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Edexcel Economics: Unit 3 Business Economics and Economic Efficiency (June 2014) EC03 Watch

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    (Original post by aymanalhassan)
    E is wrong. The Government can just hire their own professionals to build their buildings and not get a private firm to do it. They use a PFI so that private firms can fund it, that is the MAIN use of a PFI. So governments would not need to borrow huge sums of money in the short term which is option A. Hope I explained it to you well enough .
    i agree with you. So it's A?

    It's the same for government borrowing, they don't need to BORROW (or spend) because of PFI straight away
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    (Original post by jontyl96)
    I thought about that question for a long time and am still convinced it is not A. A said "it does not lead to an immediate increase in government borrowing" - this is exactly what PFI is though (when the private sector lends funds to the public sector for a project). I put E being the best answer though still not 100% correct. It would have been A if it had said government SPENDING not BORROWING.

    Does anyone see where I'm coming from?
    Slightly see where you are coming from, still think it's A though, as a benefit of PFI is that the private sector funds the projects and the gov does not have to increase taxes or cut government spending now and this is a MAJOR benefit esp for the people.
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    I'm sorry to say you're wrong, in the kindest way possible
    Private Finance initiatives are when a private sector firm FUNDS, BUILDS and MAINTAINS a project on behalf of the government. One of the benefits is that it does not come up on government borrowing because they aren't technically BORROWING any money.

    They're saying build this and we'll pay you later, they're not borrowing anything because they're not paying them now.
    Sorry
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    (Original post by Nightw0lf07)
    no m8 it's the same concept.
    Yes SPENDING doesn't go down, no OC incurred.

    But it aleo means they don't have to BORROW straight away either!
    I see what you're saying, but spending does go down through PFI in the short-term. They don't have to pay back the loan straight away, but the funds are borrowed immediately, i.e. the £288 million is received by the government before immediately prior to the hospital being built.

    I want to just accept what you're saying but I'm still not sure. Luckily it was only a MC question and I'll get 2/4 for my elimination marks, but still!!!
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    Does any one else think the 1st MCQ was evil?
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    (Original post by John_Boi)
    Does any one else think the 1st MCQ was evil?
    Yes.
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    (Original post by Starbarian)
    I'm sorry to say you're wrong, in the kindest way possible
    Private Finance initiatives are when a private sector firm FUNDS, BUILDS and MAINTAINS a project on behalf of the government. One of the benefits is that it does not come up on government borrowing because they aren't technically BORROWING any money.

    They're saying build this and we'll pay you later, they're not borrowing anything because they're not paying them now.
    Sorry
    I know and was aware of that, it was just something in the wording that made me doubt it and I am trying to articulate that doubt but it's difficult. Likelihood is it's A, but some exams do have answers that sound correct but have a trick word which renders them incorrect.
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    (Original post by Starbarian)
    Yes.
    The saddest thing is they're not going to accept 2 answers like they would on the 4 mark data response questions when you can sometimes get away with saying the market is a monopoly rather than an oligopoly.
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    (Original post by jontyl96)
    I know and was aware of that, it was just something in the wording that made me doubt it and I am trying to articulate that doubt but it's difficult. Likelihood is it's A, but some exams do have answers that sound correct but have a trick word which renders them incorrect.
    Yes I completely get what you are saying - sometimes questions are worded so awfully. Don't worry or stress about it - you've probably got loads of marks and plus you have many more exams coming up, revise for some of them and hopefully unit 4 has great questions so you can make up for some of the lost marks in unit 3. That is what I'm hoping to do!!!
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    (Original post by Nightw0lf07)
    i agree with you. So it's A?

    It's the same for government borrowing, they don't need to BORROW (or spend) because of PFI straight away
    Yes, the answer was A. All other options were incorrect. PFI in real simple terms is just a private sector firm FUNDING a public sector project. So that the government does not need to borrow money in the short term to pay for it themselves - instead they pay in small increments every year or so to the private firm (like a rent)
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    Guys for 9a could you have said it was an oligopoly, a few large firms dominate the market, there's interdependence between firms and high barriers to entry and exit. Then working out the 5-firm concentration ratio as 83% and then the 3-firm concentration ratio at 75%?
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    (Original post by TheHenri)
    output V, i think it was B, where AC=AR
    I think Allocative efficiency is the right answer..but i did this question wrong too, but i'm pretty sure the other 7 I did will be correct...
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    (Original post by John_Boi)
    Does any one else think the 1st MCQ was evil?
    What was the first MCQ?

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    (Original post by John_Boi)
    Does any one else think the 1st MCQ was evil?
    Nope. Though it was fairly reasonable and clear.
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    i got two MCq wrong..... Shouldn't lost these easy marks


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    Overall a nice paper. I definitely feel that question 10 was a lot easier than 9.
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    (Original post by Boy_wonder_95)
    What was the first MCQ?

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    It was to do with external growth and milk
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    (Original post by AdzyN)
    Nope. Though it was fairly reasonable and clear.
    Has been clearer before and did cause some confusion.
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    (Original post by Boy_wonder_95)
    What was the first MCQ?

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    It's related to takeover/merger i think. I put (A)... vertical integration backward..pretty sure its correct, what about you?
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    (Original post by Nightw0lf07)
    No Option A was talking about a trait of interdependence, it was option B or C that said that firms were independent?
    Yes, it was definitely Option C saying that firms were INDEPENDENT, and A for INTERDEPENDENT.
 
 
 
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