F581/ F582 Economics June 2013

Hahah, take it you wrote something similar then

yeah and everyone kept telling me i'd messed up !! you have no idea just how pissed off ive been with myself ALL day hahahaha and you have no idea how reassuring it is to see this

I've sat this exam before and got a B and I thought I F*cked it up, and all the people who came out saying how great they did actually failed with E's and U's

So you never know!

In summary for the 18 mark I put:

- Defined Inflation
- Defined Exchange Rates

- Mentioned that a high exchange rate would cause cheaper imports and higher exports
- This would reduce AD left (since X and M are components)
- Showed diagram
- Didn't mention that firms cost of production decreased (might have loosed a couple of marks on that)

However, it might not work if:
- There is a small increase in the EXR
- Duration?
- Hard for the government to manage since many developed countries let their currency 'float'
- Other components of AD might mean that AD increase
- X and M make up a very small amount compared to other components such as C and I which mean that it might not be effective
- Proposed an alternative (I think it was fiscal)
- Then summarised by saying that it was difficult for the government to manage the situation, again, completely forgot about firms

Anyone got anything simular? Please relate!

I defined inflation rate instead of inflation. I did the same analysis as you.

For my evaluative I said -depends on other AD components, depends on size of appreciation, depends whether exports are price elastic/inelastic (Iknow this is micro but you have been allowed to use it on previous mark schemes) and put it depends on what other currencies are doing (which is totally wrong) so hopefully the first 3 evaluative points will get me through.

In summary for the 18 mark I put:

- Defined Inflation
- Defined Exchange Rates

- Mentioned that a high exchange rate would cause cheaper imports and higher exports
- This would reduce AD left (since X and M are components)
- Showed diagram
- Didn't mention that firms cost of production decreased (might have loosed a couple of marks on that)

However, it might not work if:
- There is a small increase in the EXR
- Duration?
- Hard for the government to manage since many developed countries let their currency 'float'
- Other components of AD might mean that AD increase
- X and M make up a very small amount compared to other components such as C and I which mean that it might not be effective
- Proposed an alternative (I think it was fiscal)
- Then summarised by saying that it was difficult for the government to manage the situation, again, completely forgot about firms

Anyone got anything simular? Please relate!

I did write about Defined Inflation
- Defined Exchange Rates

- Mentioned that a high exchange rate would cause cheaper imports and higher exports

- This would reduce AD left (since X and M are components)

- Showed diagram

- Didn't mention that firms cost of production decreased (might have loosed a couple of marks on that) then i went on about cost of firms buying good is cheaper and because the price value depreciates ect ,

went on about higher exchange rates increase value of a currency then made ad/as curve with four ad curves 1 above PO one @ bottle neck and two below, analysis about demand pull inflation with out stating it sadly -.-

but show and evaluation wrote about multiplier effect the initial position of the curve by how much u reduce inflation has an positive effect and negative effect. yh sio i think i got 13 marks there -.-

For Jan 2013 i guess you could also say that it depends on AD. if AD is under full capacity, then a decrease in AS wont harm the economy as much.

For some questions like "Discuss the extent to which a reduction in the rate of interest can be effective in increasing consumer expenditure and investment" In a practise essay i started writing about monetary policy because the rate of interest is a part of it, but my teacher crossed out what i'd written as he said that monetary policy wasnt referred in the question.

Looking at the past questions, i think fiscal/monetary are likely to come up, as well as unemployment. Not too sure about economic growth or inflation as they've came up quite a lot in the past few years

Yeah that's pretty good man! My teacher is one of the leading examiners for OCR Economics and he said as long as you follow that structure you should be alright. I wrote like 6 pages for that question lol

Personallyy...
I defined the exchange rate and drew a diagram to show how it was determined, defined inflation and then inflation rate.
Then I wrote about how if you have a strong currency imports are cheaper exports are dearer and therefore there will be less demand for exports and less demand in the domestic economy as imports are cheaper
Then I explain that (X-M) was a component of AD so AD should shift left, and I showed it on a diagram operating at full capacity to show that it could bring down the price level. Then I showed it at spare capacity too and showed that it didn't reduce price level but instead just reduced output.
Then I wrote that the assumption lacks reference to human nature and motivation and people may still choose to buy exports because they can't get certain products domestically then I went on about bananas.... and how you may not want to import because of poorer quality
And then I did some really super quick little star thing explaining it depended what the exchange rate was in the rest of the world and something else scrawled but no idea about that!

Anybody else find the second question about if injections were greater really confusing? :')

To get an A overall at AS do you need 80% average of both papers (e.g. 90% in one 70% in other) or do you need at least 80% in each paper??

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what figure did you get for the contribution of investment?
i got something like 25%... really awkward question!