OCR F581 Markets in Action - 11 May 2015 Watch

Super199
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#61
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#61
(Original post by Makashima)
Demand.

Disposal income
Price of complementary goods
Price of substitute goods
Change in taste
Weather
Advertising

Which book do you have nd what have they listed ?
Ah I've found them now
Do you mind listing what causes the ppf shift outwards/in wards
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Makashima
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#62
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#62
(Original post by Super199)
Ah I've found them now
Do you mind listing what causes the ppf shift outwards/in wards
Increase in the factor production. Then you expand into it e.g. increase in labour quantity or quality ie more productive. Or more advance and high tech capitals. Increase in potential to produce more
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username1822535
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#63
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Can anyone explain:

The advantages and disadvantages of a low exchange rate

The advantages and disadvantages of a high exchange rate
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Yousf
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#64
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I have a quick question, In the 8 markers on elasticy, for the evaluation, could i get marks by stating figures are estimates/inaccurate/can change over time because i noticed this trend in the mark scheme's or do i need to elaborate on the point for the mark?
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Makashima
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#65
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#65
(Original post by Yousf)
I have a quick question, In the 8 markers on elasticy, for the evaluation, could i get marks by stating figures are estimates/inaccurate/can change over time because i noticed this trend in the mark scheme's or do i need to elaborate on the point for the mark?
I ALWAYS use it and I try to add one more point since the paper is written by different people then the mark scheme is going to vary

For example, I think I remember seeing they count this as two marks:

These data are only an estimate hence it is not accurate/reliable (1)
Results will eventually change over time (1)

then on another paper, they count all that as 1 mark :L

so if you have time to write, i dont see the harm to elaborate right?
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Makashima
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#66
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#66
(Original post by gelato72)
Can anyone explain:

The advantages and disadvantages of a low exchange rate

The advantages and disadvantages of a high exchange rate

low exchange rate:
mean exports are cheaper, so boost the international competitiveness
exports more out
AD increase
gain in real GDP and employment
higher national average income, more income so people can consumer more goods and services, improve standard of living etc etc

disadvantage, ad increases so demand pull inflation
which may instead can lower standard of living, goods become toe expensive
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Yousf
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#67
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#67
(Original post by Makashima)
I ALWAYS use it and I try to add one more point since the paper is written by different people then the mark scheme is going to vary

For example, I think I remember seeing they count this as two marks:

These data are only an estimate hence it is not accurate/reliable (1)
Results will eventually change over time (1)

then on another paper, they count all that as 1 mark :L

so if you have time to write, i dont see the harm to elaborate right?
i see, thank you, appreciate it
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Pato1
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#68
Going on a Pajholden (youtube channel) marathon as part of my revision. The guy is really good and covers everything for micro
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Makashima
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#69
The reason I think it may not be tradeable permit is because it would have to do with pollution and the most known ones are carbon dioxide and global warming etc.

Last year. It stated China production produces a lot of neg externality ie CO2 etc. So pollution is already used.

But who knows

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lam12
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(Original post by Makashima)
I ALWAYS use it and I try to add one more point since the paper is written by different people then the mark scheme is going to vary

For example, I think I remember seeing they count this as two marks:

These data are only an estimate hence it is not accurate/reliable (1)
Results will eventually change over time (1)

then on another paper, they count all that as 1 mark :L

so if you have time to write, i dont see the harm to elaborate right?
Elaborate how? Can I literally say those sentences and get the mark?


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Makashima
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#71
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#71
(Original post by lam12)
Elaborate how? Can I literally say those sentences and get the mark?


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you can say theses are estimates thus not reliable/accurate
because it is always in the ms
but im just saying try to criticize more about the data than saying it is an estimate etc etc because everyone uses the point
you never know whats the ms like,
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JMKeynes
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#72
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(Original post by Yousf)
I mean't in the short term, as if inflation rises to control it interest rates would rise. Also an increase in inflation results in an increase of the exchange rate, in other word less competitive. So generally a rise in inflation will increase interest rates and exchange rates.
No, inflation will cause the exchange rate to fall instead of rise! Inflation -> higher prices of exports -> less exports -> more imports -> less demand for domestic currency yet more supply -> depreciation. However, it does depend on the price elasticity of demand of the exports, although generally this chain of analysis will work.

Also, you are right in saying that interest rates will rise when there is high inflation, but it is not as a result of the inflation (i.e. it is caused by government intervention, essentially, not due to market forces).

(Original post by lam12)
Elaborate how? Can I literally say those sentences and get the mark?


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I think you just need to make a point about how figures are often revised many times as time goes on, with each revision making it a more accurate estimate. Therefore, if the figures are only the first estimate, they are unlikely to be accurate.
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Yousf
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(Original post by JMKeynes)
No, inflation will cause the exchange rate to fall instead of rise! Inflation -> higher prices of exports -> less exports -> more imports -> less demand for domestic currency yet more supply -> depreciation. However, it does depend on the price elasticity of demand of the exports, although generally this chain of analysis will work.

Also, you are right in saying that interest rates will rise when there is high inflation, but it is not as a result of the inflation (i.e. it is caused by government intervention, essentially, not due to market forces).


I think you just need to make a point about how figures are often revised many times as time goes on, with each revision making it a more accurate estimate. Therefore, if the figures are only the first estimate, they are unlikely to be accurate.
Your right about the inflation and the interest rate link, but your talking about in the long term, (i was talking in general the affects of inflation on exchange rate) the result of inflation will lead to a fall in exchange rate. However, In the short term a rise in inflation will increase the exchange rate directly, however then after a certain period of time we would expect the exchange rate to fall as you mentioned.
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Yousf
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HELP!! LOOK AT QUESTION 2B. I was doing an economics past paper, i labelled the graph price and quantity however in the mark scheme it labelled the graph PRICE OF TICKETS and QUANTITY. It also said award no marks for graph if axes incorrectly labelled. However my question is, if i labelled the graph price and quantity instead of price of tickets, am i wrong? As i was taught to ALWAYS label my graph price(y axis) quantity( x axis)
http://www.ocr.org.uk/Images/59754-mark-scheme-june.pdf

Thanks
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Wall Street
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(Original post by Yousf)
Your right about the inflation and the interest rate link, but your talking about in the long term, (i was talking in general the affects of inflation on exchange rate) the result of inflation will lead to a fall in exchange rate. However, In the short term a rise in inflation will increase the exchange rate directly, however then after a certain period of time we would expect the exchange rate to fall as you mentioned.
Why would inflation cause the exchange rate to "increase... directly" like you said? Surely if the currency is worthless as a result of hyperinflation then the exchange rate will fall as a result of that too?

And yeah, JMKeynes is right about his/her chain of argument with regards to the effect on exports/imports of high inflation in the long run.
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Yousf
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(Original post by Wall Street)
Why would inflation cause the exchange rate to "increase... directly" like you said? Surely if the currency is worthless as a result of hyperinflation then the exchange rate will fall as a result of that too?

And yeah, JMKeynes is right about his/her chain of argument with regards to the effect on exports/imports of high inflation in the long run.
The currency will not be worthless if there was high inflation anyways..
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Yousf
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#77
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(Original post by Wall Street)
Why would inflation cause the exchange rate to "increase... directly" like you said? Surely if the currency is worthless as a result of hyperinflation then the exchange rate will fall as a result of that too?

And yeah, JMKeynes is right about his/her chain of argument with regards to the effect on exports/imports of high inflation in the long run.
Yes the result of hyperinflation will cause the exchange rate to fall as you mentioned, but that usually takes some time, thus making it long term.
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Wall Street
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#78
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(Original post by Yousf)
The currency will not be worthless if there was high inflation anyways..
Yes it will. Think about it...

I still don't see your point about how inflation will cause the exchange rate to rise in the short-term; remember that the exchange rate is the price of one currency in terms of another, so if one currency becomes worthless then it's exchange rate will fall as you will need more if it to swap for a certain amount of foreign currency.
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Yousf
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#79
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(Original post by Wall Street)
Yes it will. Think about it...

I still don't see your point about how inflation will cause the exchange rate to rise in the short-term; remember that the exchange rate is the price of one currency in terms of another, so if one currency becomes worthless then it's exchange rate will fall as you will need more if it to swap for a certain amount of foreign currency.
But when there is a high inflation, the MPC increases interest rates to reach the inflation target of 2 percent. When interest rate increases this causes the reward for saving in that particular country to increase, eg UK. Thus, foreign firms transfer their money to the UK, due to the higher reward, this causes an appreciation in the exchange rate, as the demand for the currency increases causing the exchange rate to rise.

Then later on, as you said we would expect the exchange rate decreases making it long term.. Also if there was an appreication in the exchange rate, it would be able to buy more goods and services abroad cheaply due to the stronger currency even though that's not entirely favorable.
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Makashima
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#80
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(Original post by Yousf)
HELP!! LOOK AT QUESTION 2B. I was doing an economics past paper, i labelled the graph price and quantity however in the mark scheme it labelled the graph PRICE OF TICKETS and QUANTITY. It also said award no marks for graph if axes incorrectly labelled. However my question is, if i labelled the graph price and quantity instead of price of tickets, am i wrong? As i was taught to ALWAYS label my graph price(y axis) quantity( x axis)
http://www.ocr.org.uk/Images/59754-mark-scheme-june.pdf

Thanks
That mark scheme is weird, not that price of ticket is wrong but in general naming it price and quantity is fine also. Dont worry too much considering that is 6 years ago. Price and quantity is fine!
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