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F581/ F582 Economics June 2013

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Reply 560
Original post by tomble123

Well supply side policies can be very useful, however it depends on the initial type of inflation the economy is experiencing. Cost-push can be reduced through supply side policies and Demand-pull can be reduced by a deflationary fiscal and/or monetary policy.


I'd say fiscal policy is best at reducing cost-push inflation
Original post by NedStark
It was a comment on unemployment being the most important macroeconomic objective. Didn't have a clue on the structure for that, I assumed the costs of unemployment were the analysis but the evaluation section was just me throwing in anything about conflicts between policies.
Do you remember what you put?


Lol at what I put, I'm pretty sure its wrong.

Low unemployment is good as there are more workers so more demand in economy - AD increases - Economic growth increases - However means workers can demand higher wages and there isn't a shortage of workers - Inflation as people are demanding more.
Found the paper mixed to be honest. 18 marker was alright although I couldn't really think of many analysis points. I put that imports become cheaper and exports become more expensive potentially leading to a worse trade balance, therefore reducing AD etc etc but apart from that I couldn't think of anything else.

I wrote about 5 fairly strong evaluative points though.

Also thought the comment question on unemployment was hard. I put 3 reasons why low unemployment was good, and 3 reasons why economic growth may be better, like if an economy has high poverty then economic growth can reduce poverty and raise living standards without having to redistribute income. Also put that if achieving low unemployment leads to unsustainable economic growth then it may not be good as it can lead to pollution/depletion of natural resources.

Also for the GDP question I got $4800 for China and $45,000 for Japan. Everyone I know who also took the paper found it fairly easy so grade boundaries will probably be high :frown:
Also, for the supply side policy question that was 4 marks (?), did the supply side policy have to be in the case study? I did reduction in direct taxes but I can't remember whether this was in the case study.
Original post by lufc_dan
Everyone I know who also took the paper found it fairly easy so grade boundaries will probably be high :frown:


I guess everyone would be hoping that they are. My first impression when I finished it was, where the hell was the AD/AS question? Where you get about 4 mark just for the diagram.

Original post by lufc_dan
Also, for the supply side policy question that was 4 marks (?), did the supply side policy have to be in the case study? I did reduction in direct taxes but I can't remember whether this was in the case study.


I think it did have to be from the case study, the ones I remember were privitisation and training. I don't think direct taxes were in it.
(edited 10 years ago)
Original post by >Username<
Lol at what I put, I'm pretty sure its wrong.

Low unemployment is good as there are more workers so more demand in economy - AD increases - Economic growth increases - However means workers can demand higher wages and there isn't a shortage of workers - Inflation as people are demanding more.


Low unemployment also known as full employment (in real terms 3% to allow for frictional unemployment, that is those between jobs).
Good - AD pushed to the right which leads to more growth. Reduced government spending on current transfers in JSA and increased revenue from direct taxes indefinitely and most probably indirects in VAT. This allows for more capital spending on infrastructure and increase the productive capacity of the country.

Bad - can lead to serious CPI if working near productive capacity as trade unions can push for higher wages etc. Harder for firms to react to changes in AD as they have staff on their books. Makes the economy less responsive to global changes as there is little spare capacity.
Reply 566
Original post by lufc_dan
Also, for the supply side policy question that was 4 marks (?), did the supply side policy have to be in the case study? I did reduction in direct taxes but I can't remember whether this was in the case study.


It had to be in the case study as it said briefly china has .... some method, pick ... method and explain whatever it asked

I did increased training
Reply 567
For analysis of china's price level question, did price rise more slowly? Sneaky question..
Original post by lufc_dan
Also, for the supply side policy question that was 4 marks (?), did the supply side policy have to be in the case study? I did reduction in direct taxes but I can't remember whether this was in the case study.


Yeah it said from the source, I don't think it was, their was training (which I used) and another but I don't think it was tax :frown: I'd like to be wrong!
Reply 569
When asked to calculate the average income of China and Japan and compare who had a higher average income, did we have to convert it into millions or would you have gotten full marks by leaving it as 4.2 and 45??
Original post by lufc_dan
Also, for the supply side policy question that was 4 marks (?), did the supply side policy have to be in the case study? I did reduction in direct taxes but I can't remember whether this was in the case study.


Yeah it did, the supply side policy mentioned was spending on training.
For question six I listed the on bad thing about unemployment, loss of tax revenue. Then I wrote that there was always going to be some unemployment and I wrote that unemployment has its benefits such as making the labour market more flexible and making it easier for firms to expand


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Original post by bg***j2
For analysis of china's price level question, did price rise more slowly? Sneaky question..


The price level fell by 2.2% first years, 6% second set - rose 6% third set and rose 1% final set. Overall a decline in the price level of 1.2%. It shows that the price level is erratic and unstable although by returning to a relatively similar level we could assume that this was an anomaly.

I hope that is what they were looking for
Original post by lufc_dan
Also, for the supply side policy question that was 4 marks (?), did the supply side policy have to be in the case study? I did reduction in direct taxes but I can't remember whether this was in the case study.


You'll be fine Danny!
Reply 573
Original post by christanmu
The price level fell by 2.2% first years, 6% second set - rose 6% third set and rose 1% final set. Overall a decline in the price level of 1.2%. It shows that the price level is erratic and unstable although by returning to a relatively similar level we could assume that this was an anomaly.

I hope that is what they were looking for


fml. well thats definitely not what i put.
Original post by M.I.A
When asked to calculate the average income of China and Japan and compare who had a higher average income, did we have to convert it into millions or would you have gotten full marks by leaving it as 4.2 and 45??


You probably need US$4200 and US$45000 for full marks, only drop 1 at the most though!
Original post by christanmu
The price level fell by 2.2% first years, 6% second set - rose 6% third set and rose 1% final set. Overall a decline in the price level of 1.2%. It shows that the price level is erratic and unstable although by returning to a relatively similar level we could assume that this was an anomaly.

I hope that is what they were looking for


I don't think the price level fall because the economy was still experiencing 4.0% inflation the year after the 6.0% inflation rate, so the price level would continue to rise?

I put that at the start of the data the Chinese economy was experiencing 6% inflation, and by 2009 the economy was experiencing deflation. I put a bit more but I was just blagging.
(edited 10 years ago)
Reply 576
Original post by christanmu
The price level fell by 2.2% first years, 6% second set - rose 6% third set and rose 1% final set. Overall a decline in the price level of 1.2%. It shows that the price level is erratic and unstable although by returning to a relatively similar level we could assume that this was an anomaly.

I hope that is what they were looking for


Think you got caught out the price level didn't fall in the first few years, it increased at a slower rate. The inflation rate was what fell. The price level fell in mid 08-09 due to deflation
Original post by lufc_dan
The price level didn't fall though did it? Because the economy was still experiencing 4.0% inflation the year after the 6.0% inflation rate, so the price level would continue to rise?


Yeah you're right Dan. The price level did continue to rise, it was just the rate at which it was increasing slowed.
Original post by lufc_dan
The price level didn't fall though did it? Because the economy was still experiencing 4.0% inflation the year after the 6.0% inflation rate, so the price level would continue to rise?



ergh I know that, I am such a moron. No the price level didn't fall, just the rate at which it increased decreased.

kudos
Yeah just taking that one on the chin guys! I didn't think - hopefully I can get the marks for my other comments though.

Although knowing those mark schemes it will say no marks for saying a fall in the price level..

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