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    (Original post by jawain04)
    yes - they have very high welfare payments which along with the SGP stops them being able to use fiscal policy to get out of the recession.
    cheers also do you have reasons which suggest the ECB can set rates across countries instead of the obvious reasons why they cant?

    i got they can balance out countries with one rate
    if one country has high inflation and the other has low then setting a rate between could mean the best of both worlds and stablity

    but of course its highy unlikely lol im probaly wrong with this point anyway.
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    (Original post by viksta1000)
    the fact that their unemployment rates are debatably the worst in europe springs to mind
    • but the fact that their largest industry is 'non-tradeable' is the main driving force behind the slow economic recovery
    • high Euro value makes properties more expensive for people outside the Eurozone, demand for property fell, property prices plumeted
    • interest rates at the time were increased by the ECB, borrowing become more expensive, consumers could no longer afford to take out mortgages to buy houses
    • the fact that their european neighbours are also in financial meltdown doesn't help as there's no market for exports
    • tourism is a big market in spain...but no tourists with the crisis as people not willing to 'waste' disposable income on holidays with low consumer confidence
    i think you will get 100 ums
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    (Original post by nik2111)
    i think you will get 100 ums
    well we can all dream

    a modest 80 ums will suffice

    what ums/grade are you after?
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    i want 75-80 ums i need 40-50 i hope a bit concerned with the last extract theres no clear sort of questions that springs straight out the page
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    (Original post by nik2111)
    i want 75-80 ums i need 40-50 i hope a bit concerned with the last extract theres no clear sort of questions that springs straight out the page
    Its definately going to be about trade/liberalisation

    I think we're going to have to analyse impacts of liberalisation on international trade
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    (Original post by nik2111)
    cut tax = more disposable income = more spending = increased AD

    evaluation point- this doesnt always happen in this way ?
    I'd say that depending on whther the economy is operating close to full capacity, it will lead to inflation in
    the longer term where the LRAS curve shifts to the right to give a SRAS curve (so positive output gap, therefore the potential growth of the economy will be reduced, the full employment point decreases) which in turn will result
    to A reduction of the labour force, lower AD, rising unemployment rate, Real GDP shrinks.
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    so the goods things and bad things about removing barrieries to entry and promoting trade across the world
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    (Original post by nik2111)
    so the goods things and bad things about removing barrieries to entry and promoting trade across the world
    look in the book pg 245 benefits of interntional trade

    Comment on the effectiveness of fiscal stimulus policies in helping to reduce the depth of the recession

    1. Limits - SGP
    2. crowding and interest rates
    3. Lower investment due to crowding out (higher r.o.i) if they borrowing in which case they are huge budget deficit
    4. multipler leakeages and injections and accelerator effect
    5. Depends on the severity, the more severe it is the effect is likely to be less
    6. which type of policy
    7. Business confidence and consumer confidence


    ECB cannot set interest rates fit for all, this is due to a lack of convergence. thereby some countries would suffer from lower growth and other countries would wnjoy high rates of growth. You could also bring in the core periphery problem. This can cause structural and regional unemployment
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    cheers ill go over that today , i rekon floating vs fixed will come up tomorow and ECB being able to set interest rates for sure 10 mark as its the point over 2 extracts
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    Anyone going to study economics at uni ?
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    (Original post by ajayhp)
    look in the book pg 245 benefits of interntional trade

    Comment on the effectiveness of fiscal stimulus policies in helping to reduce the depth of the recession

    1. Limits - SGP
    2. crowding and interest rates
    3. Lower investment due to crowding out (higher r.o.i) if they borrowing in which case they are huge budget deficit
    4. multipler leakeages and injections and accelerator effect
    5. Depends on the severity, the more severe it is the effect is likely to be less
    6. which type of policy
    7. Business confidence and consumer confidence




    [/LIST]
    what does crowing in and out mean
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    (Original post by nik2111)
    what does crowing in and out mean
    Crowding out is when the government borrows and reduces the funds available for private sector investment or rasies the costs of investment by raising market interest rates
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    (Original post by ajayhp)
    Crowding out is when the government borrows and reduces the funds available for private sector investment or rasies the costs of investment by raising market interest rates
    once the goverment borrows this money what does it use it for?
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    investment or government spending "golden rule"
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    is there any draw backs to international trade? also is it worth going over development and susatianablity chapter in much detail as the material doest really focus on this aspect much
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    (Original post by mqt)
    wow, that's quite hard..
    well...define lack of convergence... monetary union...
    erm..talk about short term effects... long term effects...
    maybe how the EU could fix this?...it says...affect the viability of the EU... so i think maybe it's suggesting how it could damage in the long term and how this can be fixed? :/ oh i hope that doesn't come up! i couldn't know how to answer...i'm going to try and figure this out! lol
    I talked to my teacher and she said something along the lines of that paragraph should be saying how if the Euro area was an OCA, and there were fiscal transfers between strong and weak economies, good levels of free trade, and good labour flexibility then the problems of a 2 speed euro (which arises from lack of convergence) can be overcome.

    Tbh this sounds a bit dodgy to me, cos the euro area isnt an OCA, therefore the viability of the MU is still being threatened. But a short paragraph to show that you understand the other side can happen should be enough? If you get me....
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    na i wouldnt
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    (Original post by ajayhp)
    na i wouldnt
    was that the answer to my question? lol
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    (Original post by nik2111)
    is there any draw backs to international trade? also is it worth going over development and susatianablity chapter in much detail as the material doest really focus on this aspect much
    Domestic unemployment? (more imports so less domestic production needed)
    And worth knowing a little about development as may be question on distinguish between ec growth and ec development. And may be a 20marker related to how trade can benefit development. So as long as you know pos/negs of trade, and can stick a few key development terms and concepts in (eg poverty cycle, etc etc) should be fine
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    (Original post by Hubb)
    Domestic unemployment? (more imports so less domestic production needed)
    And worth knowing a little about development as may be question on distinguish between ec growth and ec development. And may be a 20marker related to how trade can benefit development. So as long as you know pos/negs of trade, and can stick a few key development terms and concepts in (eg poverty cycle, etc etc) should be fine
    so for that would you say that openning trade can help development in countries through raising GDP from trade sorta thing?
    yh i think that domestic unemplyoment is a good point
 
 
 
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