WJEC EC3 and EC4 A2 Economics June 2014 exam

Did anyone do the AD inflation/unemployment essay?

I did the first case study and the question 4, the AD inflation/unemployment essay. How did you find that question? I thought it was quite odd asking whether it was more likely to cause a greater increase in inflation compared to the reduction in unemployment... Quite an odd take on this part of the syllabus.

Yeah I found it quite odd too...i started with the short run phillips curve and said how expansionary policies will increase inflation more than a reduction in unemployment. I evaluated it with supply side policies/increasing AD during mass unemployment won't lead to inflation etc. I don't know whether that's right though..what did you put?

I did standard AS/AD analysis explaining how there could be an increase in inflation and a reduction in unemployment. Then I drew the Phillips Curve, explained all that. I gave some reasons why there may be a greater increase in inflation than decrease unemployment after a sudden rise in AD, but I'm not sure if these were correct. I was thinking on my feet for those.

Evaluated with the expectations augmented Phillips Curve, saying that in the long run there may be no reduction in unemployment as the economy would return to the long run equilibrium unemployment level (natural rate of unemployment). Also, if there is a large amount of spare capacity in the economy, there may be a large reduction in unemployment after an increase in AD, but no increase in inflation.

I forgot to mention supply side policies in my evaluation, damn :\ I just hope I can pick some marks up somewhere in this.

I find EC4 such a hard paper compared to the other economics papers. From looking at mark schemes of the past papers, you can tell that the examiners sometimes want really out of the box thinking that really goes beyond the syllabus, and sometimes I find it hard to determine what the question is really asking. Fingers crossed though.

Out of curiosity, what does it take to get an A* with this exam board? An A overall and 90% average on EC3/4?

I did those questions too, what were your main points for the development essay? The last 12 mark in the HS2 question was a bitch!

I'm pretty sure that to get an A*, you need to get about 48-50/60 (although this does sometimes vary). Did anyone do the economic growth essay?

I did what did you write about in your evaluation? worried i didn't put enough in, wjec seem so picky with marks

<I did, my conclusion focused on it depending on peoples responsiveness to the tax fall and the impact on Government finances also depended on this. Not really sure though :/

What were your main points for and against? >

just explained how falls in different types of taxation would result in increased consumption (AD) growth and employment levels which would boost confidence hence draw in fdi which could shift LRAS right, also would attract private investment if co-operation tax is low - shift LRAS, income tax low - more efficient workforce, increased productivity shift LRAS - think there was more but can't remember

Against: said how this was unsustainable in long run, showed how if investment doesn't occur i.e. AD shifts right but AS doesn't = large rise in inflation (positive output gap) - increase price of imports (bad for current account) also more people in world force, demand higher wages so unemployment could go back to NRU with expected inflation, increased government borrowing to fuel spending, lead to unsustainable PSNB umm talked about the crowding out effect of private investment, loss of government revenue to spend on capital and merit good which could increase potential growth, said there would be no revenue to fund externalities and said how that would lead to increased future social costs so no sustainable growth, could eventually lead to interest rates increasing which would slow consumption in long run, - think that was it :/

For the tax question, did anyone else put an emphasis on the fact that it said 'tax reductions are the BEST way to increase lr growth'. So I put in a paragraph on potentially better alternatives like gov. spending on supply side factors.

For the tax question, did anyone else put an emphasis on the fact that it said 'tax reductions are the BEST way to increase lr growth'. So I put in a paragraph on potentially better alternatives like gov. spending on supply side factors.