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    (Original post by Mokert23)
    Gaomeister -

    I like the point about the multiplier and unemployment in the short term creating economic growth. However im not sure if unemployment would rise in the short term, i think it would fall, surely if the firms have excess capacity they will be able to grow and employ more.
    Fair enough, duely noted
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    (Original post by Mokert23)
    Thats what Im struggling with. I know the points. When the question comes up - i just seem to go blank and not know what to write. Are you both doing the exam tomorow?
    yeah Unit 4 & 5 tomorrow I need to go and learn the points now =\
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    (Original post by rahulsood)
    yeah Unit 4 & 5 tomorrow I need to go and learn the points now =\
    Which exam board are you with? AQA only have 4 tomorrow
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    Yeah ive just got Unit 5 tommorow. If I get an A takes so much pressure off Unit 6, which I cannot do to save my life.
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    (Original post by Mokert23)
    Yeah ive just got Unit 5 tommorow. If I get an A takes so much pressure off Unit 6, which I cannot do to save my life.
    I love Unit 6, and the Unit 4 mock was amazing (100% UMS ), although I cant remember a lottt of it now (gna revise it tonite), and basically learning unit 5 from scratch now
    I need to get atleast a B in this unit =\
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    (Original post by gaomeister)
    Which exam board are you with? AQA only have 4 tomorrow
    Edexcel. Lol you're lucky!
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    Immigration - How does this affect labour market?
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    (Original post by Mathematician(ess))
    Immigration - How does this affect labour market?
    Increases the supply of labour (!) ; may create unemployement for the current population, as they may offer services at a cheaper rate...

    May bring in more skilled labour, hence making labour supply more inelastic in general. Eval- most immigrants are not particularly skilled though, and many claim benefits, hence reducing the level of benefits available to the currently unemployed, therefore forcing them to seek work; but work may be less readinly available since the labour demand has contracted

    is that correct? Any more..?
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    You guys are really going at it

    Good stuff :yy:
    If I had time, I would go through all the stuff you wrote and hopefully add more to it, but unfortunately I have to prepare for an exam tomorrow. Gool luck with Econ!
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    b) Pure monopsony exsists where there is a single buyer of workers in the market, though the theory applies to any powerful buyer of labour in the market. There is evidence that monopsony power exsists as the government is the main buyer of public sector labour, as seen by the fact there have been labour shortages during the 35 hour working week. The disadvantage of having a monopsonist is that it is easy for the firm to expolit the individuals as there is non additional buyer and wages can be kept down.

    In the private sector the fact that so many firms are in the markets (Renault and DaimlerChrysler, Michelin to name a few) shows that there are many in the market and that competition will negate the effect of any one single monopsonist. So this highlights the divide in the private and public sector of the French and Germany economies.

    There is strong evidence of monopoly power, being a single seller of labour in the market. French trade unions have kept the 35 hour working week despite low productivity and the fact that 54% believe it is a mistake. French and German trade union representation is much higher than the rest of Europe and these provide powerful in trade and wage negotiations.

    I struggled with that.
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    (Original post by rahulsood)
    Increases the supply of labour (!) ; may create unemployement for the current population, as they may offer services at a cheaper rate...

    May bring in more skilled labour, hence making labour supply more inelastic in general. Eval- most immigrants are not particularly skilled though, and many claim benefits, hence reducing the level of benefits available to the currently unemployed, therefore forcing them to seek work; but work may be less readinly available since the labour demand has contracted

    is that correct? Any more..?
    I don't believe they are able to claim benefits - obviously unless you can find work then you are unlikely to immigrate. However, when the work the money they earn do not go to the economy, going through the multiplier. Instead they are often sent to the country where they emmigrate from.

    Also, there is an argument that alot of skilled labour comes over from abroad in addition to unskilled, e.g. doctors from Poland. Also - they work harder (general view) and therefore they are offering a better service to UK consumers, thereby increasing their living standards.

    Of course there is always the point that they are taking away jobs from UK citizens - Eval- are the UK citizens going to take the jobs they go for anyway, i.e. jobs people are either unqualified for or would not do because they feel it is below them.

    (I swear economics can be very depressing at times )
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    Immigrantion is the movement across boreders into another country. These will not always be members of the working population, but it is likely there will be one potental income earner in each family that migrates, this is seemingly the incentive for moving. There may be language or cultural barrers so they may become dependants rather than earner. The labour market may gain one earner but may also gain a large dependant family

    Young bright tworkers are likely to immigrate, these workers are likely to be productive in the economy they join, offering high value added.The gain of these workers would have a positive multiplier effect and aggregate demand would rise - with economic growth leading to increased employment as well as labour market flexibility.
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    This is helping me revise so much. Anymore questions to be posted. I might have some more if people want to try?
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    (Original post by Mokert23)
    This is helping me revise so much. Anymore questions to be posted. I might have some more if people want to try?
    yes please I want to try them!
    It's much better than wafting through loads of pointless theory, since most of it is common sense once you've answered a similar question once!
    (brb in a minute though!)
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    Okay, I'm tired so want to kid myself into thinking I'm revising, therefore I'm posting the exam I just did in proper exam conditions, any tips would be most welcome (I'm fairly certain my evaluation is lacking/non-existent). This is the June 2007 paper, question 2.

    a) With reference to Extract 1, discuss the significance of the reasons why poverty has increased in the UK in recent years. [15]

    By poverty we are addressing relative poverty - when incomes are significantly below the median income. It has, as the text states, risen dramatically since 1979. Three main reasons why this has occurred are the growth in the wages of top earners, the 'workless households' and the reduction in wages of the low skilled.

    Wages of high earners has increased significantly in the past 30 years, for several reasons. Firstly, the top tax band was reduced from 60% to 40% in 1988. This has meant that relative poverty, post tax/benefits, has increased as high earners are better off post tax.
    A second factor causing top earners incomes to rise is the economic boom the economy has experienced over the past 13 years. This causes high incomes to grow more rapidly than low incomes [why is this?], thus increasing the gap between high and low earners.
    Because of these two factors incomes of the top earners has increased more rapidly, thus raising median incomes and thus causing the relative poverty line to increase, therefore pushing more people into relative poverty.

    Another factor causing poverty to increase is the growth of 'workless households'. As the text states, households with no one working are very high compared to other OECD countries. This could be because of the unemployment or poverty trap. These traps occur when there is little incentive to work as working would result in a loss of benefits. For example, if you are unemployed, you may decide not to work because it would result in you losing Job Seekers Allowance and you would be taxed, therefore the marginal rate of tax (extra income minus both benefits lost and tax taken) can be so high the incentive to work is minimal. If this is the cause of 'workless households' they will be on very low incomes, but government benefits ensure they are not in absolute poverty. Therefore the unemployment trap (workless households) can result in relative poverty.

    The final factor causing an increase in poverty is that low skilled wages have been reduced. This is the case, according to the text, due to a fall in demand for low skilled employment and an increase in its supply (line 21-24). This has caused low skill wages to fall, as shown. [Graph showing increase in supply and fall in demand, with supply being elastic] This shows how these effects have reduced wages. Because of this, low earners incomes have fallen, thus increasing relative poverty.
    Having said this, government intervention, in the form of the National Minimum Wage, prevents employees being paid too little, thus reducing the possible damage of this fall in wages.

    Furthermore, government initiatives, such as Working Family Tax Credits, are aimed at reducing the unemployment trap by encouraging people to work.

    These two forms of government intervention mean that the main cause of the increase in relative poverty is the increasing incomes of high earners.


    I may post b), c) and d) if people are kind enough to give pointers

    By the way, help will be rewarded by past papers, and possibly mark schemes, woo!
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    Discuss four factors of income equality in the UK (20)
    Evaluate three government policies currently used to influece the household distributioon of wealth and income. (15)
    Assess two factors which might account for a growth in temporary employment
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    I personally think it is a very good answer. How long did you spend on it may i ask?

    I would give it 13/15. Your usuage of the effective marginal rate of tax was very good, but for further evaluation you could state that re-distribution of income is not helped by the non claiming of taxes through either the social stigma attached to it, or the fact that the forms are usually very complicated and that people find it hard to judge whether they are eligible. This is just extra and im being picky of course.

    You only need three points for the 15 marks, so possibly the two bits at the ends are maybe not needed and more could have been written for the evaluation of the National minimum wage.

    During times of boom, high income earners earn more because they are in higher demand and usually wage differentials dicatate that they have a higher income. During a boom the opportunity cost of working rises and therefore there is an extension is supply. This means that low skilled jobs where there is high supply wages are effetively bid downwards, meaning that those with higher incomes gain more. Also the cutting of the tax rate from 60 - to 40 mean that effectively those higher incomes in the band gained an extra 20% disposable income (this is similar to the argument that when the 10p tax band was scrapped, over night those who were in it suddenly lost an extra 12p for ever pound, those in the high tax band gained 20p) giving them a higher income increasing inequality.
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    (Original post by Dan-IW)
    Okay, I'm tired so want to kid myself into thinking I'm revising, therefore I'm posting the exam I just did in proper exam conditions, any tips would be most welcome (I'm fairly certain my evaluation is lacking/non-existent). This is the June 2007 paper, question 2.

    a) With reference to Extract 1, discuss the significance of the reasons why poverty has increased in the UK in recent years. [15]

    A second factor causing top earners incomes to rise is the economic boom the economy has experienced over the past 13 years. This causes high incomes to grow more rapidly than low incomes [why is this?], thus increasing the gap between high and low earners.
    Top earners have both Wealth and Income, whilst low earners have very little wealth. Over time, Wealth also contributes to income, for example property and rents. The top earners also build up wealth at a faster rate than lower income earners. Low income earners on the other hand do not have enough discreationary income after purchasing their necessities to buy wealth such as housing or precious materials. As such, they do not build up wealth.

    Top earners are generally much more qualified than low earners, and in an economic boom when there is alot of trading going on, top earners have better oppourtunities to exploit this, compare a Tesco worker (sorry!) to someone working in the LSE. The stock trader is obviously going to be able to exploit the growth much more effectively than the Tesco worker. Therefore those with higher incomes generally reach even higher incomes in economic growth, thus causing even more inequality.
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    Ah, thank you people. I always took it as Gospel, but never knew why.

    I spent a bit too long on that question, about 25mins (I aim to spend 13mins on 10 markers, 20mins on 15. and 27mins on 20, very precise I know! ).

    Thanks very much Mokert, you can have past papers/mark schemes if you want, although rahulsood managed to get them without helping! The cheeky *******!

    Next part, woo!

    b) Using demand and supply analysis, asses two factors which have ‘substantially weaken the low skill labour market’ [10]

    The low skilled labour market has been ‘weakened’ in that wages and employment levels are lower. The two causes for this is a reduction in demand for low skilled labour and an increase in supply of low skilled labour.

    Demand for low skilled labour has reduced because of the deindustrialisation and restructuring of the economy that took place over the past 30 years. It resulted in many heavy industries, such as steel making, moving abroad due to cheaper labour. This left many low skilled workers occupationally immobile – they do not have the skills required in the service based economy. Because of this, there is less demand for low skilled employees.

    Furthermore, supply of low skilled employees has increased. This is because workers no longer have the right skills for a service based economy, shown by the fact that 20% of the working population are ‘close to illiterate’. This would have been less important while manufacturing jobs were prevalent, but the service based economy demands higher skills. Thusly, the supply of, what is now, low skilled workers has risen. These two effects are shown below: Graph showing this, with supply being elastic
    The supply increased, from S1 to S2. While the demand decreased, from D1 to D2. Resulting in lower wages, W1 to W2, and lower employment, Q1 to Q2. Therefore these two affects have ‘weakened’ the low skilled labour market.

    Furthermore, its affects have been amplified by the elastic supply of low skilled labour. This has caused wages and employment levels to reduce by a proportionately greater amount.
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    Ok ... here we go (could you pm me the markscheme please :P, i need evaluation points)

    First paragraph, while service based economy is fine I prefer the term knowledge (or weightless economy) because the UK's primary exports are financial such as banking etc. I actually think the point is good, but maybe it could be better the other way around. The low skilled labour market has been damaged by cheaper labour abroad, through the forces of globalisation and the UKs transition to a knowledge economy, this has resulted in structural unemployment and damge to the low skills market. Just personal preference.

    The rest is fine however I would use low investement in human capital as an evaluation point. The government has made education to intensive and the costs associated with further university education make it unaffordable to many low income earners despite the provisions of grants and such. Even sixth form the opportunity cost of gaining and education is often not as high as the need for employment in the short term. By not gaining qualifications this is increasing the supply of low skilled workers, puting downward pressure on wages in a time when the labour force is actually contracting.

    I would mark it 9/10 you have two points, clearly and concisely presented with evaluation throughout. Think that the first paragraph could have been slightly better (in my book theres no full marks)

    EDIT: Just making a quick lunch, if you post your C and D ill look at them when im back
 
 
 
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