Hey there! Sign in to join this conversationNew here? Join for free
    Offline

    1
    ReputationRep:
    (Original post by zayn008)
    If you backed this up with Oil prices falling and that its cheaper production costs are being passed onto consumers then you're absolutely correct but to say deflation it's self has this effect is quite wrong, 1) you assume that consumers behave rationally 2) you must ask why are prices in the economy falling? Is it demand side or supply side where the output gap is bigger. both involve stimulating aggregate demand so both require demand side policies unless it's caused by left shift in LRAS which is quite unlikely since there hasn't been a recession (other than 08-09), and even if it did its still likely to be demand side like 2008 was
    Yeah I mentioned oil prices falling
    • Community Assistant
    • Welcome Squad
    Offline

    12
    ReputationRep:
    Community Assistant
    Welcome Squad
    (Original post by CosimaNiehaus)
    It was due to oil prices falling, said in extract A
    Oh yes, I remember.

    You are perfectly correct then, to say that SRAS would increase (reduced cost push, and demand-pull less likely) - I said that myself.
    As changes in factors of production are 'supply side shocks' which affect SRAS.

    I thought that you were talking about interest rates with regard to AS - my mistake.
    Offline

    1
    ReputationRep:
    (Original post by harryleavey)
    Oh yes, I remember.

    You are perfectly correct then, to say that SRAS would increase (reduced cost push, and demand-pull less likely) - I said that myself.
    As changes in factors of production are 'supply side shocks' which affect SRAS.

    I thought that you were talking about interest rates with regard to AS - my mistake.
    No worries! These exams have just really worried me :l
    • Community Assistant
    • Welcome Squad
    Offline

    12
    ReputationRep:
    Community Assistant
    Welcome Squad
    (Original post by Diastal)
    Thank you! I'm starting to believe that you're better than my teachers 😅
    I''m flattered. Although I highly doubt that. I've only been studying economics for like 9 months
    Offline

    1
    ReputationRep:
    someone give the answers for section A

    WHAT WAS THE CLAIMANT ACOUNT ONE?
    • Thread Starter
    Offline

    2
    ReputationRep:
    (Original post by agathecnsty)
    someone give the answers for section A

    WHAT WAS THE CLAIMANT ACOUNT ONE?
    Basically calculates the number of unemployed people claiming job seekers' allowance or unemployment-related benefits
    Offline

    1
    ReputationRep:
    (Original post by rosemondtan)
    Basically calculates the number of unemployed people claiming job seekers' allowance or unemployment-related benefits
    that wasn't in the options though
    it was something like "weekly in interview" and " increase in workforce" for the options
    Offline

    2
    ReputationRep:
    (Original post by agathecnsty;[url="tel:65101435")
    65101435[/url]]that wasn't in the options though
    it was something like "weekly in interview" and " increase in workforce" for the options
    Oh, you're talking about the question which asked "which of these would result in a decrease in claimants" and I said that an increase in workforce would reduce the number of claimants, as less people will be seeking benefits
    • Thread Starter
    Offline

    2
    ReputationRep:
    (Original post by Diastal)
    Oh, you're talking about the question which asked "which of these would result in a decrease in claimants" and I said that an increase in workforce would reduce the number of claimants, as less people will be seeking benefits
    I picked a compulsory weekly interview
    Offline

    2
    ReputationRep:
    I think you'd get the marks of you describe it as it were like the ILO, i.e unemployed for 4 weeks but actively seeking for work within 2 weeks. as long as you say it just measures the unemployed seeking benefits.
    Offline

    2
    ReputationRep:
    (Original post by harryleavey)
    Prices are not cheaper.

    If all prices in the UK economy decrease (including everyone's wages) consumers do not find that anything is 'cheaper' in the sense you have described.
    However foreign consumers will find that buying UK goods are cheaper, as long as their currency is not also deflating.

    It's not that the MPC will be unable to control interest rates. They can control interest rates as much as they want (unless you are discussing the fact that the base rate may not cause high street interest rates to fall due to low bank confidence and financial health?). The issue is that once they make interest rates 0% (or 0.5% in extract), there is not much more they can do (besides QE). A liquidity trap is faced.

    And your point about interest and AS is not economically correct.
    Interest rates are a form of monetary policy. And therefore are demand-side only. I also, don't quite understand your reasoning behind deflation causing costs of production to be reduced? (Unless you are referring to depreciation of the exchange rate?)
    (Although interest rates may affect investment, and investment affects AS we do not say that interest rates cause AS to shift - Also investment affects LRAS, not Short)

    I hope this helps. Sorry that I have just ripped apart your analysis
    Do you not think that he might be referring to the fall of oil prices - leading to the costs of production falling. It is a transmission mechanism after all 🤗
    Offline

    7
    ReputationRep:
    (Original post by liamlaw1320)
    ah yeah that's it cheers buddy. Pretty sure I talked about the standard of living going down, the negative effect on the circular flow of income for the first one. Second I talked about an increase in competitiveness then evaluated with the fact that we only export high end services/technology etc. then said the negative effect that it would have on consumer consumption, they would wait for prices to fall further etc.
    I think I made some reference to the situation in japan
    Offline

    2
    ReputationRep:
    (Original post by rosemondtan;[url="tel:65103009")
    65103009[/url]]I picked a compulsory weekly interview
    Yeah I was thinking that at first, but then if you really need the money you wouldn't really mind going through the interview.
    • Thread Starter
    Offline

    2
    ReputationRep:
    (Original post by Diastal)
    Yeah I was thinking that at first, but then if you really need the money you wouldn't really mind going through the interview.
    But it would serve to put people off - increasing the size of the workforce only creates more unemployment if nothing changes
    Offline

    1
    ReputationRep:
    (Original post by rosemondtan)
    But it would serve to put people off - increasing the size of the workforce only creates more unemployment if nothing changes
    I agree. I put the interview one too! 👍🏿
    • Thread Starter
    Offline

    2
    ReputationRep:
    (Original post by Kantth)
    I agree. I put the interview one too! 👍🏿
    Cheers haha I like the emoji :woo:
    • Community Assistant
    • Welcome Squad
    Offline

    12
    ReputationRep:
    Community Assistant
    Welcome Squad
    (Original post by Dnkz7)
    Do you not think that he might be referring to the fall of oil prices - leading to the costs of production falling. It is a transmission mechanism after all 🤗
    Yes, i realised that was what they were referring to after
    Offline

    2
    ReputationRep:
    (Original post by rosemondtan;[url="tel:65105661")
    65105661[/url]]But it would serve to put people off - increasing the size of the workforce only creates more unemployment if nothing changes
    How does increasing the size of the workforce lead to more unemployment?

    And if, for example, you were unemployed, you would want to have benefits because it's free money, and so you wouldn't mind having an interview. Also, surely by increasing the workforce it would mean that less people are becoming unemployed? Meaning that less people are claiming benefits?
    • Thread Starter
    Offline

    2
    ReputationRep:
    (Original post by Diastal)
    How does increasing the size of the workforce lead to more unemployment?
    I'm pretty sure it works the other way, decreasing unemployment would increase the size of the workforce but not the other way. Anyway, wasn't very sure about this question too so that was just my train of thought
    Offline

    2
    ReputationRep:
    Guys, I know this question is not related to economics, but I was just wondering whether or not universities like you taking gap years or not. Because I was looking to apply to LSE and wanted to study economics there, but they require you to do maths and have an A* in it. Since I'm not doing maths at the moment, I was planning on doing intensive maths after college and I don't know whether or not they'll be okay with that? Like I'll be having a gap year but doing maths during that year for the maths qualification needed to study economics at LSE.
 
 
 
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    Has a teacher ever helped you cheat?
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Write a reply...
    Reply
    Hide
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.