Ever since around the late 20th Century there has been a gradual decline in manufacturing in Western countries. Much of this was due to offshoring - multinationals setting up production bases in countries such as China and India to exploit low labour costs, so these countries became the new (and way more competitive) exporters of manufactured goods like textiles. For the UK, you could say the trade unions also made us less competitive, as they forced up unit labour costs.

Also countries such as Japan and South Korea have become formidable competitors in the technology sector, though the West is still a major producer of these goods, and much of the West have rebalanced their economies to the tertiary sector (services) and gradually, but not totally, away from the manufacturing sector (or secondary sector).

Hope that helps :smile:

Reply 265

Parkway Drive

9

Original post by Axion

Lol bro they couldnt ask that as the UK aint in the eurozone

He dodged the bullet there mate lol. Imagine if the question actually came up about the UK joining the Eurozone. He'd be so confused.

Reply 266

Skilled

16

Original post by gasgang

what is this based on?

Ray Powell's talk in our school + teachers word, they matched up, Ray Powell is really bad at hiding stuff =D

Reply 267

Axion

15

Original post by Skilled

Ray Powell's talk in our school + teachers word, they matched up, Ray Powell is really bad at hiding stuff =D

Except Ray powell didn't write the exam :wink:

Reply 268

Lako

Are there any other diagrams to know other than:

AD/AS
LRAS
SRPC/LRPC
Tariff Impact + Quota Impact
J-Curve
Absolute/Comparative Advantage
Trend rate of growth/Output gaps
"Crowding out"
Laffer Curve
Lorenz Curve

Reply 269

qr95

20

Original post by Lako

Are there any other diagrams to know other than:

AD/AS
LRAS
SRPC/LRPC
Tariff Impact + Quota Impact
J-Curve
Absolute/Comparative Advantage
Trend rate of growth/Output gaps
"Crowding out"
Laffer Curve
Lorenz Curve

The cost push and demand pull inflation diagram might be useful

(edited 10 years ago)

Reply 270

Lako

Original post by qr95

The cost push and demand pull inflation diagram might be useful

Is that not just the AD/AS but with shifts in either of the curves depending on the type of inflation?

Reply 271

Skilled

16

Original post by Axion

Except Ray powell didn't write the exam :wink:

He is the Chief or just below Chief examiner so I'm guessing that he knows something :smile:

Reply 272

Axion

15

Original post by Lako

Are there any other diagrams to know other than:

AD/AS
LRAS
SRPC/LRPC
Tariff Impact + Quota Impact
J-Curve
Absolute/Comparative Advantage
Trend rate of growth/Output gaps
"Crowding out"
Laffer Curve
Lorenz Curve

what's the crowding out diagram?

Reply 273

Axion

15

Original post by Skilled

He is the Chief or just below Chief examiner so I'm guessing that he knows something :smile:

fairrrrrrrrrrr enough

why did he go to your school O.o?

Reply 274

Skilled

16

Original post by Axion

fairrrrrrrrrrr enough

why did he go to your school O.o?

He goes to lots of schools to give advice and talk in general about some important topics and how people should try not to ignore topics

Reply 275

Axion

15

Original post by Skilled

He goes to lots of schools to give advice and talk in general about some important topics and how people should try not to ignore topics

Lol, i ignored half of unit 3 and wasn't disadvantaged :P

Reply 276

Lako

It shows how increased government borrowing reduces private investment because interest rates rise. It's not essential but might be useful if you're aiming for a level 5.

The wikipedia page explains it fairly well: http://en.wikipedia.org/wiki/Crowding_out_(economics)

Reply 277

Axion

15

Original post by Lako

It shows how increased government borrowing reduces private investment because interest rates rise. It's not essential but might be useful if you're aiming for a level 5.

The wikipedia page explains it fairly well: http://en.wikipedia.org/wiki/Crowding_out_(economics)

Think I'll give it a miss :P

Reply 278

Ahad009

Original post by Axion

Think I'll give it a miss :P

You don't necessarily have to draw a diagram in the 25 marker to explain that. You could just say that increases government borrowing results in an increase in interest rates in the medium term. This is because in order for the government to gain buyers of 'debt' which is in the form of bonds or national savings certificates, they increase Interest rates in order to incentivise buyers. The rise in interest rates crowds out private sector investment due to the cost of higher borrowing meaning businesses are less inclined of taking out loans to finance investment projects. However, you could argue that if government borrowing does successfully lead to a stimulation of aggregate demand then business confidence may increase and they may be inclined to take out loans to finance loans regardless of the interest rate. Hope that helps. XD

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Reply 279

Ahad009

to finance projects* sorry typo.

Posted from TSR Mobile

AQA Economics Unit 4 11th June 2013

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