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    (Original post by nik2111)
    anyone know some pro's and cons of being in a monetary union? i know 1 or two but not really in depth
    Pros:
    Can be a major world currency
    Maintained price stability (low inflation)
    Higher volume of sales : Further economies of scales
    Falling unemployment
    Lower transaction costs
    Higher growth = higher employment = higher income = higher investment
    Free movement of people
    Price transparency = higher competition
    Countries will produce over their Productive Possibilty Curve, but to their Trading Possibility, Curve

    Cons:
    The better off countries will enjoy the higher growth they have more coparative advantage, and also, they have more spare capacity, so, they have the ability to increase their productivity therefore, they will have higher benefits of economies of scales.
    Also, Monetary unions are Very sensible to external shocks if there is a lack of convergence, so once there is an external shock:
    - can have negative output gaps
    - risk of deflation within the monetary union
    - rising unemployment
    - Because of the lack of convergency, the exchange rate might be too high for the under performing countries and too low for the better economies
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    (Original post by nini27)
    Pros:
    Can be a major world currency
    Maintained price stability (low inflation)
    Higher volume of sales : Further economies of scales
    Falling unemployment
    Lower transaction costs
    Higher growth = higher employment = higher income = higher investment
    Free movement of people
    Price transparency = higher competition
    Countries will produce over their Productive Possibilty Curve, but to their Trading Possibility, Curve

    Cons:
    The better off countries will enjoy the higher growth they have more coparative advantage, and also, they have more spare capacity, so, they have the ability to increase their productivity therefore, they will have higher benefits of economies of scales.
    Also, Monetary unions are Very sensible to external shocks if there is a lack of convergence, so once there is an external shock:
    - can have negative output gaps
    - risk of deflation within the monetary union
    - rising unemployment
    - Because of the lack of convergency, the exchange rate might be too high for the under performing countries and too low for the better economies




    just the right person to ask lol
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    could you argue a con is that countries only have fiscal policy to influence there economy as opposed to non members
    also there is trade diversion as there is a common tariff agaisnt non- EU members not sure if thats good
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    (Original post by nik2111)
    could you argue a con is that countries only have fiscal policy to influence there economy as opposed to non members
    also there is trade diversion as there is a common tariff agaisnt non- EU members not sure if thats good
    yeah but they don't have full fiscal control because of the growth and stability pact

    and trade diversion is bad, its going from a competitive producer to an uncompetitive one (best to just learn the diagram and draw it)
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    (Original post by 1.2.3.)
    yeah but they don't have full fiscal control because of the growth and stability pact

    and trade diversion is bad, its going from a competitive producer to an uncompetitive one (best to just learn the diagram and draw it)
    basically does trade creation quotas and diversion all lie on the same diagram just showing diff movements in imports?
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    (Original post by nik2111)
    basically does trade creation quotas and diversion all lie on the same diagram just showing diff movements in imports?
    not sure (havent started proper revision yet but i did this exam in jan), but if i remember right they might be the same diagram just with different labels
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    Right, I know it's been said before, but 10/20 marker questions - the 20 will likely be on trade liberalisation. What's the guess for the 10?
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    (Original post by revisionnightmare)
    Right, I know it's been said before, but 10/20 marker questions - the 20 will likely be on trade liberalisation. What's the guess for the 10?
    Probobly on how monetary union and economic unions caused the problems of the PIIGS.
    And commenting on the exptent to which supply side reforms will help economic performance of the PIIGS

    Thats what might come up
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    any1 got good essay plans for:

    trade liberalization

    trade liberalization and international agreements i.e. DOHA
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    How do the figures here:

    http://www.gecodia.com/Euro-Area-GDP-Growth_r119.html

    match the figures in the table in the case study? Where the table says the country was slipping into a recession...it wasn't....
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    (Original post by 1.2.3.)
    yeah but they don't have full fiscal control because of the growth and stability pact

    and trade diversion is bad, its going from a competitive producer to an uncompetitive one (best to just learn the diagram and draw it)
    is the trade diversion diagram the same as a trade creation diagram and if they are are they both the opposite of a tariff diagram, sorry im really confused :confused:
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    (Original post by ajayhp)
    any1 got good essay plans for:

    trade liberalization

    trade liberalization and international agreements i.e. DOHA
    i would say
    Good
    1. trade creation/using the diagram
    2. economies of scale due to specialisation
    3.increased competition on domistic firms to be effiecent

    bad
    1. trade diversion
    2. develped countries have common high tariff barrieirs which means that it will be hard for developing countries to export due to the tariffs
    3. developing countries will produce argiculture goods but wont generate enough income to buy machinary for example so a over reliance on primary goods will mean free trade may not benefit them

    evulation with relation to the doha round
    the doha round is failing due to developed countries not willing to remove current trade barriers to non members of there unions
    2. unequal wealth distribution

    i think something along these lines any other ideas from people?
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    i've neglected this exam till yesterday, i printed out the case study yesterday, and now going to go through all the extracts. Any1 got any tips on what i should focus my revision on ? Isit possible to get a decent grade without knowing the case study in detail ?
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    (Original post by fidi64)
    is the trade diversion diagram the same as a trade creation diagram and if they are are they both the opposite of a tariff diagram, sorry im really confused :confused:
    i think trade deiversion occurs when there are more quotas

    for example the uk used to trade with new zealand but beacuse of common tariffs to non members of the EU when the UK joined the EU they had to switch to france as it costs to much to go to new zealand

    i feel you would show this by a increase in tariffs on the diagram ?
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    Anyone else hitting big ass nerves?
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    (Original post by bijesh12)
    i've neglected this exam till yesterday, i printed out the case study yesterday, and now going to go through all the extracts. Any1 got any tips on what i should focus my revision on ? Isit possible to get a decent grade without knowing the case study in detail ?
    Get hold of the economics toolkit asap - I'm using my phone so can't send it to you. Then just revise trade liberalisation, FDI, monetary union and supply side reforms - can anyone add to this list? Exchange rate systems?

    Other than that go back to page 12 or so and read some of the essay plans right up until this page. Other than that if you know your basic macroeconomics you could probably blag at least a B. If you know trade lib well - very likely that'll be the 20 marker - an A would easily be doable providing grade boundaries are what they usually are (40-46 for an A, although jan's paper was easy)
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    (Original post by 06hwhelpton)
    Anyone else hitting big ass nerves?
    Yeah, a little!
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    (Original post by revisionnightmare)
    Get hold of the economics toolkit asap - I'm using my phone so can't send it to you. Then just revise trade liberalisation, FDI, monetary union and supply side reforms - can anyone add to this list? Exchange rate systems?

    Other than that go back to page 12 or so and read some of the essay plans right up until this page. Other than that if you know your basic macroeconomics you could probably blag at least a B. If you know trade lib well - very likely that'll be the 20 marker - an A would easily be doable providing grade boundaries are what they usually are (40-46 for an A, although jan's paper was easy)
    ive got some ATP companion, that's the toolkit right ?... I know FDI, and a bit of monetary union. The last paper was more focused on trade right.. Isit safe to assume this paper will be more about Development and the Macro Policies, and all that..
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    (Original post by revisionnightmare)
    Get hold of the economics toolkit asap - I'm using my phone so can't send it to you. Then just revise trade liberalisation, FDI, monetary union and supply side reforms - can anyone add to this list? Exchange rate systems?

    Other than that go back to page 12 or so and read some of the essay plans right up until this page. Other than that if you know your basic macroeconomics you could probably blag at least a B. If you know trade lib well - very likely that'll be the 20 marker - an A would easily be doable providing grade boundaries are what they usually are (40-46 for an A, although jan's paper was easy)
    yh furthermore
    know the pros and cons of fiscal stimulus packages
    know pros and cons of the EU montary union ie. hard to set rates convergence..
    fixed and floating pro's and con's
    unemployment wether its due to competitivness or the goverments spending on benefits
    trade liberisation pros and cons evaulation relate to current issues in doha round i.e developed countries not agreeing to remove tarifs from develping countries.
    have some knowledge on unit labour costs and why they have changed gone up/ also know about producer surplus and why that has changed

    i think thats pretty much all of the extracts big ideas anyone think of more?
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    Just wondering how you guys go about structuring the 20 marker questions? Say for example, "Discuss the advantages to Developing Nations of agreements such as the Doha Trade Round to promote trade liberalisation. (20)"

    I mean, we all do the intro, define the key terms etc etc, but then do you structure it as:

    Advantages of trade liberalisation to these nations:
    -Adv 1
    -Adv 2
    etc

    Disadvantages of trade liberalisation to these nations:
    -Disadv 1
    -Disadv 2
    etc

    Any further evaluative points, for example, what would Keynesian economists do as opposed to free market ideologists.

    Followed by a conclusion.

    OR

    Effect of trade liberalisation 1: Potential increases in GDP.
    Yes this may happen...
    No this may not happen...

    Effect of trade liberalisation 2: Increase in competition.
    Good because...
    Bad because...

    And so on and so forth, basically combining advantages and disadvantages together.

    I've always adopted the first structure and it's not served me too badly in the past but the impression I get sometimes is that you are in fact meant to structure it the second way.

    Any thoughts?
 
 
 
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