Edexcel AS Economics Unit 2 (19th May 2015) - Managing the Economy Exam Thread

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im so confused about the difference of long run and short run aggregate supply? is long run when it shifts to the right? and short run where it would be normally? also anyone know how to structure the questions for the different marks available? would i need graphs for every question?

Hi, short run AS will be elastic, but LRAS will be perfectly inelastic.

There will be 18 mark for KAA and 12 marks for Evaluation. For KAA, 6/18 will be for date reference, definition, diagram. 12 marks will be for 3 analysis (3x4).
For evaluation, 3 evaluation points should be made (3x4).
A diagram is not definitely necessary, but highly recommended as it helps you to secure 4 points.

Reply 81

Immakabiri

Original post by prepdream

ah thank you! Sorry I have one more question, it may be wrong but is SRAS the beginning of the AS curve, and LRAS the straight line part?

Reply 82

dyingrevising

Any predictions for the paper as in what topics are most likely to come up????

Reply 83

ISandles

Original post by dyingrevising

Any predictions for the paper as in what topics are most likely to come up????

http://www.mediafire.com/view/xwcg8y973g2mtw4/30-Mark_Questions_from_Unit_2.docx
Heres a link to all the past 30 markers, you can see what has recently come up and make assumptions by what hasnt appeared in recent exams.
Hope that helps somewhat.

any predictions?

I predict a 30 marker on the Balance of Payments as that has only appeared once.

Reply 86

falloutboyyy

Original post by A-LevelEconomist

I predict a 30 marker on the Balance of Payments as that has only appeared once.

Like what sort of thing

Reply 87

nnemo

My teacher said labour markets and immigration !

Reply 88

falloutboyyy

Yes ooh immigration has been quite current over last few years

I don't know anything about labour markets so hopefully not ahaha

Reply 89

Sophiecramer

Attachment not found

Some brief notes on the macroeconomic policies, with evaluations, that can be used to help reduce the level of unemployment

Original post by nnemo

My teacher said labour markets and immigration !

do you have any notes on this?

Reply 91

IDK Tuition

Original post by Immakabiri

ah thank you! Sorry I have one more question, it may be wrong but is SRAS the beginning of the AS curve, and LRAS the straight line part?

Hi Immakabiri,

Yes, this is right. I'd recommend drawing the L-shaped LRAS curve for your 30 mark question which allows you to evaluate on the basis of whether we're at full employment (vertical section) or there's lots of spare capacity left in the economy (horizontal section).

If you navigate to the "go to evaluation points" chapter and the "30 marker example paragraph 1" chapter on my video, I go through this with a specific example:
https://youtu.be/1W3buwcvCBc

Excuse the shoddy camera work!

Tom (IDK-tuition.com, free online economics resources and videos)

Reply 92

Hortonn

Original post by IDK Tuition

For an output gap diagram I absolutely hate drawing the standard unit 2 ones so is it okay to show it on a Unit 1 PPF?

And mark where the economy is operating as full capacity and where it has spare?

Reply 93

Immakabiri

Original post by IDK Tuition

Thank you very much, ive used your resources before, theyre very helpful:-)

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Reply 94

Jim Riley

These revision webinar videos cover a huge amount of ground for anyone making final preparations for tomorrow's AS macro paper:

UK Economy in 2015 - AS Macro Update & Overview

Aggregate Demand and Aggregate Supply

Living Standards and Human Development Index

Exchange Rates

Supply-side Policies

Multiplier and Accelerator

If you need some further help try these:

AS Macro Key Terms / Definitions

AS Macro Study Notes by Topics

AS Macro Final Exam Technique Advice

All the best tomorrow

Jim

Reply 95

Sophiecramer

The question says 'how might the 'fiscal (budget) deficit' help the government achieve its macroeconomic objectives?

I don't understand this point in the marking scheme as it looks a bit jumbled up. If the governments macroeconomic objective of the government is to reduce unemployment then why is the marking scheme for the analysis part saying that it increases unemployment?

Reply 96

zinodoll

quick question! i know it's kind of general knowledge but

are investments made by banks or like other countries or both??? help thanks

Reply 97

NK_Sidhu

Original post by zinodoll

quick question! i know it's kind of general knowledge but

are investments made by banks or like other countries or both??? help thanks

Investments are expenditures made by firms on capital goods such as machinery or equipment used to manufacture goods, banks do not make investment into firms, firms only borrow money from the bank to use to invest in their own firm. Government investment is not in the form of direct investment to a specific firm, it comes in either subsidies or tax cuts related to the industry the firm belongs to. Investments can also be made by other countries which is known as Foreign Direct Investment, but i don't think you need to know that for Unit 2 its more of Unit 3 knowledge. For this exam I think you need to now the main influences on investment as a component of AD.

Reply 98

Hortonn

For some of the 8 mark questions they say with reference to figure 1 suggest why the price fell blah blah blah and on the mark scheme it says like 2008 recession caused decrease in AD or like in 2011 there was an oil surplus in arabia but these arent in the extract. I know its kind of common knowledge but i dont have time to learn them all now so if i got a question like that could i just say 'an increas in AD caused price to increase' or 'a decrease in AS caused price level to increase' - would i still get the mark?

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Reply 99

Samuelcd

Can someone please ouline what 'crowding out' is.

As for LRAS and SRAS, we were taught that a change in SRAS is to do with costs of production while LRAS is a chance in spare capacity of an economy. LRAS is the standard AD/AS diagram that has been posted here. SRAS has the same axes as this diagram except the SRAS curve is a straight line much like in a micro diagram. I would probably avoid using SRAS in the exam as it seems a bit of a convulated and debatable topic.