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Edexcel Economics Unit 4 Global Economy Discussion Thread (10.June.2014) watch

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    1)savings and harrod domar and investment

    2) I wrote about foreign exchange gap resultin in low saving and falling foreign currency may lead government finance to fall so constraint to growth.

    3 ) rich may save abroad so more outflow leading to capital flight. Whereby country will suffer a further fall in trade and money supply within the economy so no more investment. Low multiplier too.
    4) finally low saving would mean increased debt burden leading the country to be dependent on another country.

    Evaluation

    Improving tourism in countries with safaris such as kenya can reduce output gap.

    Saving might sometimes lead the economy to suffer more according to paradox of thrift.

    Thirdly I prioratized that product dependency is a major constraint on growth


    Wat do u think about this answer


    Is it correct? Anyways I expanded it further.
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    (Original post by mhassan)
    How comes most did the second DRQ. First one was so much easier, only one difficult 10 marker.
    Yah even im doubtful about that. Q4 was far better except for tht 10 mark. Well what is the answer for that? Can we talk about urban and rural?
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    (Original post by Kutie Karen)
    You get extra marks if you do.
    Can you not get hight marks if you don't?


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    (Original post by acl19)
    I wrote about uk's inital cost of olympics an building the stadium may not being present anymore and evaluated saying that it may be a PFI scheme so they may still be leasing it, correct? And i also said increase in tax revenue from VAT as there was an increase in tourists buying Uk goods

    wasn't the 1a question on why the budget deficit decreased in european countries?
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    (Original post by neji123)
    For section A question 1 I did:

    (a) Reasons why the budget deficit has decreased:
    1. Joining of the EMU means countries have to follow the Growth and Stability Pact which means governments cannot have a deficit of 3% per annum
    2. Reduction in public expenditure (e.g. healthcare cuts)
    3. Raising taxation

    (b) Economic effects of a rise in marginal income tax:
    1. MNC's relocate abroad to take advantage of lower taxes on profits (I now realise this is wrong because income tax doesn't affect MNC'S does anyone know if I'll be penalised for this?)
    2. More resources devoted to monitoring the informal economy and prevent tax evasion
    3. Capital flight as skilled/high income workers move abroad
    4. Less efficiency in the economy due to the deterrent effect of high income taxes

    Did 3.5 pages for (a) and 4 for (b) I think... Hopefully it goes well

    I also answered question 1 and i also put

    raising taxes
    cutting public expenditure

    i think your third one is right, but did you evaluate it to say that the criteria have been loosened since the recession?

    as my third point i put that due to economic growth which has slightly occurred and the budget deficit has improved due to higher consumption, lower unemployment, and therefore higher tax revenues.

    i also split raising taxes into both direct and indirect
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    (Original post by 4.2.0)
    Sorry yeah, current account imbalances, I said deficit cause all the countries had deficits except for Germany
    i commented on how ireland went from a deficit to a surplus
    and how in every country apart from germany the deficit increased

    i used lower demand for exports to explain this
    as well as the fact all the countries i.e. spain ireland greece portugal had to be bailed out and therefore had low inflation/deflation meaning their prices are low i.e. why everyone is holidaying in greece cause its so cheap
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    (Original post by lizzie196)
    Yeah, well i took it in the exam to mean it was just the effects of a general increase in tax rates, so i didnt mention any country, and implicitly implied i was talking about the UK, just really hope that they dont cap the mark at 24/30 for not referencing a specific country or France. I dont think they will expect any specific examples from France so i wouldnt worry about it
    i used the uk as an example from when we raised our highest income bracket to 50% and just said this may happen in france because i have no idea about the french economy
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    (Original post by mxjc278)
    ok, I misunderstood 1a, and instead of defining budget deficit I put the definition of trade deficits.
    I still made a load of applicable points, but I set out the question in the wrong way.

    Would I be able to get at least 10/20 for that?

    Also in the question about imbalances, was it right to talk about a current account deficit?

    Panicking. Thanks!
    last year my friend made the same mistake but as her points weren't actually relevant she got 0 if some of your points apply for both like economic growth??? you might get a few marks
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    i think i did the third essay wrong :''''''(
    it was assess the view that the savings gap is the biggest constraint on growth.
    my structure was to say how savings gap is the biggest constraint then counter it by saying no another factor is bigger e.g primary product dependency...

    just realised the point was meant to be how another factor is bigger, then evaluate that
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    (Original post by shankpink)
    ]



    1)savings and harrod domar and investment

    2) I wrote about foreign exchange gap resultin in low saving and falling foreign currency may lead government finance to fall so constraint to growth.

    3 ) rich may save abroad so more outflow leading to capital flight. Whereby country will suffer a further fall in trade and money supply within the economy so no more investment. Low multiplier too.
    4) finally low saving would mean increased debt burden leading the country to be dependent on another country.

    Evaluation

    Improving tourism in countries with safaris such as kenya can reduce output gap.

    Saving might sometimes lead the economy to suffer more according to paradox of thrift.

    Thirdly I prioratized that product dependency is a major constraint on growth


    Wat do u think about this answer


    Is it correct? Anyways I expanded it further.
    your points on why savings is the biggest contraint are correct.
    however your evaluations are wrong. they were meant to be other factors that are a bigger constraint(so only your last eval is valid)
    sorry.
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    i answered question 1 and 5

    1a i put

    cutting public expenditure - long term fall in quality of public services
    increasing indirect taxes - inequality
    increasing direct taxes - disincentives to work
    economic growth - but we are in a recession and growth and confidence are low so though this may effects it will not entirely be due to this

    conclusion
    i prioritised my points
    and i did something else i can't remember

    1b

    the country was france so i tried to relate my answers

    i put
    disincentives to work - i commented on how it was only for the high income earners so it is more like to stop them seeking overtime or promotion rather than staying on benefits
    tax avoidance tax evasion - gave example of Phillip Green in the uk who avoids paying his taxes commented on how media attention and pressure group may cause them to pay anyway
    tax revenues increase - evaluation luffa curve
    capital flight (move out the country) - likely as europe have free movement of labour and countries like the UK only have max 40% tax
    disincentives for entrepreneurial activity - can't get their profits if they start their own business - but confidence is low anyway so not sure if this is currently likely to happen

    conclusion
    again i prioritised and commented on the overall weakness of the economy so any contractionary policies could lead us into a triple dip recession so we have to be carefel
    this is also a withdrawal from the economy so will have negative effects on AD

    for question 5

    a) definine international competitiveness gave measure and 2 example from the data and explained

    b)was this the diagram one?? cause i drew shifts in AD but i really had no clue

    c) i did the minimum wage
    and productivity affecting unit labour costs
    concluded i talked about how real wages have fallen but nominal have continued to rise slowly
    also how costs like national insurance etc will affect costs even though currentl some countries in the uk don't have to pay it to help boost the economy

    d)i have no idea what this question was

    e) i ran out of time on this questions so i think i only got 2 good points down i don't remember the exact question
    i think it was about trade liberalisation

    to which i put lowering the minimum wage as the text said it was very high
    i also put investing in educate and training to improve the productivity of the workforce
    and i put easing up regulation to make hiring and firing easier
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    (Original post by JessyVis)
    I also answered question 1 and i also put

    raising taxes
    cutting public expenditure

    i think your third one is right, but did you evaluate it to say that the criteria have been loosened since the recession?

    as my third point i put that due to economic growth which has slightly occurred and the budget deficit has improved due to higher consumption, lower unemployment, and therefore higher tax revenues.

    i also split raising taxes into both direct and indirect
    For my evaluation on the EMU I said that some countries may decide to leave so that they can change their fiscal policy according to their own macroeconomic interests, I forgot to mention that the criteria has been loosened but I think that the other point I mentioned should still be valid. What did you for 1b?
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    (Original post by TheHenri)
    Hard paper I believe, but I still think I managed it quite well.

    Did Q3 and Q5.

    3a was a bit unexpected and not that easy to structure into 3 KAA and 2 EV so dont know how I did on that. I looked at demand side econ growth and supply side and looked at HDI components, saying that growth did a lot to increase GDP per capita but demand side growth does not contribute signficantly to other factors(health, education) then i said as evaluation that growth can also cause inequality, hence not improving development, suggesting that development is not always a direct cause of growth but my end argument was that growth does quite a lot to push development, hence I agreed with the question.

    3b was very nice, used 4 factors and then evaluated well I think.

    Question 5 was really hard I found. Why were so unspecific on the 8marker. "Comment on" ? Come on, at least say causes or what we have to comment on exactly. I basically said that GDP did grow differently due to competitiveness reason, put in data and some evaluation, but that was weird.

    Than c with unit costs I put minimum wage and immigration policy. Like less strict immigration policy so no cheap labour immigrating, so higher labour costs, dont know fi this is valid though.

    for d I looked at Greece with defecit and then Germany as an example with surplus and commented on benefits of balancing, for Greece to push econ growth as export growth is strengthened and for Germany that to prevent inflation as too much export demand increases price level

    for e I was clueless for 5 minutes or something, then i put minimum wage, extra bonuses from government for hard work, and quickly mentioned hiring and firing from the extract. But this is not going to be that good I think

    My problem was that for the questions I always put own factors and didnt even read the extract until the end Only used application marks through figures...

    I hope this is still an A* though, I think u could lose up to 20-25 marks to still get 108UMS as it was quite a difficult paper. So fingers crossed.
    I pretty much did the same thing as you! For the unit labour costs i wrote about minimum wage and inflation and how it leads to the wage-price spiral and linked it to how inflation erodes people's wages therefore workers will demand higher wages, thus increasing unit labour costs, does that make sense?

    I wrote about immigration policy in the 15 mark labour market question, which doesnt sound right because i dont think immigration policy is a labour market policy :/
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    (Original post by Swaany)
    I pretty much did the same thing as you! For the unit labour costs i wrote about minimum wage and inflation and how it leads to the wage-price spiral and linked it to how inflation erodes people's wages therefore workers will demand higher wages, thus increasing unit labour costs, does that make sense?

    I wrote about immigration policy in the 15 mark labour market question, which doesnt sound right because i dont think immigration policy is a labour market policy :/
    Was that for factors that influence unit labour costs? I did wages and productivity, not sure if it's right though :/


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    I'm sorry but 3a was asking how dependant economic development is on economic growth so wouldn't you talk about how economic development can take place without economic growth through strategies such as micro financing tourism attracting TNC'S and then evaluate by saying they lead to economic growth and use standard evaluations like why they may not fully be successful in promoting economic development?
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    How many marks would the diagram get for 5b?


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    For 3a wouldn't you talk about how developing countries can achieve development through micro financing,improving their tourism sector or attracting TNC activity as a means of encouraging development without directly linking it to growth?
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    For 5 what figures did they give for GDP was it GDP or expected GDP growth??


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    (Original post by werkintwerkin)
    i think i did the third essay wrong :''''''(
    it was assess the view that the savings gap is the biggest constraint on growth.
    my structure was to say how savings gap is the biggest constraint then counter it by saying no another factor is bigger e.g primary product dependency...

    just realised the point was meant to be how another factor is bigger, then evaluate that
    I'm sure you had to do a point on savings gap and three other points of constraining economic growth. Then obviously evaluate each factor.

    There's probably many different ways of structuring the essay.
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    (Original post by Lilac.vogue)
    I'm sorry but 3a was asking how dependant economic development is on economic growth so wouldn't you talk about how economic development can take place without economic growth through strategies such as micro financing tourism attracting TNC'S and then evaluate by saying they lead to economic growth and use standard evaluations like why they may not fully be successful in promoting economic development?
    I did a similar structure. Did two/three points on how development was determined by economic growth and then evaluated how development was also influenced by aid, micro finance and for some reason I did debt cancellation.
 
 
 
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