for them. Therefore there's no long term increase in the money supply. You could however question when and if this will happen though.

Yeah those are points I would also bring in but I tried to make it as simple as possible to explain the basic concept and any possible flaws because all that information above might be a bit hard to digest if you don't understand the basic principle of QE. Good analysis/evaluation though.

Thanks very much to both of you! And QE can be brought into an essay when talking about how the government could boost the economy/ use MP to get out of a recession/increase growth etc?

The Single European Market is a Customs Union with a CAT (Common Ex Tariff)
The Eurozone is a Currency Union

Not stepping on Kelbels Toes or anything :P Just knew the answer, i also did well at AS (100ums in Macro and 85 in Micro) and have strong knowledge at A2, more than happy to help