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    (Original post by chumps52)
    Can you remember the questions? Specifically the 8 and 12 marker just after the question asking how CPI was calculated
    one of them was about suggesting 2 factors of why the government would choose to increase the base rate and the other was about the benefits of HDI as an indicator of development. Dunno, might be way off
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    (Original post by Princepieman)
    one of them was about suggesting 2 factors of why the government would choose to increase the base rate and the other was about the benefits of HDI as an indicator of development. Dunno, might be way off
    Thanks, this is what I've got as the questions (can't believe I can't remember it after only a few hours haha)
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    (Original post by chumps52)
    Thanks, this is what I've got as the questions (can't believe I can't remember it after only a few hours haha)
    one before the 30 marker is 16 marks,

    Don't remember there being anything about improving HDI but dunno
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    (Original post by wmurch)
    Oh yeah, the question was asking why wage rates may have been low during that time. I spoke about the financial credit crunch in late 08, and companies losing profits/revenue and this may cause people to lose their jobs or accept lower wage rates etc. And then I spoke about increased immigration (as there was data given) and its effects on the supply of labour. It would likely increase the supply of labour and reduce wages as its more competitive. I also mentioned that typically Eastern European workers work for less, and that this might drive down wages.
    Oh, I wrote about how commodity prices were high (Oil peaked at $140 a barrel in 2009) and how this would cause a Supply Side Shock and firms would be forced to cut production costs by cutting wages. Hope that's okay
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    What did everyone write for 30 marker Q2 ??
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    (Original post by unimaginable118)
    What did everyone write for 30 marker Q2 ??
    Consumers:
    Interest Rates go up:
    - Marginal prop. to save increases, marginal prop. to consume decreases
    - Less incentivised to borrow/finance things

    Interest rates go down:
    - MPC increases and surpasses MPS
    - More willing to finance purchases with loans as rates are favourable
    - More consumption pushes AD curve upwards

    Credit:
    - Banks make more money when there's a gap between what they get from gov. bonds and the rate they lend at
    - More robust credit markets lead to more efficient allocation of resources
    - Interest rates determine can determine the level of credit available

    Firms:
    Interest rates go up:
    - Less reason to borrow, more reason to re-invest cash into capital goods
    - Leases and other credit based lines increases the cost of production
    - Less incentive to hire as there's an overall lack of demand push

    Interest rates go down:
    - More willing to issue bonds/borrow money to invest into production
    - Less reason to keep cash on the balance sheet/in savings
    - Greater demand push from consumers spending more and borrowing to spend more
    - Expansion in AS curve as AD rises

    Eval:
    - L/R vs S/R
    - Time lag between announcement of interest rate changes and when effects take place
    - Magnitude of change in interest rates and the subsequent effects of that
    - Overall, monetary policy is effective but has its draw banks and needs supplementary policies to achieve econ. goals.




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    (Original post by Princepieman)
    Consumers:
    Interest Rates go up:
    - Marginal prop. to save increases, marginal prop. to consume decreases
    - Less incentivised to borrow/finance things

    Interest rates go down:
    - MPC increases and surpasses MPS
    - More willing to finance purchases with loans as rates are favourable
    - More consumption pushes AD curve upwards

    Credit:
    - Banks make more money when there's a gap between what they get from gov. bonds and the rate they lend at
    - More robust credit markets lead to more efficient allocation of resources
    - Interest rates determine can determine the level of credit available

    Firms:
    Interest rates go up:
    - Less reason to borrow, more reason to re-invest cash into capital goods
    - Leases and other credit based lines increases the cost of production
    - Less incentive to hire as there's an overall lack of demand push

    Interest rates go down:
    - More willing to issue bonds/borrow money to invest into production
    - Less reason to keep cash on the balance sheet/in savings
    - Greater demand push from consumers spending more and borrowing to spend more
    - Expansion in AS curve as AD rises

    Eval:
    - L/R vs S/R
    - Time lag between announcement of interest rate changes and when effects take place
    - Magnitude of change in interest rates and the subsequent effects of that
    - Overall, monetary policy is effective but has its draw banks and needs supplementary policies to achieve econ. goals.




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    Do you think writing about Quantitative Easing would get me some marks :-o
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    (Original post by unimaginable118)
    Do you think writing about Quantitative Easing would get me some marks :-o
    Yeah, I wrote about it too
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    (Original post by epic within)
    Yeah, I wrote about falling AD, wondering if an increase in immigration is a valid point because it decreases wages
    Yeah I wrote that as well, I did a labour market diagram and showed S of labour rising and The wage rate falling
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    I think i may have misinterpreted the real wage rate q, for some reason i thought i said that an increase in unemployment may decrease real wage rate as the average will decrease will i get any marks for this?
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    For the 30 marker question 1, i said they have to use supply side policy. i listed education and training, reduction in tax for businesses, reduction in income tax and reduction in benefits. then i listed the issues with this expensive ect... then i stated that it depends on the type of unemployment and said if its demand side then expansionary fiscal and monetary have to be used to increase employment rate. then i wrote that fiscal and supply side might have to be used together in order to increase employment rate. i drew both diagrams LRAS shifting right and AD shifting right. Do you think this would get me full marks?
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    (Original post by epic within)
    This is exactly what I wrote
    Same!
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    for the 30 marker Q1 (Edexcel unit 2) I wrote about expansionary fiscal policy:

    So drew a diagram (Keynesian one) and basically talked about increased Govt spending so on infrastrucutre projects which would create jobs, multiplier effect and so jobs would be created. Then I talked about Cutting taxes corporate tax cut would increase the incentive of firms to invest so more invest = more jobs and cut in indirect taxes would mean more consumption which is the biggest component of AD (it comprimised for 61% of AD in 2012). So consumption would increase so more labour will be demanded so more jobs.

    However, I wrote about the huge opportunity cost involved, I wrote about how it could cause unwanted inflation (showed it on the Keynesian curve) and talked about how Monetary policy would be bettter since it doesnt require govt spending which is important since if the fiscal policy brings unwanted results then the govt would somehow have to pay the debt.

    All I remember :P
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    (Original post by epic within)
    What did you write about for that 8 marker that asked about falling real wages
    i spoke about the recession for my first point and low levels of productivity for the other :/ not sure this was right tho (
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    I think the Unit 2 test went pretty decent today, feeling quite confident. Just not sure if I did the right shift in the 30 marker (Q1). I talked about reducing NMW, benefits and tax, but shifted AD to the right. They are supply side policies so I think I should have shifted LRAS. Not sure, though as on the mark scheme for 2012 it says you can shift either, hopefully won't lose too many marks on that.

    I also had a look at Question 2, thought it was ridiculously hard in comparison with Question 1. Hopefully everyone did well!
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    (Original post by fkaclocksx)
    i spoke about the recession for my first point and low levels of productivity for the other :/ not sure this was right tho (
    Yeah I spoke about the recession as well, so I wrote that since there is a recession consumption has decreased, so firms make less profits. So in order to them to increase profits, they reduce their costs by cutting wages.

    I then talked about how unemployment may be causing the negative real wage growth, I said that since there is unemployment the net spending on wages in the economy has decreased, thus the real wage growth is negative. I also used a reference from figure 2 for this point.
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    (Original post by iAstro)
    Yeah I spoke about the recession as well, so I wrote that since there is a recession consumption has decreased, so firms make less profits. So in order to them to increase profits, they reduce their costs by cutting wages.

    I then talked about how unemployment may be causing the negative real wage growth, I said that since there is unemployment the net spending on wages in the economy has decreased, thus the real wage growth is negative. I also used a reference from figure 2 for this point.
    same
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    Did you mention anything about using other policies and saying why they may be more effective? Maybe I just interpreted the question wrong, but I talked about how monetary policy is effective, but compared it to other policies e.g fiscal and supply side.


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    would increased levels of employment be an impact on a weaker exchange rate?? i mentioned this and a positive net exports as my points for the 8marker but i don't think i'll get any credit for the point on employment :/ should have mentions inflation arghh
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    (Original post by fkaclocksx)
    would increased levels of employment be an impact on a weaker exchange rate?? i mentioned this and a positive net exports as my points for the 8marker but i don't think i'll get any credit for the point on employment :/ should have mentions inflation arghh
    if you mentioned in the "export industry" then you will pick up marks. safest way was to go with increased exports and cost push inflation as the two points
 
 
 
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