AQA Macroeconomics (Unit 2) OLD SPEC (AS level Resits)

Was quite tough I found, chose context 1 but struggled with time on the 25 Marker.

What were the consequences of a rapid fall in the exchange rate other than that it is inflationary and causes unemployment?

wasn't it a rise in the exchange rate?

Fall in the value of the pound!

I said less spare capacity meant that the economy was almost operating at its productive potential. Not sure if that counts as a definition. Then I said that as AD increases, inflation rises and there's an upward pressure on prices because supply can't be increased due to all resources being completely utilised so productive potential would have to increase to reduce prices again. Not sure if that's even right tbh

i did context 2, what a great question.
multiple choice was meh, they didn't give me the multiple choice answer sheet until 10 mins into the exam, so wasted time putting the answers in that after urgh.

there were some hard multiple choice questions but the essay at the end was good

It is right, to an extent. As a definition it should be fine, and although you've delved a deep in the realm of explaining it rather than defining it, you're showing the examiner you understand the stuff but do not know the def by heart. Should be fine.


I for one went for Context 2 and messed up really badly on the essay question. I never really read the textbook or anything but I do a lot of extra reading online. Sadly, the question was too open ended for me so I've likely waffled a lot and didn't hit the mark scheme.

Last year it went really well but they didn't grade my stuff because it wasn't in the textbook, despite it being correct. I was just told yesterday that there's a shortage of Economics teachers at AQA so they're hiring god damn Maths teachers who know nothing about the subject and go only by the mark scheme.

I drew a diagram with that explanation and that was pretty much my entire 12 marker what did you talk about in your essay?!

Swear it was a rise in the value of the pound! XD and appreciation

Oh I see, well, you should still get at least 4 marks on the diagram, and at least 2/4 more for that explanation, so it shouldn't be too bad ^^ Perhaps you could've referred to the figure.

I just talked of the adv of monetary policy in the form of interest rates being able to raise AD in the economy, drew the keynesian LRAS and AD and showed a shift in demand. Showed how more employment would result as the economy employs more of its factors of production, including labor, to soak up the extra demand. Then said of how the employment would lead to more consumer confidence, even more AD, etc.

Disadvantage of monetary policy in the form of AD going too high up on the Keynesian LRAS, causing just demand pull inflation and little else, talking about government failure and how it might not know how low to set the interest rate and also that it's not very viable to reduce the interest rate below 0% (so it's a policy with 'finite uses'

Adv of fiscal: can encourage certain ways of spending the money, and not just mindlessly increase AD as in the case of monetary policy. Talked about how the gov could use expansionary fiscal policy to encourage R&D in companies to increase long term dynamism in the economy and increase trend rate of growth, together with increasing the AD by increasing business confidence through tax exonerations and subsidies, which will cause an increase in investment (part of AD). Hitting two birds with one stone thing

Disadv of fiscal: opportunity cost as the gov would have to increase budget deficit to pay for the stuff if unwilling to raise taxes as well. Crowding out of the private sector. Could've spent money on education/healthcare.

And a crappy conclusion I didn't have time to finish.

All in all it was terrible compared to what I used to manage :/ How'd you manage?