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    Agreed that the essay question is probably going to be something like:

    "Discuss the extent to which international trade agreements to reduce barriers are useful for stimulating growth in developing countries"

    Here's a short list for both sides of the argument I made, with evaluative points for the conclusion:

    For

    Access to markets increased, demand for exports increases, AD up and so higher employment.
    This leads to higher living standards, multiplier effect and less strain on gov resources to deal with poverty
    More competition leads to firms more efficient so better quality and price of good so higher demand
    Competition also forces firms to invest in long-term capital so increases long run productive capacity of economy (AS shifts out)
    R+D and innovation, technological transfer
    A more open economy attracts FDI, technology transfer leads to skilled workforce and higher human capital
    Gov gets revenue for infrastructure, education,health

    Bad

    Increase in competition, domestic industries can't compete with economies of scale from developed, leads to unemployment, poverty as no social security in these countries
    higher dependancy on primary commodities which are volatile and so more risk
    Agriculture is highly subsidised by developed world (why its all gone tits up in doha)
    environmental problems e.g. brazil
    inequality, social resentment etc.
    opening of their economies leads to dumping of subsidised products from west

    Conclusion

    Overall its good, opening of economy leads to larger market share for firms, so economies of scale gained and also fdi pours in as seen as untapped resource
    In the short run unemployment may result from uncompetitive firms but in the long run only competitive efficient firms remain
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    if the Q came up off 'what is a fiscal stimulus package' as a 4marker,
    what would u write???
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    (Original post by HK11)
    Agreed that the essay question is probably going to be something like:

    "Discuss the extent to which international trade agreements to reduce barriers are useful for stimulating growth in developing countries"

    Here's a short list for both sides of the argument I made, with evaluative points for the conclusion:

    For

    Access to markets increased, demand for exports increases, AD up and so higher employment.
    This leads to higher living standards, multiplier effect and less strain on gov resources to deal with poverty
    More competition leads to firms more efficient so better quality and price of good so higher demand
    Competition also forces firms to invest in long-term capital so increases long run productive capacity of economy (AS shifts out)
    R+D and innovation, technological transfer
    A more open economy attracts FDI, technology transfer leads to skilled workforce and higher human capital
    Gov gets revenue for infrastructure, education,health

    Bad

    Increase in competition, domestic industries can't compete with economies of scale from developed, leads to unemployment, poverty as no social security in these countries
    higher dependancy on primary commodities which are volatile and so more risk
    Agriculture is highly subsidised by developed world (why its all gone tits up in doha)
    environmental problems e.g. brazil
    inequality, social resentment etc.
    opening of their economies leads to dumping of subsidised products from west

    Conclusion

    Overall its good, opening of economy leads to larger market share for firms, so economies of scale gained and also fdi pours in as seen as untapped resource
    In the short run unemployment may result from uncompetitive firms but in the long run only competitive efficient firms remain

    diagram - trade creation

    trade diverson

    unequal wealth distribution

    domistic unemployment if one country is experincing high exports some country has to buying these exports and this in that country unemployment will be high?
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    A fiscal stimulus package is when the government either raises government spending or reduces taxes with the aim of increasing aggregate demand in the economy. This is because government spending is an injection and taxation is a withdrawal, from the circular flow.
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    (Original post by Iram0105)
    if the Q came up off 'what is a fiscal stimulus package' as a 4marker,
    what would u write???
    its the use of either goverment spending or taxes to influence AD and stimulated the economy. this package can be in the form of cutting taxes or increasing goverment spending?
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    (Original post by boliver228)
    A fiscal stimulus package is when the government either raises government spending or reduces taxes with the aim of increasing aggregate demand in the economy. This is because government spending is an injection and taxation is a withdrawal, from the circular flow.
    fankuuuuuuuuu
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    gonna go and get a macdonalds before the exam... yeeeeee
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    (Original post by boliver228)
    gonna go and get a macdonalds before the exam... yeeeeee
    llool thats the one
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    big mac always eases the nerves
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    for a 10 marker
    why were the PIIGS so uncompetitive.....
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    PIIGS were so uncompetitive because:

    They had above average growth before the recession, which was demand led. This was because interest rates were set too low for their economies. This led to inflation, which pushed up raw material costs, as well as forcing up wages. This meant that unit labour and output costs rose, reducing their costs competitivness.

    Usually, high inflation would lead to a fall in the value of their currency. However because they are part of the Euro, this mechanism doesnt function. The exhchange rate therfore remains artificially high for the PIIGS, which reduces their competitiveness outside of the Euro area. Also, any fall in the Euro will benefit countries such as Germany just as much as the PIIGS, so the PIIGS wont really benefit.
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    (Original post by Iram0105)
    for a 10 marker
    why were the PIIGS so uncompetitive.....
    Boliver is 100% right with the inflation point.

    I would also mention high wage costs in PIIGS economies. Greece in particular has strong trade unions that resist any wage freezes/cuts.
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    i realllyyyy hope fixed/floating exchange rates dnt come uppp
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    (Original post by HK11)
    Agreed that the essay question is probably going to be something like:

    "Discuss the extent to which international trade agreements to reduce barriers are useful for stimulating growth in developing countries"

    Here's a short list for both sides of the argument I made, with evaluative points for the conclusion:

    For

    Access to markets increased, demand for exports increases, AD up and so higher employment.
    This leads to higher living standards, multiplier effect and less strain on gov resources to deal with poverty
    More competition leads to firms more efficient so better quality and price of good so higher demand
    Competition also forces firms to invest in long-term capital so increases long run productive capacity of economy (AS shifts out)
    R+D and innovation, technological transfer
    A more open economy attracts FDI, technology transfer leads to skilled workforce and higher human capital
    Gov gets revenue for infrastructure, education,health

    Bad

    Increase in competition, domestic industries can't compete with economies of scale from developed, leads to unemployment, poverty as no social security in these countries
    higher dependancy on primary commodities which are volatile and so more risk
    Agriculture is highly subsidised by developed world (why its all gone tits up in doha)
    environmental problems e.g. brazil
    inequality, social resentment etc.
    opening of their economies leads to dumping of subsidised products from west

    Conclusion

    Overall its good, opening of economy leads to larger market share for firms, so economies of scale gained and also fdi pours in as seen as untapped resource
    In the short run unemployment may result from uncompetitive firms but in the long run only competitive efficient firms remain
    My teacher came up with a little thing to help with this question.

    Think of the word MEETS.

    For the pros if intl trade in developing economies you have:

    M-medical advancements
    E-employment up
    E-efficiency gains
    T-technology transfers
    S-speedd of growth is quicker

    For the cons you have:
    M-migration increases
    E-externalities of trade
    E-exogenous shocks
    T-take adavatage (MNCs exploit)
    S-substitute high wages for low ones (MNCs explout)

    Obviously these are not all of the point you could make but there are quite a few in there
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    (Original post by nik2111)
    also a fiscal stimulus question might come up i.e does it help euro areas come out of a reccision or something

    something on unemployment will come up cos 1 whole extract is about wether competiviness or the goverments spending on good benefits which one is the bigger factor for unemployment spain felt.

    extract 1 talks about soft curreny so i rekon something on devaluation
    Constraint on fiscal stimulus might come up or running budget deficits.

    On currency it is quite likely a question on fixed vs floating ER will come up.
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    not a bad last question at alllll

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    worst last question they could ever ask!!!
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    LOL, the implication of Spain's competitiveness really threw me, talk about brain-freeze. Couldn't understand what it was asking me. And the Ireland question made me think about. Bleh, not bad overall.

    But the last question..well, need I say more...
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    for the last question i talked about prebish singer hypothesis, but economic growth is not a sufficient ingredient for economic development. Talked about MNC creating employment, pollution and a depletion of natural resources, however provide training and education through tax revenue. FDI is short term. Talked about cash cropping and export-led growth

    the exam was okay, last question threw me off slighlty
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    Totally messed up the last question... wrote about economies of scale, prebisch singey hypothesis, done the usual definitions of human development and reduction of trade barriers. Also comparative advantage, more specialization, so more employment. But all assumes that labour is compeletely mobile in those countries, where as it could actually lead to more unemployment and more poverty.

    Total lack of evaluation and linking trade to human development though, didn't even get time to write a proper conclusion. Grrr, there goes my A.
 
 
 
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