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

1. (Original post by therealOG)
High inflation will reduce the international competitiveness of domestic firms due to higher prices, therefore demand for their exports (and hence currency) will fall, leading to a depreciation of the exchange rate.

I really want an A* for this and this exam looks like a killah tbh...plus revising is sooo boring lol
I knew that it was something blindingly obvious...

I haven't done any work all year and it's only now that I'm desperately cramming that I start to find it interesting.
2. Can anyone help me with this question please Its one of the tutor2u toolkit:

Analyse the multiplier effects that may occur when there is a fall in one or more of the components of AD (6)

Thankyouu!! I know its probably really easy but the multiplier confuses me haha!
3. (Original post by ASDFGHJKLQWERTYUIO)
Can anyone help me with this question please Its one of the tutor2u toolkit:

Analyse the multiplier effects that may occur when there is a fall in one or more of the components of AD (6)

Thankyouu!! I know its probably really easy but the multiplier confuses me haha!

When there is a fall in one of the componnents of AD, there will be a negative multiplier effect. Say a fall in consumption happens, this means there will be less demand for goods in the economy, this will lead to a fall in investment, as firms will not buy or replace old machinery as there is no point. A fall in exports will be as a result as well, however the BofP may improve but that depends on the exchnage rate due to a fall in consumption.

It also depends on how big the fall is on or more of the components of AD. the multipler effect is the change in one or more of the components of the AD which result in a change in national income. show and AD and AS curve and analyses a fall in one or more of the components of AD. AD should shift to the left
4. does anyone know, how much background knowledge do you have to have on the Euro and the UK? or do you gain application marks by referring back to the case study??
5. you need to have a well rounded knowledge on the euro and uk as you would definitely need to refer to this as this is why we have been given the extracts before the exam so the examiner expects you to have done your research. Application marks is indeed awarded for referring to the case study.
6. (Original post by est~*~)
you need to have a well rounded knowledge on the euro and uk as you would definitely need to refer to this as this is why we have been given the extracts before the exam so the examiner expects you to have done your research. Application marks is indeed awarded for referring to the case study.
Thanks!
What would you recommend as key essential facts that you need to know? because I'm short on time would past and present facts on the UK macro objectives be enough? And facts on causes of the PIIGS problems?
What would you need to know on extract 4? What research would you do on that?
7. (Original post by Skillerspeed)
Thanks!
What would you recommend as key essential facts that you need to know? because I'm short on time would past and present facts on the UK macro objectives be enough? And facts on causes of the PIIGS problems?
What would you need to know on extract 4? What research would you do on that?
He's vastly exaggerating the background info you need. All the stimulus does is provide the context for the questions, you will not be penalised for not knowing the particulars of the construction boom and bust in Spain. A general knowledge and understanding of the issues should be fine, and where relevant refer to the stimulus material if you have to.
8. (Original post by therealOG)
He's vastly exaggerating the background info you need. All the stimulus does is provide the context for the questions, you will not be penalised for not knowing the particulars of the construction boom and bust in Spain. A general knowledge and understanding of the issues should be fine, and where relevant refer to the stimulus material if you have to.
Yeah ok, thats a relief thanks lol.
9. anyone got any tips on revising for this exam. Got an A last year, but feel im struggling in answering some of the questions. Seems really complex or is it just me?
10. Got a question here that i'm finding rather tricky to understand

Comment on the extent to which the "positive impact of national stimulus packages is at large temporary"

My understanding of it is basically that fiscal policies to increase AD in the short-term are largely temporary due to short-term growth at the expense of inflation...

Thus in the long-term a rise in inflation reflects a loss of competitiveness etc etc

Any idea?
11. (Original post by Hits1)
Got a question here that i'm finding rather tricky to understand

Comment on the extent to which the "positive impact of national stimulus packages is at large temporary"

My understanding of it is basically that fiscal policies to increase AD in the short-term are largely temporary due to short-term growth at the expense of inflation...

Thus in the long-term a rise in inflation reflects a loss of competitiveness etc etc

Any idea?
Yeah that sounds good so far. I guess you could mention that without supply-side policies the growth is unsustainable and inflationary, etc. I would also say that national stimulus packages have an opportunity cost, and if a country gets too heavily in debt then their credit rating falls and they won't be able to borrow so cheaply: so in that way using national stimulus packages could be unsustainable.

I think for evaluation I'd mention the multiplier effect. If the initial injection is say £1bn, then with a multiplier of 2 the eventual increase in AD will be £2bn. This takes time to work its way through the economy, so a stimulus package isn't JUST a temporary fix. I think it also depends on what the money is spent on.
12. yeh cheers buddy, that makes sense! It seems like this particular question may come up so glad thats cleared up!

Cheers!
13. (Original post by Wasnerello)
Yeah that sounds good so far. I guess you could mention that without supply-side policies the growth is unsustainable and inflationary, etc. I would also say that national stimulus packages have an opportunity cost, and if a country gets too heavily in debt then their credit rating falls and they won't be able to borrow so cheaply: so in that way using national stimulus packages could be unsustainable.

I think for evaluation I'd mention the multiplier effect. If the initial injection is say £1bn, then with a multiplier of 2 the eventual increase in AD will be £2bn. This takes time to work its way through the economy, so a stimulus package isn't JUST a temporary fix. I think it also depends on what the money is spent on.
Also would it depend on your viewpoint?...Cause say from a keynesian point of view, during a recession, national stimulus packages to increase AD wouldn't come wih the inflationary pressures...

By the way, when you say antional simtulus pacakages, is that fiscal stimulus?thnks
14. Does anyone roughly know what how many points, how much depth, and in general how much we should write for each bit..
4 marker, 8 marker, 6 marker, 10 marker, and last question which is...20?...no 30? :/
15. (Original post by mqt)
Does anyone roughly know what how many points, how much depth, and in general how much we should write for each bit..
4 marker, 8 marker, 6 marker, 10 marker, and last question which is...20?...no 30? :/
The layout of marks are:

4 - Definition/Distinguish/Explain the role of...
6 - Analyse
10 - Comment/Evaluate
4 - Definition/Distinguish/Explain the role of...
6 - Analyse
10 - Comment/Evaluate
20 - Discuss.
16. Woow.. this was me two years ago... trying to question spot... etc lol..I am not sure how much this will help you guys.. but I will post it anyway... it is a Thread I commented on a year ago of how to get 90% or more in your OCR Economics EXAMS... http://www.thestudentroom.co.uk/show...707&highlight=........ please ignore my spelling... I was a rather excited teenager and wrote really bad English... just read the content that is all that matters.. Lool.
and Good Luck. x
17. A post I made LAST YEAR in reply to a user.. asking " HOW DO YOU GET OVER 90% IN AN OCR ECONOMICS EXAM"...

I managed to get 90 percent and over in 3 out of 4 economics exams…. Got 65 in transport paper…I don't know what happened there but... ah well...
And I think the technique is fairly simple. If you are a person who is good as writing essays… and has a logical mind….you should do fine…..

· USE as many economic jargons as possible such as " Ceteris parabus"
· USE however at least 5 times in ur essay... as soon as the examiner sees such derivative words they see that you are evaluating and giving a balanced argument, and you will get awarded for it…..you score high in AO3 and AO4 I think....
· You obviously have to know your stuff… especially for “The Global economy” paper.. Try to read newspapers such as The financial times.. Guardian etc….BBC news online is really good.. if you read stephaneconomics blog…..n keep up top date…. I had a read through the new stimulus AND its about the end of the recession, Copenhagen etcc and stuff.. So if you go to previous articles on bbc news it may help….http://www.bbc.co.uk/blogs/thereport...hanieflanders/

Lets say we are talking about Globalisation... bring in loads of points from outside the box..
· Lets take macro objective Unemployment…
Countries benefit from globalisation differently, and can affect macro objectives such as Unemployment. If governments are not corrupt and the fruits of globalisation are equally distributed then unemployment may fall, because the country is benefiting because entrepreneurs will see this as an opportunity to set up business and earn factor payments ceteris parabus in the form of profit etc also if unemployment improves, this will reduce the role of the automatic stabilisers, therefore as a result transfer payments to those who are unemployed will reduce “cetris parabus” so government are likely to have more revenue to spend on other public services such as education and healthcare - merit goods which exhibit positive externalities. Similar, if people start to get jobs, they will have more disposable income therefore are likely to spend more on consumer goods. Although this does depend on a number of factors such as…. Confidence and atmosphere, since confidence can shake an economy and hinder consumers from spending since the opportunity cost of saving is greater. Firms get more profit.. Pay more co-operation tax.. More revenue for government so spending is likely to increase, however this does not necessarily mean government spending will increase especially if government debt is very high- as it is now…so instead budget deficit need to be cut…. this does all depend on whether government sets the right pre conditions to benefit from globalisation... if governments are corrupt or dualist.. Then unemployment is unlikely to change..... etcc etccc
( dnt no if that made scence bu yh..)
.. I havent even said anything bout inflation or BOP so trust me if you talk loads about one point e.g unemployment you can link it to soo many things( the things I have in bold)... by doing this u are showing the examiner that can evaluate.. etc....

I am not to sure if this really helps… but if YOU need anymre help just mgs me
[/LIST]
18. (Original post by michelle_mishmash)
A post I made LAST YEAR in reply to a user.. asking &quot; HOW DO YOU GET OVER 90% IN AN OCR ECONOMICS EXAM&quot;...

I managed to get 90 percent and over in 3 out of 4 economics exams…. Got 65 in transport paper…I don't know what happened there but... ah well...
And I think the technique is fairly simple. If you are a person who is good as writing essays… and has a logical mind….you should do fine…..

· USE as many economic jargons as possible such as &quot; Ceteris parabus&quot;
· USE however at least 5 times in ur essay... as soon as the examiner sees such derivative words they see that you are evaluating and giving a balanced argument, and you will get awarded for it…..you score high in AO3 and AO4 I think....
· You obviously have to know your stuff… especially for “The Global economy” paper.. Try to read newspapers such as The financial times.. Guardian etc….BBC news online is really good.. if you read stephaneconomics blog…..n keep up top date…. I had a read through the new stimulus AND its about the end of the recession, Copenhagen etcc and stuff.. So if you go to previous articles on bbc news it may help….http://www.bbc.co.uk/blogs/thereport...hanieflanders/

Lets say we are talking about Globalisation... bring in loads of points from outside the box..
· Lets take macro objective Unemployment…
Countries benefit from globalisation differently, and can affect macro objectives such as Unemployment. If governments are not corrupt and the fruits of globalisation are equally distributed then unemployment may fall, because the country is benefiting because entrepreneurs will see this as an opportunity to set up business and earn factor payments ceteris parabus in the form of profit etc also if unemployment improves, this will reduce the role of the automatic stabilisers, therefore as a result transfer payments to those who are unemployed will reduce “cetris parabus” so government are likely to have more revenue to spend on other public services such as education and healthcare - merit goods which exhibit positive externalities. Similar, if people start to get jobs, they will have more disposable income therefore are likely to spend more on consumer goods. Although this does depend on a number of factors such as…. Confidence and atmosphere, since confidence can shake an economy and hinder consumers from spending since the opportunity cost of saving is greater. Firms get more profit.. Pay more co-operation tax.. More revenue for government so spending is likely to increase, however this does not necessarily mean government spending will increase especially if government debt is very high- as it is now…so instead budget deficit need to be cut…. this does all depend on whether government sets the right pre conditions to benefit from globalisation... if governments are corrupt or dualist.. Then unemployment is unlikely to change..... etcc etccc
( dnt no if that made scence bu yh..)
.. I havent even said anything bout inflation or BOP so trust me if you talk loads about one point e.g unemployment you can link it to soo many things( the things I have in bold)... by doing this u are showing the examiner that can evaluate.. etc....

I am not to sure if this really helps… but if YOU need anymre help just mgs me
[/LIST]
thank you so much! i will really enjoy your help! ! i need an A SOOO BAD! how much quantity would you say ou need to make...also, how many points and how much detail would you say theyre looking for thnks!
19. Hey guys, I thought that it would be a good idea to start discussing and helping eachother how to plan these 20 markers... I've got some of the suggested (SUGGESTED!, don't quote me that these will be the questions) exam style questions for it...
I thought i'd just list them all, and i'll give it a go at planning ... then if you guys don't mind, i'm going to start typing some of my answers up...not now, cause got to concentrate on c4, but you guys cn give me a heads up please?

1. Discuss *the *extent *to *which *international *agreements *to *reduce *trade *barriers *are *a *useful * way *of *stimulating *economic *growth *in *the *short *to *medium-*?term *and *in *the *long-*?run *(20) *

2. Attempts *to *cut *budget *deficits *and *government *debt *in *the *early *stages *of *a *recovery *may * damage *a *country's long-*?run *economic *performance. *Discuss *(20) *
3. "Spain must introduce policies to improve international competitiveness" -- *Assess *the * * policies *that *are *likely *to *be *effective *in *achieving *this *aim *for *the *Spanish *economy *(20) *

4. Discuss *the *extent *to *which *the *Euro *Area *is *an *optimal *currency *area *and *whether *this * matters *for *the *long-*?term *viability *of *the *currency *union? *(20)
*
5. To *what *extent *is *the *European *Central *Bank *right *to *continue *to *set *interest *rates *to * maintain *low *inflation *for *the *Euro *Area *as *a *whole? *(20)
*
6. How *far *do *you *agree *with *the *view *that *countries *that *are *not *economically *convergent * should *not *be *allowed *inside *the *single *currency *area? *

7. Despite *the *difficulties *experienced *by *the *PIIGS *nations *in *recent *years, *the *European *single * currency *area *has *been *a *success. *Discuss *(20) *

8. If *the *UK *had *joined *the *euro, *do *you *think *the *country *would *have *fared *better *during *the * recession? *(20) *

9. If *Spain *had *its *own *currency, *it *could *let *the *value *of *its *currency *fall *to *a *level *that *would * make *the *country's *tradable *goods sector competitive. Evaluate the view that Spain's economic *performance *would *improve *by *a *currency *devaluation *and *leaving *the *Euro *Area * (20) *

10. "Tariffs, domestic subsidies and *other *forms *of *protectionism *risk *a *country *sacrificing * medium-*?term *growth *opportunities *for *near-term economic interests" Do *you *agree? *(20)

I'm going to take a crack at planning number 3, please give me a heads up if you got anything to add ...:
Plan:
Some basic knowledge and an introduction on Spains situation. Definitions oncompetitiveness, relative labour unit costs, output prics... (they are uncompetitive)...
Policies which could be used.... list a few

Define supply side policy,
then, which ones could be used....

Trade liberalisation... (btw, are things like reducing barriers to entry and domestic subsidies examples of trade liberalisation? or is trade liberalisation deregulating the market?)..... Why it's effective...what this depends on...

Reducing barriers to entry, i.e removing tariffs, reducing quotas...how is this beneficial... why it may not be the best option for spain...as it does not necessarily improve trade within the euro area (is this valid at all btw)

Privatisation and deregulation,...effective...brin g prices down...more competitive in general... what does this depend on

Short term effect, long term effect...these are effective because?... refer to the question....
erm...yeah..don't really know how to end it :/ thank lolx
20. Hi there,

Due to lack of past papers and little practise on shorter questions - have no idea how much to write for the 4 and 6 markers?

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