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F581/ F582 Economics June 2013 Watch

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    very difficult , but one or two were alright
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    fairly standard
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    quite easy , with one or two hard ones
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    so easy i felt like dancing throughout the exam
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    (Original post by wolalala)
    does anyone have any problems of measuring Unemployment?
    Also for the question ' Discuss whether Unemployment is always harmful for the economy' for why it is harmful I know you stay stuff like -

    decrease in output - negative output gap, less productive capacity, hinders growth
    ( and then show of PPF or AS& AD graph), less tax revenue for government - budget deficit
    hysteresis -income inequality
    reduce international competitiveness - less goods made - less consumer choice
    Doesn’t meet macro objectives of full employment

    its not harmful depends on:
    - type of unemployment,
    current economic cycle, depends if long term or short term
    Depends if other policies are happening at the same time e.g. supply side may prevent unemployment
    what else can you say for both sides of the argument? Thank you in advance & what's a good conclusion please?
    A benefit could be that it lowers demand pull and cost push inflation. Firms have a greater supply of labour to choose from so the wage rate will fall, so their costs fall. Also it makes it easier for firms who want to expand to recruit workers
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    (Original post by fletchdd02)
    Interest rates as these are the basis of all speculation and the movement of 'hot money'
    ohh okay, so would you say that the higher the interest rate, the more speculation of 'hot money' will occur right? Thank you for replying
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    (Original post by wolalala)
    does anyone have any problems of measuring Unemployment?
    two methods used to measure unemployment - labour force survey and claimant count

    LFS :

    - very accurate
    - compiles range of economic data
    - survey of over 60,000 households
    - can be used for international comparisons
    - EXPENSIVE
    - TAKES TIME TO MAKE
    - is able to catch people who are unemployed but not entitled to benefits

    Claimant Count :

    - quick and easy to compile
    - cheap to compile
    - CANNOT BE USED FOR INTERNATIONAL COMPARISONS
    - CAN BE INACCURATE
    - SOMETIMES USED BY FRAUDSTERS HENCE NOT REPRESENTATIVE

    ive capitalised the problems with the two methods of measuring unemployment
    -
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    (Original post by wolalala)
    ohh okay, so would you say that the higher the interest rate, the more speculation of 'hot money' will occur right? Thank you for replying
    Yes as a higher interest rate will gain bigger returns on the money in our financial accounts
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    (Original post by heirloom)
    A benefit could be that it lowers demand pull and cost push inflation. Firms have a greater supply of labour to choose from so the wage rate will fall, so their costs fall. Also it makes it easier for firms who want to expand to recruit workers
    Thank you for replying - oh I see, so by it lowering demand-pull and cost push inflation, in theory is that meeting the Government objective of lower inflation? :confused:.
    and of course all types of unemployment is bad, but if its frictional, could you say that its not too bad, as theres a possibility of switching between jobs that's more productive, therefore leading to economic growth?

    and can you also say that although human capital may be low- causing unemployment, firms may be using machineries instead to be more efficient? - sorry if that's all confusing
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    (Original post by fletchdd02)
    Yes as a higher interest rate will gain bigger returns on the money in our financial accounts
    oh I see, okay Thank you
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    (Original post by Fas)
    two methods used to measure unemployment - labour force survey and claimant count

    LFS :

    - very accurate
    - compiles range of economic data
    - survey of over 60,000 households
    - can be used for international comparisons
    - EXPENSIVE
    - TAKES TIME TO MAKE
    - is able to catch people who are unemployed but not entitled to benefits

    Claimant Count :

    - quick and easy to compile
    - cheap to compile
    - CANNOT BE USED FOR INTERNATIONAL COMPARISONS
    - CAN BE INACCURATE
    - SOMETIMES USED BY FRAUDSTERS HENCE NOT REPRESENTATIVE

    ive capitalised the problems with the two methods of measuring unemployment
    -
    Also the criteria to claim JSA within a country changes over time so this makes it difficult to compare historic data with today's values
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    (Original post by Fas)
    two methods used to measure unemployment - labour force survey and claimant count

    LFS :

    - very accurate
    - compiles range of economic data
    - survey of over 60,000 households
    - can be used for international comparisons
    - EXPENSIVE
    - TAKES TIME TO MAKE
    - is able to catch people who are unemployed but not entitled to benefits

    Claimant Count :

    - quick and easy to compile
    - cheap to compile
    - CANNOT BE USED FOR INTERNATIONAL COMPARISONS
    - CAN BE INACCURATE
    - SOMETIMES USED BY FRAUDSTERS HENCE NOT REPRESENTATIVE

    ive capitalised the problems with the two methods of measuring unemployment
    -
    Thank you sooo much! could you also mention that with the claimant account, there may be an informal economy, so undeclared economic activity, or tax evasion, ?
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    (Original post by wolalala)
    Thank you for replying - oh I see, so by it lowering demand-pull and cost push inflation, in theory is that meeting the Government objective of lower inflation? :confused:.
    and of course all types of unemployment is bad, but if its frictional, could you say that its not too bad, as theres a possibility of switching between jobs that's more productive, therefore leading to economic growth?

    and can you also say that although human capital may be low- causing unemployment, firms may be using machineries instead to be more efficient? - sorry if that's all confusing
    Yes it is meeting that objective. If you have the grant/bamford textbook there is a small section on possible conflicts of objectives on page 158.
    Yes frictional is fine as even if there is a lot of economic activity people will always be in between jobs and its often only briefly. And I suppose you could say that, they find a job which best suits their skill set and that they enjoy so they will be more productive
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    imagine if the 18 marker was on ' discuss whether a current account SURPLUS can be harmful to the economy? ahaha OCR would be mean! I guess you can say stuff like it can be harmful because a country with a current account surplus are reliant on the revenue of the exports, or they send all the goods abroad, so there may be fewer for them in the future- so economic instability. anything else ?
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    (Original post by heirloom)
    Yes it is meeting that objective. If you have the grant/bamford textbook there is a small section on possible conflicts of objectives on page 158.
    Yes frictional is fine as even if there is a lot of economic activity people will always be in between jobs and its often only briefly. And I suppose you could say that, they find a job which best suits their skill set and that they enjoy so they will be more productive
    ahh okay, Thank you! unfortunately I don't have that book could you mention the trade off between inflation and unemployment - so the Phillips curve? however I will search everywhere for more info on the conflicts of objectives
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    (Original post by wolalala)
    imagine if the 18 marker was on ' discuss whether a current account SURPLUS can be harmful to the economy? ahaha OCR would be mean! I guess you can say stuff like it can be harmful because a country with a current account surplus are reliant on the revenue of the exports, or they send all the goods abroad, so there may be fewer for them in the future- so economic instability. anything else ?
    That would be awful!
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    (Original post by heirloom)
    Also the criteria to claim JSA within a country changes over time so this makes it difficult to compare historic data with today's values
    ohh okay, could you say that not all country's have the JSA, so cannot compare with e.g USA?
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    (Original post by fletchdd02)
    That would be awful!
    I know! they already did an awful question in Jan with AS decreasing etc.., hopefully they wouldn't do a hard question again, however its good to be prepared for the unexpected!
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    (Original post by wolalala)
    imagine if the 18 marker was on ' discuss whether a current account SURPLUS can be harmful to the economy? ahaha OCR would be mean! I guess you can say stuff like it can be harmful because a country with a current account surplus are reliant on the revenue of the exports, or they send all the goods abroad, so there may be fewer for them in the future- so economic instability. anything else ?
    oh dear lord............ and here i was thinking i had the BoP nailed ! :L
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    (Original post by wolalala)
    ohh okay, could you say that not all country's have the JSA, so cannot compare with e.g USA?
    don't say that ! mention instead that the criteria for claiming unemployment-related benefits is different from country to country so you cannot compare internationally
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    (Original post by wolalala)
    ahh okay, Thank you! unfortunately I don't have that book could you mention the trade off between inflation and unemployment - so the Phillips curve? however I will search everywhere for more info on the conflicts of objectives
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    (Original post by wolalala)
    I know! they already did an awful question in Jan with AS decreasing etc.., hopefully they wouldn't do a hard question again, however its good to be prepared for the unexpected!
    yeah that was a hard paper!
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    Can anyone please explain how a positive output gap is possible? Think I have a grasp on it would like to hear some explanation though.
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    (Original post by Fas)
    don't say that ! mention instead that the criteria for claiming unemployment-related benefits is different from country to country so you cannot compare internationally
    ah my bad, okay thank you, you just saved me from making a mistake if that question was in the exam :L
 
 
 
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