Question spotting for F585 Economics The Global Economy OCR A level June 2011

Oh yeah, i get it in terms of that. Thanks!

Can I just point out aswell guys...keep your eye on the news...BBC/SKY/Bloomberg...as you might pick out a few arguments for tomorrow with the Greece huhaa going on at the moment

Good Luck folks! :biggrin:

Good advice! But how are you so good at economics? Have you been puting in solid work all year round or is your teacher really good?

Reply 582

username350927

14

Original post by xChelsea

It's only fixed against other members of the eurozone but not against other currencies such as the dollar.

Its not fixed against other member states. You don't go and exchange euro for euro. That's like me saying the scottish pound is fixed against sterling pound.

Reply 583

Elponchis_LOL

Original post by jess-e-bee

how does a depreciation of a currency increase inflationary pressures?!
hoping exchange rates doesn't come up..but it probably will do!

it makes exports cheaper for foriegn consumers, and imports more expensive for domestic consumers. this leads to a surplus current account (trade balance) which is a factor of aggregate demand so creates demand pull. Also it makes imports more expensive so if its inelastic price of demand, consumption of import wont decrease but prices will rise

Also bring in J curve for evaluation

Reply 584

Elponchis_LOL

Original post by loki276

Its not fixed against other member states. You don't go and exchange euro for euro. That's like me saying the scottish pound is fixed against sterling pound.

lol, it is fixed, its just that purchasing power parity is different between countries. One euro is always worth one euro! lol european central bank when collecting euro's, wont go 'oh this euro is worth 2 euros because its from germancy' 'but this euro is worth half a euro because its from spain'

(edited 12 years ago)

Reply 585

ajayhp

3

so what is the 20 marker prediction

Reply 586

Iram0105

any one know what
'period of fiscal austerity'
measn...?

Reply 587

xChelsea

Original post by loki276

Its not fixed against other member states. You don't go and exchange euro for euro. That's like me saying the scottish pound is fixed against sterling pound.

You know what i mean!
It's effectively fixed because they can't devalue/revalue it due to sharing it with other members..

Reply 588

jess-e-bee

Original post by Elponchis_LOL

it makes exports cheaper for foriegn consumers, and imports more expensive for domestic consumers. this leads to a surplus current account (trade balance) which is a factor of aggregate demand so creates demand pull. Also it makes imports more expensive so if its inelastic price of demand, consumption of import wont decrease but prices will rise

Also bring in J curve for evaluation

Thanks!

Reply 589

xChelsea

Original post by Iram0105

any one know what
'period of fiscal austerity'
measn...?

Fiscal stimulus aimed at reducing the budget deficit i think :smile:

e.g. Increasing tax, reducing government spending.
Basically, similar to what our government is doing now.

(edited 12 years ago)

Reply 590

nini27

Hello

Can someone explain what is the link between FDIs and trade liberalisation please?
And also, how lower Interest rates will affect FDIs, because until now I thought that the lower the IR the higher the FDIs as MNCs will see it as a rising consumption and therefore seize the opportunity? But, someone mentioned that higher interest rates would attract FDIs and I don't understand :/

Reply 591

bijesh12

13

Original post by Elponchis_LOL

it makes exports cheaper for foriegn consumers, and imports more expensive for domestic consumers. this leads to a surplus current account (trade balance) which is a factor of aggregate demand so creates demand pull. Also it makes imports more expensive so if its inelastic price of demand, consumption of import wont decrease but prices will rise

Also bring in J curve for evaluation

Wouldn't it be just enough to say : It reduces prices of exports, therefore making exports more attractive, and imports are comparably more expensive. Consumption increases, and AD shifts out, leading to a price increase.

Do you have to include tht J curve thing, how do you manage to bring all these points together !damn !

Reply 592

username350927

14

Original post by Elponchis_LOL

lol, it is fixed, its just that purchasing power parity is different between countries. One euro is always worth one euro! lol european central bank when collecting euro's, wont go 'oh this euro is worth 2 euros because its from germancy' 'but this euro is worth half a euro because its from spain'

Again not fixed. Its the same currency. You can't say that you fixed you currency to your currency. There is no fixed exchange rate as there is no exchange rate between member states

Reply 593

bijesh12

13

Whats a Two Speed Euro Area ?

Reply 594

Elponchis_LOL

Original post by loki276

Again not fixed. Its the same currency. You can't say that you fixed you currency to your currency. There is no fixed exchange rate as there is no exchange rate between member states

hmm your right, just being pedantic i spose
it says currency are fixed between members of EU in tutor2u toolkit so i think you can use the word 'fixed'

Reply 595

username350927

14

Original post by xChelsea

You know what i mean!
It's effectively fixed because they can't devalue/revalue it due to sharing it with other members..

I do but the two are seperate things. One is the eurozone wheras fixed would be something like the erm. The two share some similar qualities but are massively different

Reply 596

jess-e-bee

Original post by bijesh12

Whats a Two Speed Euro Area ?

the variation between average growth rates achieved by countries inside the monetary union

Reply 597

bijesh12

13

Original post by nini27

Hello

Can someone explain what is the link between FDIs and trade liberalisation please?
And also, how lower Interest rates will affect FDIs, because until now I thought that the lower the IR the higher the FDIs as MNCs will see it as a rising consumption and therefore seize the opportunity? But, someone mentioned that higher interest rates would attract FDIs and I don't understand :/

I also would think that higher the interest rates, there would be hot money flows in the form of FDI's,due to the higher returns.

I think if a country recives FDI,from a developing country it may open up to trade from the receiving country.

Reply 598

username350927

14

Original post by Elponchis_LOL

hmm your right, just being pedantic i spose
it says currency are fixed between members of EU in tutor2u toolkit so i think you can use the word 'fixed'

Not being pedantic the two things have differences

Reply 599

xChelsea

Original post by loki276

I do but the two are seperate things. One is the eurozone wheras fixed would be something like the erm. The two share some similar qualities but are massively different

Yeah in reality it's floating against other currencies but in reality it might aswell be fixed for all the members in the eurozone as they can't influence it in order to make theirselves more competitive etc. Only the ECB can do this..

Question spotting for F585 Economics The Global Economy OCR A level June 2011

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