AQA A-level Economics new 7136 - 06, 13 & 19 Jun 2017 [Exam Discussion]

Yeah I guess these questions aren't too bad if you think logically and break it down. I always find it harder when the questions are more broad and less focused because I tend to sit there like "OOH INEQUALITY I KNOW THAT" and then never know what to write lol. Whereas if it's just like "Discuss the view that price discrimination is always bad for consumers" it's just an essay on price discrimination which I find far easier to structure.

I feel way stronger at Macro than Micro though so as long as get through Tuesday I should be okay 😅

nah don't worry I feel the same, I hate poverty questions. Took me some time to try and understand questions like these, even now I'm not 100% Yeah I feel like business side questions are way easy to write and evaluate like price discrimination!

I dont know if I like macro I just have no idea how to evaluate and I really don't understand all the financial markets bits

Thats a government failure however. The premise of market failure, is that if left to market forces, then the market will fail. When you are looking at the benefits of market forces over government intervention, you can evaluate between market and government failure but market forces will never correct a market failure, that is contradictory.

how would you structure an answer to a question which asks whether the government should use greater market forces or intervene? what would you say about market forces? and for government intervention, would you bring a possibly policy eg subsidy and evaluate that?

I feel like anything on theory of the firm/market structures is a fairly straightforward question. Inequality and labour markets are definitely the trickiest bit of micro for me (although a lot of my friends detest market structures lol)

I'm same with macro. The financial market bit is tricky, but if it really comes to it and they ask anything in-depth on financial markets I'll just not do that question and pray the alternatives are okay haha. I feel like evaluation for macro is fine. I usually just evaluate by linking each argument back to the original question and I feel like they ask less waffly questions in macro than in micro, no?

Definitions

There's almost definitely an externality - show it on a diagram and explain the need for government intervention. Suggest a policy (tax, subsidy, regulation) etc.

Your main argument against government intervention: Government failure and the difficulty of putting a monetary value on externalities so it's difficult to know at which level a tax/subsidy should be set at.

(Another good one is to say that the market should correct itself and so just leaving it to market forces may be beneficial - however the market failure is likely to have distorted the market and therefore the rationing, incentive, signalling function of prices may not work effectively and therefore there is a call for government intervention in some form as the market may not correct itself).

Evaluate.

Done.

how would you structure an answer to a question which asks whether the government should use greater market forces or intervene? what would you say about market forces? and for government intervention, would you bring a possibly policy eg subsidy and evaluate that?

Maybe I should try evaluating like that I think I struggle to write well developed points with macro idk how to be detailed even if the questions are better

thats great thanks but how would the market forces solve things by itself for example in a negative externality?

I mean the classic that AQA have been obsessed with for years is asking about the extent to which monetary policy can achieve economic stability. I'd do:

(This is quite a basic skeleton plan just to show how I evaluate)

Definitions
Point 1 (Inflation targeting) - explain it blah blah blah
Evaluate: Inflation targeting has been fairly effective as following it's introduction inflation has, for the most part, remained at a manageable rate other than following an economic shock.

Point 2 (Interest rates) - explain blah blah blah
However: May not work - people may be deleveraging blah blah blah
Evaluate: They are used as a tool for maintaining price stability. Price stability in turn ensures economic growth remains positive and steady (show all this stuff on a diagram, obviously)

If you need a point 3 you can always go into either Exchange rates or Quantitative Easing. I usually try to avoid Exchange rates purely because I think there are easier ways of getting the marks.

Then at the end I usually write something about how although it is fairly effective in maintaining economic stability, methods such as QE by the bank of England should not be relied upon and instead the government should look to actively seek to boost AD amongst consumers and investment.

Then just reevaluate all the stuff and come to a solid evaluation on how effective you think monetary policy is. I usually get about 20/25 if I follow that structure

Omg bless!! This is my least favourite question, because I never know what to write in it but that makes so much sense.

I still don't really understand qe but it's something I probably really need to go over xD

QE is just an unconventional use of monetary policy, when instruments like the interest rate don't become so effective, like what happened in Japan. So the Bank of England just create money electronically and purchase government and privately owned assets, which injects money into the economy, increasing the money supply etc.

Hope this helps

Thank you thats so clear! How would you evaluate the use of it?

I suppose you could say it's fairly new use of monetary policy so we don't really know the long term side effects. I'm sure there is probably a better evaluation point but I think it depends on the context of the question. Any ideas how you would evaluate it?

Inflation? I'm not sure

Thank you thats so clear! How would you evaluate the use of it?