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# Economics Unit 2 prediction for 17th may 2013 :) Watch

1. Do we have to choose between SR OR LR AD/AS diagrams?
I always just use LR is it wrong? Only been taught that one

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2. what topics are you guys concentrating on right now?
3. (Original post by kurdabora)
Do we have to choose between SR OR LR AD/AS diagrams?
I always just use LR is it wrong? Only been taught that one

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They can both show the same things, so it's not wrong.
4. Gonna go and set up shop early now. Good luck to you all.
Remember: direct your anger from unit 1 at this paper!
5. Good luck everyone!
6. Good Luck everyone!! Eat a banana before the exam
7. Good luck everyone!!!!!
i feel a lot more prepared for this exam!!
8. For as/ad graph I put price level and real GDP but mark scheme show output level is it wrong to put real gdp

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9. (Original post by kurdabora)
For as/ad graph I put price level and real GDP but mark scheme show output level is it wrong to put real gdp

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My x axis is usually real output and y axis is the price level. I am not sure if real GDP is wrong.
10. (Original post by Jack_Smith)
My x axis is usually real output and y axis is the price level. I am not sure if real GDP is wrong.
I think I will just change it real output better safe than sorry.

And when questions ask for as/ad diagram do you tend to shift both the as and ad or only one of the curves?

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11. (Original post by kurdabora)
I think I will just change it real output better safe than sorry.

And when questions ask for as/ad diagram do you tend to shift both the as and ad or only one of the curves?

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Well it depends on the scenario. If a component of AD changes then I would shift AD. Although, if investment increased I would shift both AD and AS to the right. For a supply side policy such as education and training I would shift both AD and AS.
12. guys how does investment shift AD AND AS
how can it be seen as a supply side policy also?
13. (Original post by ineedtorevise127)
guys how does investment shift AD AND AS
how can it be seen as a supply side policy also?
First of all, Investment is a component of AD so increases AD. Investment in capital goods increases efficiency of a firm which increases output so an increase in AS.
Its not a supply side policy.
14. (Original post by ineedtorevise127)
guys how does investment shift AD AND AS
how can it be seen as a supply side policy also?
Investment is a component of AD (around 20% of it) so a increase in investment will lead to a increase so AD-shift to the right. Investment is when firms spend on capital goods so in the long run they will be able to increase productivity shifting AS. Supply side polices are used to increase AS. You can say the government can give subsidies to firms to invest and increase AS and the eval will be opp cost as well as the fact the firm may keep the money but not use it for investment

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15. (Original post by Jack_Smith)
Well it depends on the scenario. If a component of AD changes then I would shift AD. Although, if investment increased I would shift both AD and AS to the right. For a supply side policy such as education and training I would shift both AD and AS.
Thanks for all the help!

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16. (Original post by kurdabora)
Thanks for all the help!

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Thats alright. Good luck!!!
17. (Original post by Jack_Smith)
Thats alright. Good luck!!!

we meet again hahaa good luck! and hopefully choose right question this time
18. (Original post by Mesutozil)
we meet again hahaa good luck! and hopefully choose right question this time
lool are you resitting this again too?
Thank you and yes I know to go for the policy questions now! Thanks for the advice
19. Can someone please tell me if this makes sense...

Although in the short-run an expansionary fiscal policy will stimulate AD, in the long-run the government will raise taxes in order to pay back the national debts that it incurred whilst running a budget deficit. Therefore, living standards could fall in the long-run.
20. it wont be on anything to do with monetary or fiscal policy, that was in the 2013 jan paper so most likely BOP or inflation

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