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**********OFFICIAL OCR ECONOMICS F582 21st MAY 2014 THREAD************ Watch

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    (Original post by guyb121)
    I suppose you could, but I personally wouldn't overcomplicate things like that. It's much more simpler to say on things it would depend on e.g.

    The size of the initial current account deficit
    The PED for imports/exports
    Protectionist measures implemented by other countries

    and.....if theres a question about current account deficits say that policy objectives might conflict, for example it could be much more important to increase real GDP and reduce unemployment than it is to improve the current account situation.
    I understand thank you however how the conflict is created? As AD shifts to the right as X is greater than M due to the depreciation unemployment falls and output imcreases
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    Hi! I have the f582 exam on Wednesday and I'm really confident apart from on the topic of supply side policies and how they relate to the long run aggregate supply curve on the Keynesian diagrams? And how the policies increase LRAS in general? Any tips/advice would be most appreciated!😜
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    What are your predictions for Unit 2 exams?
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    (Original post by leftchr)
    I understand thank you however how the conflict is created? As AD shifts to the right as X is greater than M due to the depreciation unemployment falls and output imcreases
    Oh sorry, in that case the policy conflict may be that it causes demand pull inflation
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    (Original post by leftchr)
    What are your predictions for Unit 2 exams?
    B for Economics overall but an A for unit 2 exam
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    (Original post by JMG-Manchester)
    Hi! I have the f582 exam on Wednesday and I'm really confident apart from on the topic of supply side policies and how they relate to the long run aggregate supply curve on the Keynesian diagrams? And how the policies increase LRAS in general? Any tips/advice would be most appreciated!😜
    Increasing government spending on Education and Training - Because workers skill level increases - Productivity of workers increase - Labour is a factor of production so the government is increasing the availability of this factor of production thus AS increases (That's the one I like to use since its quite easy to understand)
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    (Original post by JMG-Manchester)
    Hi! I have the f582 exam on Wednesday and I'm really confident apart from on the topic of supply side policies and how they relate to the long run aggregate supply curve on the Keynesian diagrams? And how the policies increase LRAS in general? Any tips/advice would be most appreciated!😜
    Supply side policies such as Privatization, improvements in education and training, reduction in income taxation etc, what they are doing is effectively improving one of the four factors of production, this is why they will improve the Long-run aggregate supply curve, not the short-run (as there is a time lag associated with all of these supply side policies so they cannot work in the short run - apart from maybe a reduction in income taxation)

    For example education and training. By employing this policy, the government are improving the quality of labour (factor of production) that is coming through, and allowing them to develop a higher skill level and more qualifications, hence enabling them to gain more marketable skills that may be required in employment. Hence because they become more efficient, their output per worker hour goes up (improvement in productivity) thus the firm they work for will start to produce more goods and services more cost-efficiently than before, hence the firm has more resources to produce an even larger number of goods and services, thus the long-run AS of the economy has increased, improving Economic Growth and employment levels.
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    (Original post by JMG-Manchester)
    Hi! I have the f582 exam on Wednesday and I'm really confident apart from on the topic of supply side policies and how they relate to the long run aggregate supply curve on the Keynesian diagrams? And how the policies increase LRAS in general? Any tips/advice would be most appreciated!������
    If you can grasp AD/AS then this is really easy.

    Supply side policies aim to increase the productive capacity of the economy, usually by increasing the quality and quantity of factors of production. Examples include education/training to give the labour force more skills and make them more efficient and better at their jobs, deregulation to cut down the time spent by firms adhering to pointless laws (more time spent generating output) etc.

    They shift the LRAS curve right. This is because the productive capacity of the economy has increased. Think about the graph logically, if you're looking at at increase in productive capacity, is it likely that the LRAS curve is going to get 'longer' or 'shorter'? Obviously longer, so it makes sense that rightward shift could occur.
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    Guys can somebody explain how I would go about getting 3 marks if I wanted to talk about how consumer confidence increases consumer expenditure?
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    (Original post by tomixox)
    Guys can somebody explain how I would go about getting 3 marks if I wanted to talk about how consumer confidence increases consumer expenditure?
    I would say; if consumers are optimistic about the future eg expecting an increase in wage rate, they may decide to Spend rather than Save. So spending on Consumer goods increases, Consumption increase
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    (Original post by tomixox)
    Guys can somebody explain how I would go about getting 3 marks if I wanted to talk about how consumer confidence increases consumer expenditure?
    I would say 'consumer confidence occurs when people are speculating good thing to happen in the future in terms of income, inflation, economic growth etc. and therefore households are likely to save less as there is a reduction in fear about downturns in the economic cycle, hence increasing the marginal propensity to consumer, thus increasing expenditure.'
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    Essay predictions? Very worried for the 18 marker
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    (Original post by ZQ110)
    Quantitative easing is where the government buys financial assets from private sectors companies like banks, so banks will get an injection of cash, this increases the amount banks have to lend. so Interest rates fall.
    Banks have more money to lend, consumers have more money to spend.
    Therefore consumption increases, which boosts Investment, AD shifts right

    If AD shifts right, this will cause demand-pull Inflation. Inflation reduces International competitiveness, so Demand for the sterling will fall, causing the value of the sterling to fall (Depreciation)

    A fall in interest rate will increase consumption & investment due to lower costs of borrowing ect ect..... so demand-pull inflation again
    Hope that makes sense
    you could also add that due to the fall in interest rates from QE, there will be a flight of money (hot money) out of the county that foreign firms may have been saving in our banks to gain higher and safer rewards. This would mean that these foreign firms would be supplying the pound £ to the foreign exchange market, resulting in a shift outwards in the 'supply of £' curve, hence resulting in a depreciation of the currency
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    (Original post by Giroud12)
    Essay predictions? Very worried for the 18 marker
    Same! It can be on anything, I'm really hoping for an inflation or unemployment based question

    Anyone got my ideas for the 18 marker????


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    (Original post by CharlieR)
    I would say 'consumer confidence occurs when people are speculating good thing to happen in the future in terms of income, inflation, economic growth etc. and therefore households are likely to save less as there is a reduction in fear about downturns in the economic cycle, hence increasing the marginal propensity to consumer, thus increasing expenditure.'
    perfect thanks
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    Can somebody please explain the concept of governments bonds? I have a feeling there will be a three of four marker question on the relationship between AS and price level
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    Someone can tell me how to reduce budget deficit?
    Please tell me about austerity measuresd
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    what formulas / calculations do we need to know?
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    Im praying we get a paper like june 2010 - thought this was was very easy!
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    Around how many pages do you guys plan on writing for the 18 marker?
 
 
 
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