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F581/ F582 Economics June 2013 Watch

  • View Poll Results: How hard did we find this exam ?
    so hard i felt like crying through the exam
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    very difficult , but one or two were alright
    13
    12.50%
    fairly standard
    33
    31.73%
    quite easy , with one or two hard ones
    35
    33.65%
    so easy i felt like dancing throughout the exam
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    9.62%

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    (Original post by Fas)
    the fall in exchange rate means demand for pounds is low - thats the only thing i got for that haha , not sure why that's bad actually as it allows exports to get cheaper
    You could talk about it being good for the economy, but not consumers, because they will have a reduced purchasing power in terms of imports since they'll be finding goods and services from other countries much more higher priced.

    Effectively, an increase in imports is bad for AD in terms of net exports, but not for consumers because of the bigger market they'll be able to spend in if imports were cheaper, and a fall in the exchange rate would mean imports would become higher priced.
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    What about trade as an 18 marker?
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    (Original post by UnknownGuy)
    What about trade as an 18 marker?
    It's a very broad topic!
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    (Original post by UnknownGuy)
    What about trade as an 18 marker?
    Oh I do hope not!

    But, I suppose you can talk a lot about protectionist methods
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    (Original post by fletchdd02)
    It's a very broad topic!
    I mean something like discuss whether governments should protect their industries?
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    What would you write for this essay :

    "Discuss whether a decrease in aggregate supply is always harmful to national economic performance"
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    (Original post by HeyMickey6)
    What would you write for this essay :

    "Discuss whether a decrease in aggregate supply is always harmful to national economic performance"
    It is harmful as it can cause inflation, it will increase unemployment, it will give balance of payments problems.

    However, if there is a reduction in supply due to a higher school leaving age or more people entering higher education then in the long term AS will benefit and increase. It also depends if there is a lot of spare capacity in the economy, because decreasing AS whilst at (yf) will be more harmful than if there is spare capacity.

    There will be more but I can't think at the minute haha!
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    Can anyone tell me how economic growth is measured plz, what is the output, expenditure, income method? And what is national economic performance?
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    (Original post by HeyMickey6)
    What would you write for this essay :

    "Discuss whether a decrease in aggregate supply is always harmful to national economic performance"
    L1: Define AS and Economic Growth
    L2: Show how a reduction in AS decreases Real GDP
    L3:
    • Inflation
    • Loss of output and thus unemployment
    • Current account deficit

    L4:
    • Depends on what AD is doing
    • Size of the decrease
    • We could be switching to capital goods?

    L4+: Something to do with LR vs SR.

    Anything else I could add?
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    (Original post by Ahmed-)
    Can anyone tell me how economic growth is measured plz, what is the output, expenditure, income method? And what is national economic performance?
    Output=income=expenditure so measuring any of these will show you GDP.

    However with output you have to be careful of double counting for example counting raw materials and then re-counting them in the final products.

    Income can often be undervalued as there is a lot of unmeasured activity, such as cash in hand work etc that goes unrecorded.
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    (Original post by CTArsenal)
    Nope, a negative output gap is when the economy is not achieving its full potential, in this case even though AS has fallen, AD would still be on the inelastic part of the new AS curve, but probably just exceeding it in terms of output.

    In the short run, it could be argued that it would cause a positive output gap due to the time lag in AD falling in response to the fall in AS, since consumers would take some time to adjust their spending if their income fell or they became unemployed, etc. It would take a while to work through the economy really.

    I guess in the long run you could argue that it may cause a negative output gap, but only if you specifically stated that.
    oh okay I see, ah gosh I need to make sure I always remember the effects in the short run and long run. Thanks for replying
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    (Original post by fletchdd02)
    Output=income=expenditure so measuring any of these will show you GDP.

    However with output you have to be careful of double counting for example counting raw materials and then re-counting them in the final products.

    Income can often be undervalued as there is a lot of unmeasured activity, such as cash in hand work etc that goes unrecorded.
    Ohh ok, thanks alot
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    (Original post by Ahmed-)
    Ohh ok, thanks alot
    No problem, how are you feeling about it?

    It's not as bad as you think, it all comes flooding back in the exam hall
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    (Original post by CTArsenal)
    You could talk about it being good for the economy, but not consumers, because they will have a reduced purchasing power in terms of imports since they'll be finding goods and services from other countries much more higher priced.

    Effectively, an increase in imports is bad for AD in terms of net exports, but not for consumers because of the bigger market they'll be able to spend in if imports were cheaper, and a fall in the exchange rate would mean imports would become higher priced.
    never thought of that , thanks !
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    (Original post by Ahmed-)
    Can anyone tell me how economic growth is measured plz, what is the output, expenditure, income method? And what is national economic performance?
    Output = expenditure = income is the theory behind measuring economic growth anyway.

    Some problems wit measuring growth :

    - double counting
    - if an increase in growth is exceeded by a rise in population
    - the existence of an informal economy
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    does anyone have any problems of measuring Unemployment?
    Also for the question ' Discuss whether Unemployment is always harmful for the economy' for why it is harmful I know you stay stuff like -

    decrease in output - negative output gap, less productive capacity, hinders growth
    ( and then show of PPF or AS& AD graph), less tax revenue for government - budget deficit
    hysteresis -income inequality
    reduce international competitiveness - less goods made - less consumer choice
    Doesn’t meet macro objectives of full employment

    its not harmful depends on:
    - type of unemployment,
    current economic cycle, depends if long term or short term
    Depends if other policies are happening at the same time e.g. supply side may prevent unemployment
    what else can you say for both sides of the argument? Thank you in advance & what's a good conclusion please?
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    anyone know the determinants of exchange rate? tourism, interests rates, anything else?
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    (Original post by wolalala)
    anyone know the determinants of exchange rate? tourism, interests rates, anything else?
    Disposable incomes abroad and at home, internationally competitive goods and a strong economic performance may attract FDI
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    (Original post by wolalala)
    anyone know the determinants of exchange rate? tourism, interests rates, anything else?
    Interest rates as these are the basis of all speculation and the movement of 'hot money'
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    (Original post by heirloom)
    Disposable incomes abroad and at home, internationally competitive goods and a strong economic performance may attract FDI
    ah cool, Thank you for replying!
 
 
 
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