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    (Original post by getenoughsuarez)
    What influence do high contributor countries have in the decision making process for the IMF and the World bank due to them being funded by them?

    Can we assume that they will act bias towards their own countries and this will be against other, lower contributors and not be in these countries best interests? Surely then the IMF and World bank is flawed then?
    High contributor countries definitely have a monopoly on the decision making processes at the IMF. Read "Globalisation and its discontents" by Stiglitz, it is essentially an outline of the failure of IMF policies as a result of undue influence from powerful nations. The IMF have repeatedly refused to lend money to African nations unless they accepted economic reforms in the interest of the US/UK despite such policies having induced recessions in the past, e.g financial market liberalisation.
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    (Original post by Eboracum)
    I have a really interesting question, but I'm not sure anyone knows.

    Some people suggest that we should completely change our monetary system. They say that governments should not borrow money at interest from private banks, instead, they should print their own currency, and as much as they need. They say the world is built on pointless debt. Now on the face of it, this seems like a very good decision.

    What do you think, and why do you think they don't?

    Thank you.
    The problem with printing your own money which is controlled by the government and not independent is that there is a chance of hyperinflation. If the government could print how much they wanted, they may promise to spend a lot more money than usual around elections to get more votes. The problem with printing an increasing amount of money is that the relative value of money is falling. Therefore, to keep people with the same living standards they need to print more money and the problem then just spirals. This has happened in the past like in Germany around 1930's, Zimbabwe and Argentina I think. The idea is good in principle but the possible problems are too great and devastating.
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    Does anyone know what a windfall gain is, with regard to quotas? The definitions I've found of it isjust 'income that is unexpected', but I don't understand how this could be true for a government policy
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    (Original post by blueconstellation)
    Does anyone know what a windfall gain is, with regard to quotas? The definitions I've found of it isjust 'income that is unexpected', but I don't understand how this could be true for a government policy
    Its possible to get a windfall gain with quotas but doesn't always happen. To see why, let's consider an example. Let's say that the world price of sugar was 50p per kilo but in the UK it was £3 per kilo. This has occured as the UK restricted how much sugar was allowed into the UK by the form of a quota so only a small proportion of what was demanded was allowed in and the UK have no available substitutes. Then the U.K. suppliers who have the right to sell Sugar in the U.K. find it valuable, as they can buy the sugar for the world price of 50p/kilo and sell it for £3/kilo and so it would seem that the import quotas are creating a windfall gain for the lucky suppliers who have the right.

    However, what will likely happen, if this was the case is that the competition would be so high to have the right to sell sugar that more competitors would want to sell sugar in the U.K. This probably would lead to either the profits shared between them or the case where they will all rally to get the support from the government to increase the amount of sugar imported to the U.K. This would lead to the U.K price of sugar falling as more sugar is flooding the market and the gains would fall.
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    Its possible to get a windfall gain with quotas but doesn't always happen. To see why, let's consider an example. Let's say that the world price of sugar was 50p per kilo but in the UK it was £3 per kilo. This has occured as the UK restricted how much sugar was allowed into the UK by the form of a quota so only a small proportion of what was demanded was allowed in and the UK have no available substitutes. Then the U.K. suppliers who have the right to sell Sugar in the U.K. find it valuable, as they can buy the sugar for the world price of 50p/kilo and sell it for £3/kilo and so it would seem that the import quotas are creating a windfall gain for the lucky suppliers who have the right.

    However, what will likely happen, if this was the case is that the competition would be so high to have the right to sell sugar that more competitors would want to sell sugar in the U.K. This probably would lead to either the profits shared between them or the case where they will all rally to get the support from the government to increase the amount of sugar imported to the U.K. This would lead to the U.K price of sugar falling as more sugar is flooding the market and the gains would fall.
    Oh, I see! Thank you, that was very helpful.
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    Hi I need help on these Multiple Choice Questions, thanks

    6) A good has a unitary price elasticity of demand and at a price of $20 a firm sells 40 000 units.
    How many will the firm sell if it charges a price of $5?
    A 10 000 B 100 000 C 160 000 D 200 000

    24) In which year did the real value of money rise?

    year Price Index
    (base year 2001)
    A 2002 100
    B 2003 104
    C 2004 104
    D 2005 103

    17) What will make it more likely that road tolls will reduce traffic congestion?

    A Cross-elasticity of demand between private and public transport is zero.
    B Demand for car use is income-elastic.
    C Demand for car use is price-elastic.
    D Supply of public transport is price-inelastic.

    24 The table shows the percentage price changes in some items in the UK Consumer Price Index
    (CPI) in the year to 1 June 2006.

    item % change in price
    rents, electricity and gas 9.0
    education 4.7
    transport 4.0
    restaurants and hotels 3.2
    health services 2.9

    The increase in the overall CPI over the same period was 2.5 %.
    What can be concluded from the data above?
    A The CPI is not an accurate measure of inflation.
    B Some prices must have fallen.
    C The average price increase of other items was less than 2.5 %.
    D The real value of money rose by more than 2.5 %.

    6) The table shows the price elasticity of demand for four goods and services.

    price elasticity
    motor cycles 1.6
    telephone calls 1.0
    football tickets 0.3
    light bulbs 0.0

    If the price of each item increased by 1 %, for which of these items would the total expenditure
    increase?

    A football tickets only
    B motor cycles only
    C football tickets and light bulbs
    D motor cycles and telephone calls

    25) The table shows the price indices and weights for three commodity groups that are included in
    the calculation of a country's cost of living index.

    commodity
    group
    index weight
    X 300 4
    Y 140 3
    Z 80 3

    By how much has the cost of living increased since the base year?
    A 52% B 86% C 186% D 198%

    7) A good has unitary price elasticity of demand and at a price of $25 it sells 100 000 units.
    Which price must the firm charge if it wants to sell 125 000 units of the good?
    A $22 B $20 C $18 D $15

    8) The table shows how an individual’s consumption of cola and nuts varies with income.

    income ($) cola (cans) nuts (packets)
    50 2 0
    100 4 1

    Which statement about income elasticity of demand over the range of income shown is true?
    A For cola it is less than 1.
    B For cola it is greater than 1.
    C For nuts it is greater than 1.
    D For nuts it is zero.

    24) A country’s Consumer Price Index increased from 100 to 200 over a five-year period.
    What can be deduced from this?

    A The economy experienced creeping inflation.
    B The standard of living halved.
    C The cost of living fell by 50 %.
    D The purchasing power of money halved.
    As you can see i have trouble with elasticity and CPI/RPI

    Any answers/tips/notes would be helpful.

    Thanks
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    If private universities were prohibited, the opportunity cost to students of obtaining a degree would be the same for everybody. True or false?
    • PS Helper
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    PS Helper
    (Original post by kiaoraenglsh)
    Hi I need help on these Multiple Choice Questions, thanks

    6) A good has a unitary price elasticity of demand and at a price of $20 a firm sells 40 000 units.
    How many will the firm sell if it charges a price of $5?
    A 10 000 B 100 000 C 160 000 D 200 000

    If PED is unit elastic then % change in demand= % change in price. You can work out the % change in price and so can work out final demand
    24) In which year did the real value of money rise?

    year Price Index
    (base year 2001)
    A 2002 100
    B 2003 104
    C 2004 104
    D 2005 103
    Think about it- if inflation is when the real value of money decreases, then the reverse is also true
    17) What will make it more likely that road tolls will reduce traffic congestion?

    A Cross-elasticity of demand between private and public transport is zero.
    B Demand for car use is income-elastic.
    C Demand for car use is price-elastic.
    D Supply of public transport is price-inelastic.

    Think about what raising road tolls does to the cost of using a car, then think about consumers would (hopefully) respond
    24 The table shows the percentage price changes in some items in the UK Consumer Price Index
    (CPI) in the year to 1 June 2006.

    item % change in price
    rents, electricity and gas 9.0
    education 4.7
    transport 4.0
    restaurants and hotels 3.2
    health services 2.9

    The increase in the overall CPI over the same period was 2.5 %.
    What can be concluded from the data above?
    A The CPI is not an accurate measure of inflation.
    B Some prices must have fallen.
    C The average price increase of other items was less than 2.5 %.
    D The real value of money rose by more than 2.5 %.

    6) The table shows the price elasticity of demand for four goods and services.

    price elasticity
    motor cycles 1.6
    telephone calls 1.0
    football tickets 0.3
    light bulbs 0.0

    If the price of each item increased by 1 %, for which of these items would the total expenditure
    increase?

    A football tickets only
    B motor cycles only
    C football tickets and light bulbs
    D motor cycles and telephone calls
    Think about which of those options are price elastic and which are price inelastic
    25) The table shows the price indices and weights for three commodity groups that are included in
    the calculation of a country's cost of living index.

    commodity
    group
    index weight
    X 300 4
    Y 140 3
    Z 80 3

    By how much has the cost of living increased since the base year?
    A 52% B 86% C 186% D 198%

    7) A good has unitary price elasticity of demand and at a price of $25 it sells 100 000 units.
    Which price must the firm charge if it wants to sell 125 000 units of the good?
    A $22 B $20 C $18 D $15
    This is just using the PED equations again
    8) The table shows how an individual’s consumption of cola and nuts varies with income.

    income ($) cola (cans) nuts (packets)
    50 2 0
    100 4 1

    Which statement about income elasticity of demand over the range of income shown is true?
    A For cola it is less than 1.
    B For cola it is greater than 1.
    C For nuts it is greater than 1.
    D For nuts it is zero.
    Calculate YED using the values in the table

    24) A country’s Consumer Price Index increased from 100 to 200 over a five-year period.
    What can be deduced from this?

    A The economy experienced creeping inflation.
    B The standard of living halved.
    C The cost of living fell by 50 %.
    D The purchasing power of money halved.
    As you can see i have trouble with elasticity and CPI/RPI
    If prices are double what they were 5 years ago, then that means you can buy half as many goods with the same amount of income
    Any answers/tips/notes would be helpful.

    Thanks
    Hope that helps
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    I'd like to know which of the core topics are most likely to feature in paper 2 AS Level
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    (Original post by Missy101)
    I'd like to know which of the core topics are most likely to feature in paper 2 AS Level
    Which board, AQA? Edexcel? OCR?
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    Doing it with the CIE
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    (Original post by Missy101)
    Doing it with the CIE
    All of them!!
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    Can you use Churchill's decision to bring back gold standard as an example of the concept of thinking at the margin? I know historians/economists think that it was a bad decision but can you say that the economic effects of churchill's decision are examples of the consequences of not making the right choice?

    Thanks!
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    Why is there a gap in the MR curve for a kinked demand curve? I have a vague idea but I haven't been given a definitive explanation.

    Thank you.
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    These are two A-level questions that I'm unsure of:

    (a) (i) Does Spain’s current account balance as shown in Figure 1 represent a net injection or withdrawal? Explain your answer. (4 marks)

    (ii) Outline two possible reasons for Spain’s current account balance, with reference to the data in Figure 1. (6 marks)

    You can find figure 1 on page 2 of this website. http://www.scribd.com/mobile/doc/77104159

    Obviously, I'm not asking you for a full answer (but feel free to write one if you want), but I just need some pointers to write about that will get me both 4 and 6 marks. Anything you can say about either question would be much appreciated.

    Thank you
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    (Original post by LittleCasino)
    These are two A-level questions that I'm unsure of:

    (a) (i) Does Spain’s current account balance as shown in Figure 1 represent a net injection or withdrawal? Explain your answer. (4 marks)

    (ii) Outline two possible reasons for Spain’s current account balance, with reference to the data in Figure 1. (6 marks)

    You can find figure 1 on page 2 of this website. http://www.scribd.com/mobile/doc/77104159

    Obviously, I'm not asking you for a full answer (but feel free to write one if you want), but I just need some pointers to write about that will get me both 4 and 6 marks. Anything you can say about either question would be much appreciated.

    Thank you
    For the 4 marker, refer to the data and explain why it is a deficit/surplus with a definition

    for the 6 marker, try to think of what factors affect levels of exports/imports (for example, increased aggregate demand as a result of lower interest rates/greater spending will tend to increase imports since consumers have greater income/more employment and hence they demand more goods, therefore having a detrimental effect on current account balance)
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    (Original post by Extricated)
    For the 4 marker, refer to the data and explain why it is a deficit/surplus with a definition

    for the 6 marker, try to think of what factors affect levels of exports/imports (for example, increased aggregate demand as a result of lower interest rates/greater spending will tend to increase imports since consumers have greater income/more employment and hence they demand more goods, therefore having a detrimental effect on current account balance)
    :clap2:
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    (Original post by Extricated)
    Why is there a gap in the MR curve for a kinked demand curve? I have a vague idea but I haven't been given a definitive explanation.

    Thank you.
    There's a discontinuity between the two sections. The MR curve is twice the gradient of the AR curve (you can derive this with basic calculus).

    E.g. AR curve has gradient -4, MR has gradient -8

    When we get to the second part of the kinked curve, the gradient of the AR curve changes, it becomes steeper (more inelastic). Let's say it changes to -6, so the MR's gradient goes up to -12.

    It's hard to explain without visual aid but if you just drew the curves yourself it'd become fairly apparent: try drawing from output 0 to 4, an AR curve with gradient -4, MR with -8; and then from outputs 4 to 8 draw an AR with gradient -6 and MR -12. This gap should make sense because the old MR curve with gradient -8 would not intersect with the new MR curve (after the kink) with a gradient of -12, hence why they don't meet and you have the gap between them.

    Wow, sorry that was a terrible explanation. Hopefully some it made sense, though!
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    Has anyone been on any of the Blackstone tutors Intensive eco courses - they have a unit 1 course coming up just before xmas.....quite tempted to go. Any experiences would be much appreciated
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    The demand function has the formula: QD=900-5P and the supply function has the formula QS=-600+10P. Find the equilibrium price and quantity
 
 
 
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