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    (Original post by Vilthepill)
    What I wrote for the 15 marker was that the MPC should be worried about deflation. Firstly I said that inflation is at the lowest it has ever been and said that they should look at using the expansionary MPC because the economy is really close to falling into deflation. Evaluated that by saying that interest rates are already low but inflation is still low, meaning that manipulating interest rates to change inflation is uneffective and they should use quantitative easing instead. Also I mentioned that it is a worrying factor because there are no certain tools which the MPC can use to get out of deflation and mentioned that we can become like Japan. Saying that deflation is bad because people are constantly not going to consume because they will know that prices are always falling they'll keep on waiting till it gets low instead of purchasing now, hence a negative impact on AD occurs
    Exactly what I wrote phew. I think I coulda mentioned that it may be benign deflation but I evaluated saying that the oil price fall would eventually lead to inflation so it may deflect the prospect of deflation.
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    (Original post by JMEisjames)
    I wrote about firms confidence being low due to the low prices of oil so they had limited expectations and then i talked about the pound appreciating meaning left shift in AD
    I talked about because people have low income, so consume less, decreasing AD and inflation.

    For point 2 i talked about a decrease in costs for firms and so AS increases reducing price level.
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    I think I messed up the 20 marker since I chose the first one because I couldn't remember the demand side policies at the time. The first one was pretty garbage I think I wrote something about how we were under target and above target at different points but mpc had reduced the 5% rate at least. Evaluated something about how our target wasn't being met and that we were under threat of deflation and yet the mpc planned to raise interest rates because of the slump of global oil prices. Then wrote something about how they would probably enforce QE if deflation occurred so they had been fairly successful. Really bad question that first one :s
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    (Original post by Parhomus)
    Exactly what I wrote phew. I think I coulda mentioned that it may be benign deflation but I evaluated saying that the oil price fall would eventually lead to inflation so it may deflect the prospect of deflation.
    That was my thinking too.
    That's why I concluded that it wasn't that relevant currently.
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    By the way how can someone write 5 marks worth on what real income is. All I could do was define it and write how it rose and fell with some figures. D:
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    (Original post by Parhomus)
    By the way how can someone write 5 marks worth on what real income is. All I could do was define it and write how it rose and fell with some figures. D:
    Define real - K
    Define income - K
    Throw in some figures - 2AP
    Explain what the figures show i.e.less real income over time - AN
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    (Original post by Bruce267099)
    Define real - K
    Define income - K
    Throw in some figures - 2AP
    Explain what the figures show i.e.less real income over time - AN
    Lol. I only wrote one paragraph for it including all of that, dunno why they gave us a whole page.
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    (Original post by Bruce267099)
    Define real - K
    Define income - K
    Throw in some figures - 2AP
    Explain what the figures show i.e.less real income over time - AN
    Wait, income is a flow, right?
    Were we supposed to identify peak/lowest? Give a range?
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    (Original post by Parhomus)
    Lol. I only wrote one paragraph for it including all of that, dunno why they gave us a whole page.
    I know it was the same with the 10 marker we got like 2 pages The only good thing was i didn't have to ask for extra paper.
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    (Original post by AsmaaMahamud97)
    Wait, income is a flow, right?
    Were we supposed to identify peak/lowest? Give a range?
    Wait wasn't income a 4 mark question.

    If so you just had to define real and income (yes income is a flow concept)
    And then show how it has changed so yes the lowest and the highest.
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    By the way, the question about the chancellor of the exchequer or whatever tf it was, was the question about the increase in income? So you would find the multiplier, multiply the injection by this number then subtract the initial injection?
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    (Original post by rosemondtan)
    What did you write for the 20 marker!
    Oh Ok, I did the second one
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    (Original post by Parhomus)
    By the way, the question about the chancellor of the exchequer or whatever tf it was, was the question about the increase in income? So you would find the multiplier, multiply the injection by this number then subtract the initial injection?
    I think so, but it said the increase in income from the injection so i thought I'd include it.
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    (Original post by Parhomus)
    By the way, the question about the chancellor of the exchequer or whatever tf it was, was the question about the increase in income? So you would find the multiplier, multiply the injection by this number then subtract the initial injection?
    OMG, I thought it was that but then I thought it was calculate the overall injection.

    I guess I lost a needless mark.
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    (Original post by Bruce267099)
    I think so, but it said the increase in income from the injection so i thought I'd include it.
    Never mind, I think you're correct, because I got 30bn then subtracted 15bn from it, because I thought it was asking the increase in income due to the injection; but in hindsight I'm pretty sure I should've just left it at 30bn. :I
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    (Original post by Parhomus)
    Never mind, I think you're correct, because I got 30bn then subtracted 15bn from it, because I thought it was asking the increase in income due to the injection; but in hindsight I'm pretty sure I should've just left it at 30bn. :I
    I was about to do what you did, but then i got confused so i left it. You'll get at least 1 mark or 2 if your right.
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    I think I included that final bit because it was 3 marks; usually in maths those kind of questions are like 2 marks; but then again this was economics so it would be reasonable to leave it there :c.
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    does anyone know if theres a thread for the old spec exam???
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    (Original post by Parhomus)
    By the way, the question about the chancellor of the exchequer or whatever tf it was, was the question about the increase in income? So you would find the multiplier, multiply the injection by this number then subtract the initial injection?
    Are you talking about the 15 billion injection in section A? I got 30 billion as my final answer because mpc = 0.5 so the multiplier = 1/1-0.5 = 2. So 2*15billion
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    (Original post by Vilthepill)
    Are you talking about the 15 billion injection in section A? I got 30 billion as my final answer because mpc = 0.5 so the multiplier = 1/1-0.5 = 2. So 2*15billion
    Yeah I don't know why I did 30bn-15bn :c. I think I thought it meant what increase arose from the injection.
 
 
 
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