OCR ECONOMICS F582 The National and International Economy [UNIT 2 - 19TH MAY 2015]Watch
oh hi yis, it is me again, makashima from da unit 1...goodluck
F582 The National and the International Economy
Tuesday 19th May 2015
Discuss anything related to "F852 The national and the international economy".
remember to get an early night sleep
Heres an explanation:
Exchange rate: An appreciation of a domestic country currency, will mean their currency is now stronger. However it increases the price of the exports thus reduces the international competitiveness, in terms of price. Thus the demand for our exports fall. Whereas imports now becomes relatively cheaper, thus we demand more of imports. Deficit is where imports exceed exports
2) Quality, no matter how cheap your products; if you quality is appalling simply demand falls and remains low.
3) Protectionisms, tariff/quota etc. A country may limit your exports amount regardless how cheap you are or how amazing the quality it is
Cant think of anymore right now, feel free to add!~ Pls correct me if I am wrong...
Strong domestic growth
Recession overseas - incomes abroad decreases, therefore our exports decrease
there are also specific "supply-side" causes of a deficit:
depletion of resources
if i've made any mistakes, please let me know
Also changes to domestic real incomes (already mentioned international incomes)....a rise in domestic incomes..... increase in demand for imports, no change to exports.......trade deficit
I think between us we have covered them all
The textbook isn't great for this as it was written in like 2008
I was thinking:
- Growing trade with China
- Increased exportation of services (especially financial and educational services)
- Increased trade with European Union countries (because of external tariff)
- Increased importation of consumer goods (from where labour costs are lower) and oil (as UK's supply runs out)
Anyone got any more? Are you guys going to also learn some statistics in case it's the essay question?
Usually, L1 and L2 are simple enough and for L3 and L4, references to the context if the question is specific to the case study should be good enough.
E.g. Question asks about how lower gov spending would reduce demand-pull inflation
for level 1- i might define inflation and say what gov spending is and that it is a part of Ad
level 2 - decrease in gov spending would lower AD etc
Level 3 - drawing a diagram to show this and analysing how the fall in AD will reduce the price level and a fall in R GDP. Note: it is not enough to say "the px level falls", you'd get the L3 marks for saying WHY it happens
Level 4 - the usual "depends on where the economy is functioning at" or something like that
hope that clears it up.
Any ideas on what the essay might be on this year?