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Economics Unit 2 Edexcel - Managing the UK economy Tuesday 19th May 2015 (PM)

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Original post by Jwanaton
for the 30 marker in question 2 what did people write about, did you write about productive potential or productivity or both??


I talked a lot about productive potential, with side effects on AD (like G), but basically saying that real output will only really increase in the long term, and not by much without demand side policies.

I'm worried I got the focus sightly wrong.
Original post by golden tribe
I defined investmebt

Then said investment fell from 34bn in 2008 to 28bn in 2013


same i started off defining investment, then made some bs up about what 'at 2010 prices' meant, then used data from the figure to show how investment changed from 2010 to 2013.....I'll be happy with 3 marks for this question
what points did people make for the 30 marker on question 2, i wrote about decrease i=ncome tax leading to higher productive potential, i talked about increase spending one ducation leading to better skilled people and more productivity, i wrote about better education meaning that more people got jobs and therefore a higher productive potential and i wrote about subsidies leading to lower cost, more investment on capital and higher productivity.
How did you guys structure the 30 marker on Q1?

I mentioned a macroeconomic objective in each paragraph, stated HOW a fiscal/monetary policy would help achieve it & then I stated how/why that objective would conflict with another. Then I obviously evaluated
Original post by prepdream
I did Question 1. Quite satisfied :biggrin:


was the 30 marker:
- To what extent do demand-side policies conflict with macroeconomic objectives?
or
-To what extent do demand-side policies lead to conflicts between macroeconomic objectives?
Anyways guys, I wrote that Quantative Easing led to depreciation in exchange rates (as interest rates decreases) -> Improve current account but may lead to demand pull inflation as more demand for export.

Then evaluate PED of export and import. Saying that if it is elastic, current account will hugely improve but demand pull inflation increases dramatically as well, thus conflicts. But if inelastic means less conflict. Is it alright?
Original post by Achint10
was the 30 marker:
- To what extent do demand-side policies conflict with macroeconomic objectives?
or
-To what extent do demand-side policies lead to conflicts between macroeconomic objectives?


I remember it is the second one.
I thought it was about differences between inflationary figures in their respective years
Original post by Leking9
How did you guys structure the 30 marker on Q1?

I mentioned a macroeconomic objective in each paragraph, stated HOW a fiscal/monetary policy would help achieve it & then I stated how/why that objective would conflict with another. Then I obviously evaluated


same here. Which points did you write?
Original post by prepdream
I remembered that they asked why saving ratios changed, how house prices affect UK economy, explain monetary policy, how budget deficit affect circular flow of income, why MPC decided to lower interest rates and keep it like that since March 09, how low and stable inflation affects UK economy and 30 markers was how demand-side policies lead to macroeconomics objectives conflicts.


cheers mate
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Avatar for Jemy
Jemy
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PLEASE ANYONE!

I took question 1 and did the 30 marker ask to evaluate demand side policies causing conflicts with macroeconomic objectives or demand side policies causing conficts with macroeconomic objectives?

I because I analysed the conflicts that they caused. Such with inflation, current account and the environment indirectly because of growth.

If it was the first and not the second, should I still score okay?
what were the 12 mark questions for question 2?
- What is meant by "investment in 2010 terms" (6)
- Two factors that caused investment to fall in the UK (8)
- Effect of price level and real output of falling investment (12)

- components of balance of payments (4)
- causes for a deficit in the current account (8)
- impacts of productivity performance in the UK on the economy (12)
- supply side polices to increase real output (30)
Original post by MouseyBrown
I talked a lot about productive potential, with side effects on AD (like G), but basically saying that real output will only really increase in the long term, and not by much without demand side policies.

I'm worried I got the focus sightly wrong.


for the 30 marker in question 2:

I defined supply side policies and what the aim of them is etc in an introduction, then drew an as/ad diagram showing the outward shift in LRAS leading to an increase in real output.

then I chose 3 supply side policies, explained how they would increase real output and evaluated them in detail:

I chose:
1.Increased government expenditure on education and training schemes - this would reduce occupational immobility of labour etc etc
2. Privatisation and deregulation - forces firms to become more competitive and efficient so increases the level of real output etc
3. decrease in income and corporation tax - means firms have more money to spend on investment and to employ labour, also a decrease in income tax increases the opportunity cost of being out of work so employment should increase, increasing real output further.

I also said near the end that they could only be truly effective if AD also increased...

sound ok?
Original post by Jwanaton
what points did people make for the 30 marker on question 2, i wrote about decrease i=ncome tax leading to higher productive potential, i talked about increase spending one ducation leading to better skilled people and more productivity, i wrote about better education meaning that more people got jobs and therefore a higher productive potential and i wrote about subsidies leading to lower cost, more investment on capital and higher productivity.


I siad about lower income tax, increase in training etc and lower benefits in particular jsa...
for evaluation i said lower income tax and lead to inflation (conflict)
lower benefetis increases income inequality, relative poverty and there may be more crime/riots etc as well as there is an assumption there will be more jobs when particualrly in the Northern regions there isn't....
increase spending on training worsens budget deficit therefore in the future other policies such as fiscal policies (fiscal stimulus) will be less successfull as they are paying £51 billion pounds alone in interest...
conclusion: overall training will be best to increase output as productivity is lower than countries such as ....
Original post by AJC1997
no clue, that question was horrible

I thought it was about inlationary changes between years.
Original post by Jemy
PLEASE ANYONE!

I took question 1 and did the 30 marker ask to evaluate demand side policies causing conflicts with macroeconomic objectives or demand side policies causing conficts with macroeconomic objectives?

I because I analysed the conflicts that they caused. Such with inflation, current account and the environment indirectly because of growth.

If it was the first and not the second, should I still score okay?


Hmm, I remember that they asked how policies lead to conflicts. So I think you are alright.
what did people put for causes of deficit on current account and effects of investment on price level and output?!
Original post by KSIOlajideBT
Can someone remind me about what the questions were for question 2


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- What is meant by "investment in 2010 terms" (6)
- Two factors that caused investment to fall in the UK (8)
- Effect of price level and real output of falling investment (12)

- components of balance of payments (4)
- causes for a deficit in the current account (8)
- impacts of productivity performance in the UK on the economy (12)

- supply side polices to increase real output (30)
For the causes for current account deficit I explained these two points:

Higher relative inflation than other countries, reducing competitiveness.
The UK has high marginal propensity to import

will these two explained points work out for me?

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