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

How would one go about answering an essay on falling/rising commodity prices on the performance UK economy.

Anyone have essay plans?
Evaluation?

Also would falling commodity prices boost exports in the sense that loads of firms import raw materials, soit helps them?

How would one go about answering an essay on falling/rising commodity prices on the performance UK economy.

Anyone have essay plans?
Evaluation?

For a rise in commodity prices:

Also would falling commodity prices boost exports in the sense that loads of firms import raw materials, soit helps them?

How would one go about answering an essay on falling/rising commodity prices on the performance UK economy.

Anyone have essay plans?
Evaluation?

Also would falling commodity prices boost exports in the sense that loads of firms import raw materials, soit helps them?

Think about how rising commodity prices affects each one of the macroeconomic objectives. How does it affect Economic growth, employment, inflation and BOP. A diagram should help a lot with this question and then do a paragraph on each of the economic objectives

leftward shift of SRAS (icost push nflation, slow growth, higher prices for consumers)

Reduction in the value of net exports (reduction in AD, negative multiplier effect, cyclical unemployment)

High costs mean that there is less incentive or businesses to start up, leads to a slow down on the trend rate of growth.

could actually attract demand to the uk steel industry and prevent structural unemployment in this industry

in the introduction you could also talk about the causes of a rise in the price of commodities (specualtive demand, increased demand due to developing economies)

Ah okay, gonna attempt to write with this structure, thank you!!


Thank you, I'm a bit confused on how it would lead to a reduction in exports/boost the steel industry, could you explain that (sorry )

ah okay thank you!

Do you think financial regulation will come up?

many companies import commodities in order to produce their goods. If the price of commodities increases, the firms will have to spend more on imports. This would lead to a reduction in net exports (exports-imports). Imports are a withdrawal of the circular flow of income. Therefore, a rise in the value of imports would decrease AD, potentially leading to the negative multiplier effect.

The point about the steel industry is not as strong. Steel is a commodity (i think). The UK could take advantage of increasing world steel prices by trying to improve efficiency, which would reduce Uk steel prices, leading to an increase in demand for UK steel

How would you approach a financial regulation question if it came up?

Anyone got any ideas on how to revise for paper 3? The only two specimins are miles different from one another so I don't really know what to revise and how to revise for it in terms of the essays because there's just such a broad amount of questions that could come up!

Anyone got any ideas on how to revise for paper 3? The only two specimins are miles different from one another so I don't really know what to revise and how to revise for it in terms of the essays because there's just such a broad amount of questions that could come up!

please can somebody help me to understand crowding out.
Am I right in saying that in a recession Gov spending will most likely be financed through government borrowing. Therefore to raise money the gov will issue more bonds which increases the supply of pounds and therefore brings down the bonds market price. As a result this will increase the yield on bonds and most loan or mortgages use the yield as a benchmark for interest rates. Therefore, due to the increased bond yield, interest rates will increase and as a result crowd out private sector lending? absolutely no idea if i am right tho!!! HELP

who would inflation in other countries cause the pound to appreciate?