AQA Economics AS May 2015

I thought a missing market, was one which was not provided at all. For that reason i thought it couldnt be B due to the fact the market still provides the good, but overprovides.

Intitially i picked D because if a government didnt subsidise then the agricultural farmers may not make income, go bump, and then no longer supply to the market, hence 'missing market'.

Would there always be an option out of the 2 to do an externalities one such as alcohol/healthcare/merit or demerit goods ???? That is all I can do. I hope something like that turns up!!

Start with an introduction - briefly outlining the motivation, definitions, significance, perhaps recent or historical events that relate to the question. Move on to the main body of your essay using the conventional theory you have learned so, a very simple example, the question asks you about the effect of expansionary monetary and fiscal policies, so basically show the effects using a graphical or algebraic analysis, thereafter you need to critique what you have just wrote. So, for example suppose you said that cutting interest rates would stimulate aggregate demand, and that increasing government spending would also stimulate demand, you need to now question the viability of these claims. Here is a brief list of possible evaluations:

Monetary Policy

Time Lags
Rules VS Discretion
Lucas Critique
Zero-Lower Bound
Rational Expectations
The Importance of Communication
New dimensions post-crisis i.e. QE, Macroprudential etc
Endogenous money supply - reserve-requirements have little effect
Monetary policy is ineffective under a fixed exchange rate regime (Trillema)(Sterilization)
Money neutrality in the long-run

Fiscal Policy

Ricardian Equivalence
Rational Expectations
Slopes of supply and demand
Shadow market - higher taxes (may) result in evasion/avoidance
Politically difficult
Flexible exchange rates make it less effective
Effect depends on the nature or magnitude of private debt in the economy
Laffer Curve
Debt overhang? Austerity exacerbates the problem?

Hope this helps. Good Luck.

Would you mind explaining a few of these?

Any in particular?

Money neutrality in the long-run
Endogenous money supply - reserve-requirements have little effect
Lucas Critique
Ricardian Equivalence
Flexible exchange rates make it less effective

Cool. I'm just referencing my dissertation, i'll explain them shorty.

I reckon it's about time London 2012 came up in a question context.


Posted from TSR Mobile

Start with an introduction - briefly outlining the motivation, definitions, significance, perhaps recent or historical events that relate to the question. Move on to the main body of your essay using the conventional theory you have learned so, a very simple example, the question asks you about the effect of expansionary monetary and fiscal policies, so basically show the effects using a graphical or algebraic analysis, thereafter you need to critique what you have just wrote. So, for example suppose you said that cutting interest rates would stimulate aggregate demand, and that increasing government spending would also stimulate demand, you need to now question the viability of these claims. Here is a brief list of possible evaluations:

Monetary Policy

Time Lags
Rules VS Discretion
Lucas Critique
Zero-Lower Bound
Rational Expectations
The Importance of Communication
New dimensions post-crisis i.e. QE, Macroprudential etc
Endogenous money supply - reserve-requirements have little effect
Monetary policy is ineffective under a fixed exchange rate regime (Trillema)(Sterilization)
Money neutrality in the long-run

Fiscal Policy

Ricardian Equivalence
Rational Expectations
Slopes of supply and demand
Shadow market - higher taxes (may) result in evasion/avoidance
Politically difficult
Flexible exchange rates make it less effective
Effect depends on the nature or magnitude of private debt in the economy
Laffer Curve
Debt overhang? Austerity exacerbates the problem?

Hope this helps. Good Luck.

I reckon it's about time London 2012 came up in a question context.


Posted from TSR Mobile

Why have you included so much stuff that's irrelevant to AS economics?