OCR ECONOMICS F582 The National and International Economy [UNIT 2 - 19TH MAY 2015]

Scroll to see replies

If firms increase investment in the short run AD will increase but in the long run can i argue LRAS will increase as productive capacity expands as a result of the investment?

Posted from TSR Mobile

Reply 381

manik95

Original post by BigFreakyGinger

Can someone help me with this question:
Explain the difficulties of measuring unemployment?

different countries use different measures so hard to make comparisons

doesn't take into consideration the economically inactive e.g. part time careers,

who's actually unemployed is e.g. race, gender, Age, location.

doesn't take into account under-employment such as people who are working part time jobs but want to work full time and longer hours

Reply 382

manik95

Original post by clara16

If firms increase investment in the short run AD will increase but in the long run can i argue LRAS will increase as productive capacity expands as a result of the investment?

Posted from TSR Mobile

productive capacity would increase in the long run if you could talk about technological advances and education where there's a increase in productivity and goods are produced much more efficiently and are of a high quality etc.

Reply 383

manik95

anyone have any predictions about what may come out on this paper I heard someone say unemployment for 18 mark would help if someone had a slight idea about the policy they might ask for or something.

Reply 384

_Fergo

Original post by manik95

Well, they can ask all three policies when it comes to employment, inflation and economic growth. Make sure you study all equally though. Predictions are more likely to be wrong than correct.

Posted from TSR Mobile

Reply 385

clara16

I know this is lengthy but feedback on my essay would be much appreciated. Happy to give feed back in return.

"Discuss the effectiveness of lowering interest rates in order to stimulate economic growth" - 18m
ImageUploadedByStudent Room1431890214.432830.jpg

ImageUploadedByStudent Room1431890214.432830.jpg

ImageUploadedByStudent Room1431890230.106119.jpg

ImageUploadedByStudent Room1431890251.161739.jpg

ImageUploadedByStudent Room1431890269.763727.jpg

Posted from TSR Mobile

Reply 386

manik95

Original post by clara16

Posted from TSR Mobile

to me it seems pretty good but I think you forgot to put in the definitions of economic growth and interest rates.

but id probably give between 13-15 marks as a strict marker by the way did you write your essay using notes or by the mark scheme

Reply 387

clara16

Original post by manik95

So with those definitions i could hope for 16/18 would you say?

Neither this is just off the top of my head, i do a rough plan write my answer and check my notes at the end. If I've missed anything i add them in with a different colour pen but i didn't have anything to add from my notes this time

Posted from TSR Mobile

Reply 388

manik95

Original post by clara16

I think so yeah but I would like to remind you that you need to have a conclusion which answers whether its effective or not reading yours it does seem you trying to play it safe and used it near the end of you essay i think you should add something like its effective on a most of the components of AD and so has a multiplier effect which benefits the Real GDP overall.

like I said that's just a basic example but yeah good never the less

Reply 389

Yousf

Why do firms need to invest when there is high demand in an economy?

Reply 390

Pato1

So they can invest in capital/workers to meet with demand so there won't be demand pull inflation. Basically they need to invest in the LRAS.

Reply 391

manik95

Original post by Yousf

Why do firms need to invest when there is high demand in an economy?

because there will be demand pull inflation as the current factors of production are being used to the max and so to match this demand there will investments in technology and labour which will increase it actual output

Reply 392

Pato1

It will also stop wage push inflation from occurring as workers would have to work overtime to meet with demand and would want higher wages

Reply 393

Yousf

Can a fall in inflation be a reason why investment is likely to increase

Reply 394

manik95

what are the benefits and disadvantages of protectionism

Reply 395

Rk2k14

Ad- Protecting domestic firms
- Could create more jobs
- Less imports could mean more exports therefore trade deficit (if there is one) could be reduced

Dis- Retaliation from abroad
- Consumers don't benefit as they may have to pay more for goods.

Reply 396

manik95

Original post by Pato1

It will also stop wage push inflation from occurring as workers would have to work overtime to meet with demand and would want higher wages

well to add to that you can talk about the it doesn't increase the price of business tax so they retain more profit to invest

Reply 397

Hody421

Original post by Yousf

Can a fall in inflation be a reason why investment is likely to increase

Fall in inflation increases price competitiveness of firms, may increase demand for exports (goods they produce), hence they increase productive capacity to keep up with demand.