Post Your Economics Question Here

Original post by TonySoprano96

Hi

got a 4 mark question: "Explain how a fall in unemployment could occur at the same time as a fall in the employment rate".

Now, I imagine this is quite easy for some of you but this really confused last night, I spent hours googling it but didn't really find anything relevant and can't contact teacher atm.

What I don't understand is how they are not in direct proportion to each other, so if employment goes up surely unemployment goes down. Is it to do with previously discouraged workers? I don't have a clue

Would be really greatful for someone to explain this to me as if i were a retarded 5 year old and in your explantation feel free to go beyond 4 marks lol.

thank

You have to remember that there are economically inactive workers too - those who are not in employment and whose situation is not considered unemployed.

A fall in the employment rate means that the number of people employed, in proportion to the number of people both employed and unemployed, decreases. This could be as a result of either more people becoming unemployed; more people become economically inactive who were previous employed; or the labour force (number of people employed + number of people unemployed) increasing.

Clearly, it cannot be the third reason, as the employment rate and the number of people unemployed has decreased, so the reason for the fall in the rate of employment could either be because more people are unemployed, or economically inactive.

Meanwhile, if many unemployed people become economically inactive, and no longer actively seek work, then the number of people unemployed will also decrease.

Hope this helped - it's a bit of a dodgy explanation but basically, you need to also consider the people who are/become economically inactive.

Reply 2705

zaini101

Original post by TonySoprano96

Hi

got a 4 mark question: "Explain how a fall in unemployment could occur at the same time as a fall in the employment rate".

Now, I imagine this is quite easy for some of you but this really confused last night, I spent hours googling it but didn't really find anything relevant and can't contact teacher atm.

What I don't understand is how they are not in direct proportion to each other, so if employment goes up surely unemployment goes down. Is it to do with previously discouraged workers? I don't have a clue

Would be really greatful for someone to explain this to me as if i were a retarded 5 year old and in your explantation feel free to go beyond 4 marks lol.

thank

could it be the situation where the government abolishes the National Minimum Wage (so basically firms pay workers whatever they want)
This would mean firms would emply more labour since it'll be more cheaper for them as there is no govt law demanding workers to be paid a certain amount.. Hence unemployment will fall

On the other hand, some people may think it is unfair and thus quit their job because theyre not being paid as desired. As a result because of low wage employment rate falls

thanks edryone

Can the strategic form be ‘solved’ using iterated elimination of dominated
strategies (IEDS)? If yes, how?

Reply 2708

WTSFG

What is the difference between Edexcel AS Unit 1 Economics paper 6EC01/01R & 6EC01/01

Reply 2709

eatthetree

4

What are mixed economies and why are there mixed economies? Doing edexcel as economics

Many thanks

Reply 2710

Chriswuk

5

Original post by eatthetree

What are mixed economies and why are there mixed economies? Doing edexcel as economics

Many thanks

No one is going to answer the question for you from scratch. You should write your own ideas down, and then that gives someone a platform to build upon.

Reply 2711

icecreamcake

15

Hiya

could you all please help me to make a decision? I want to study economics at uni.

I need to decide whether to take S3 or M3 for my 6th Further Maths module. I know statistics is more useful for economics, but I feel like I'll get a better mark with M3. So my question is, do you know how much S3 is involved in the economics course at uni? Because if there's a lot of S3 that I need to know, I'm probably going to take S3. However, if S3 isn't that essential, I'll take M3.

Thanks!

Posted from TSR Mobile

Reply 2712

newfreshstart

"Evaluate the extent to which government spending on education is the best way to promote the rate of growth in the economy"
how would i answer this? any help would be greatly appreciated :smile:

Reply 2713

newfreshstart

"Evaluate the extent to which government spending on education is the best way to promote the rate of growth in the economy"

(30 marks)

how would i answer this? any help would be greatly appreciated :smile:

Reply 2714

Original post by PPF

Can the strategic form be ‘solved’ using iterated elimination of dominated
strategies (IEDS)? If yes, how?

Do you have a particular payoff matrix in mind? If one row/column is strictly dominated by another then you can eliminate that row/column because a player would never play it. Therefore, you should be able to end up at your Nash Equilbrium.

Reply 2715

Original post by eatthetree

What are mixed economies and why are there mixed economies? Doing edexcel as economics

Many thanks

Its a mix between a free or command economy (http://learneconomicsonline.com/Markets.php)

Reply 2716

Original post by strawberrysnow

Hiya

could you all please help me to make a decision? I want to study economics at uni.

I need to decide whether to take S3 or M3 for my 6th Further Maths module. I know statistics is more useful for economics, but I feel like I'll get a better mark with M3. So my question is, do you know how much S3 is involved in the economics course at uni? Because if there's a lot of S3 that I need to know, I'm probably going to take S3. However, if S3 isn't that essential, I'll take M3.

Thanks!

Posted from TSR Mobile

What kind of uni? Russell Group, Oxbridge, other?
At Cambridge doing S3 would really help with the stats module. My friends who did it find Stats a doddle, whereas if you haven't done it then you'll have to take time to learn it (time you dont have!)

Reply 2717

Original post by newfreshstart

"Evaluate the extent to which government spending on education is the best way to promote the rate of growth in the economy"

(30 marks)

how would i answer this? any help would be greatly appreciated :smile:

In the short run hiring teachers, building schools, buying books, etc will boost the economy, and reduce the unemployment rate. It will have a multiplier effect (http://learneconomicsonline.com/nadas.php#multiplier) if we assume that the multiplier is greater than 1 (this could be an evaluation point) and should boost output (this is a demand-side effect).

In the long run it will affect the supply side, shifting AS rightwards, because we have a more clever workforce.

This can be evaluated by saying that there is a time lag; it might be quicker/easier/cheaper/more effective for the government to spend money elsewhere (infrastructure perhaps); the multiplier might not be above 1 (although the IMF have calculated it to be in the range of 0.9-1.8 during the Great Recession); crowding out may occur (see below), but again this is unlikely to occur during a recession. You could also argue that an increase in spending may not actually lead to an increase in educational attainment, for example teachers may just get paid more, rather than hiring more, from the budget increase, or maybe students are unwilling to learn.

Crowding Out and Ideology – there is an argument that too much government involvement reduces the ability of the private sector to operate due to financial crowding out (when the government borrows so much money that it causes interest rates to rise for private firms, who then have increased costs) and because of resource crowding out (the government increases demand for things such as labour, resources and land, thus causing higher prices for all, including private firms). But this problem is only an ideological one, a country has to decide the balance between the state sector and the private sector. Some countries such as Sweden manage to do this successfully, having a large state sector and a smaller private sector co-existing. However on the other hand, a country doesn’t want to increase the state sector so much that it becomes a communist state, as this opens up a whole can of worms. Similarly having a completely laissez-faire free market can cause problems, mainly in the distribution of income and for consumers as well as the environment. If this balance is successful and the government does a good job of running the industries it owns then there shouldn’t be a problem with crowding out. Furthermore the issue of crowding out should only become a problem at or near to full employment. If the economy is operating at slack then there should be room for demand to increase without increasing the price (or not by very much). Additionally, the government can borrow at a rate much lower than the private sector, which would result in lower costs.

Hope this helps,
Rhys

Reply 2718

Goldenparadise

10

Hello guys can help me with an inter-temporal graph I'm confuse so please don't judge me.

Suppose Mr A in period 1 inherited a gift of 200 and he has Y1= 500. In period two the income is 440. Mr A leaves a bequest of 110 to his children. Mr A saves 140 in period one. The interest rate is 10%.

1. Write the budget in period 1 in period 2 and the intertemporal budget indicating levels of consumption in each period. Graph Mr A’s equilibrium
2. Assume that the interest rate increased. Carefully explain and illustrate the income and substitution effects and show graphically what the equilibrium if the income effect is stronger than the substitution effect.
3. Assume that the interest rate increased. Carefully explain and illustrate the income and substitution effects and show graphically what the equilibrium if the income effect is weaker than the substitution effect.

Answer: 1 Y1+Gift = C1 +S 500+200 = C1+140 Thus C1 = 560
Y2- Bequest + S (1+r) = C2 440-110 + 140*1.1 = C2 C2=484
Inter-temporal budget : Y1+Gift + {(Y2-Bequest) (1+r) } = C1 + {C2/(1+r)}
500+200 + (440-110)/1.1 = 560 + 484/1.1 1000 = 1000
I know how to graph this one, however I'm a bit confuse how to do question 2 and question 3 graphically (I'm really horrible at graphs. I did the first and paste it so you get an understanding of what I was trying to achieved.

Reply 2719

member1753327