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Economics Unit 2 Edexcel - Managing the UK economy Tuesday 19th May 2015 (PM) Watch

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    (Original post by Mowtoe)
    This may sound stupid but i was just wondering, how exactly do you define macroeconomic objectives? Could you just say objectives that the government wishes to pursue?
    Objectives that the government wishes to fulfill, or get close to fulfilling annually. You would then state the 6 objectives.
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    (Original post by Mowtoe)
    This may sound stupid but i was just wondering, how exactly do you define macroeconomic objectives? Could you just say objectives that the government wishes to pursue?
    My teacher told me that they are objectives that the government find most important to improve the economy as a whole, there are many objectives so i guess it will be hard to give it an overall definition.
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    (Original post by Mowtoe)
    Thank you! and yesss unit 1 was horrible
    (Original post by irMike)
    Glad it's not just me thinking this... Worst Unit 1 paper I've done by a country mile.
    I'm thinking it'll be 30 markers on fiscal policy and economic development/macroeconomic objectives in general or a mix of objectives with fiscal policy as these haven't come up in a while. Are the 30 markers always related to monetary policy, fiscal policy, supply side policy, economic growth and economic development with macroeconomic objectives thrown in as a mix with these topics? Could an 30 marker on say unemployment or BoP come up?

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    (Original post by TeddyBearMike)
    Any one done this question, Assess impact of UK government labour market policies on any thee macroeconomic objectives...
    fall in benefits - Catalyse/initiate an increased incentive for the unemployed to find work.Thus, spare-capacity in the economy being filled moving economy closer towards being "fully and efficiently" employed. Thus, causing economic growth - Macro Objective.

    NMW falling also means businesses cost of production falls, thus businesses are more likelier to hire more workers, ultimately leading to increased employment which is a macroeconomic objective. Also, government tax-receipts will increase, but also government spending on JSA will decrease as more employed.

    Trainining/education schemesimproving occupational mobility for students, who will be the next gen of work force.Thus, shifting LRAS to the right.. economic growth...

    However, time-lagg...inefficient use of funds by training scheme operators/schools e.g. Madonna studies (yes this was an example on a MS)

    A fall in benefits may truly hurt the macroeconomic objective of "Reduced income inequality" as some people may genuinely have reasons to be claiming benefits e.g. struggling to find work or may truly be suffering from illnesses preventing them from entering field of work.

    Another conflict would also be NMW falling may result in a fall in consumption from the large number of population being paid NMW. "Consumption" falling may outdo any benefits derived from a benefits gained from the earlier mentioned policy as "Consumption" forms 66.4% of AD, making it the largest and most influential component of AD. Therefore, cost - benefit analysis maybe used to highlight the conflict.
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    (Original post by .JC.)
    This was the 30 marker on my mock exam a few weeks back.

    I wrote about economic growth, reducing unemployment and reducing the national debt.

    One policy is to improve education and training, so productivity improves and leads to an outward shift in AS. This leads to an increase in GDP (one objective) and a decrease in inflation (another but I didn't write about it). This also satisfies the objective to reduce unemployment, as more people will have skills to be employable, which leads to lower unemployment.

    However, initially it is very costly for the government. They will have to either borrow money (increasing national debt, contradicting one objective) or increase taxes. Increasing taxes could put people off working longer hours/more demanding jobs, so the fall in AS could counteract the increase that the training schemes provided.

    Furthermore, in the short run the impact will not be noticeable, but in the long run it will, since it takes a long time to train people through education. Additionally, in the long run more people will be employed, thus more people are paying taxes, which means that the government get more money from tax revenue, so the national debt reduces. Similarly, when more are employed, less is spend on benefits, so this further reduces the national debt.


    Government could also 'push' people towards working, by reducing the minimum wage and making means tests for IB more strict. This means supply increases as those who were claiming IB are now in work. This satisfies the aims of lower unemployment, and also helps reduce national debt due to the factors mentioned earlier (less spent on IB, more tax revenue).

    However, in the short run when people aren't claiming IB they will not be taken into account by the CC, but they will with the ILO. This could skew unemployment data. In the short run, if IB is cut, then AD would decrease as income would be lower for those who previously had it. However in the long run it would increase as these people would find jobs (theoretically). This increase in AD satisfies the objective for economic growth.

    Government could also make changes to taxation to improve national debt. This could however put people off working if they are getting taxes more on their income. They would contradict the objective of lowering unemployment. Furthermore, if people decide to claim job-seekers rather than work, government spends more on that, which could increase the national debt and counteract the effect that the taxes initially had.

    I also spoke briefly about magnitude to grab an extra mark.

    PS: Bloody hope you appreciate this BTW, spent about 20 minutes typing it out!
    Lol cheers i was thinking along the lines of pretty much everything you wrote, some times its hard to relate to the mark scheme when there are many answers that can be put down espically the essay questions.
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    (Original post by Mowtoe)
    This may sound stupid but i was just wondering, how exactly do you define macroeconomic objectives? Could you just say objectives that the government wishes to pursue?
    Aims that the government wish to achieve, so as to improve the greater economic/social good of an economy. Then list them, I think.

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    (Original post by .JC.)
    Objectives that the government wishes to fulfill, or get close to fulfilling annually. You would then state the 6 objectives.
    Spoiler:
    Show
    I only know 5 :eek:
    Economic growth
    restoring equilibrium on the balance of payments
    Reducing unemployment
    Reducing the budget deficit
    stable prices (low inflation)
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    Good luck Lads and Ladies, im of to bed, at leasts its afternoon exam so plenty of time to go over notes in the morning.
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    (Original post by Mowtoe)
    Spoiler:
    Show
    I only know 5 :eek:
    Economic growth
    restoring equilibrium on the balance of payments
    Reducing unemployment
    Reducing the budget deficit
    stable prices (low inflation)
    Enviroment
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    (Original post by TeddyBearMike)
    Good luck Lads and Ladies, im of to bed, at leasts its afternoon exam so plenty of time to go over notes in the morning.
    Dude I'm using it as an opportunity to get some sleep haha.

    Last monday for Unit 1, Went into the exam with three hours sleep, absolute nightmare.
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    (Original post by blindambition)
    Anyone want to give me some tips on how to make sophisticated brief conclusions for the evaluative questions? Particularly the 30 markers as I am usually constrained with time (didn't finish Unit 1 but wrote well enough to steal an A) and tend to want to avoid a conclusion as they aren't marked but are good to have for QWC.
    I'd say outline the three points that you've already made in the 30 marker and then weigh them out so you let the examiner know which one is a priority. I think conclusions are pretty important because you can gain evaluation marks by prioritising. Good luck!
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    (Original post by Mowtoe)
    Spoiler:
    Show
    I only know 5 :eek:
    Economic growth
    restoring equilibrium on the balance of payments
    Reducing unemployment
    Reducing the budget deficit
    stable prices (low inflation)
    Then it's the waffly ones lol, improving standards of living, improving equal distribution of income and wealth.

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    (Original post by Mowtoe)
    Spoiler:
    Show
    I only know 5 :eek:
    Economic growth
    restoring equilibrium on the balance of payments
    Reducing unemployment
    Reducing the budget deficit
    stable prices (low inflation)
    Environment, Income equality and Productivity I think are the others.
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    Economic Growth
    Low Unemployment
    Current Account Balance of Payments
    Low but steady Inflation within 1% - 3% range.
    Environmental Sustainability.
    Distribution of Income

    Those are the main 6 you need to know for specification.
    But talking about "Reducing Budget Defecit" would/should more than likely be correct.
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    Good luck everyone!
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    (Original post by TeddyBearMike)
    My teacher told me that they are objectives that the government find most important to improve the economy as a whole, there are many objectives so i guess it will be hard to give it an overall definition.
    thank you! my teacher was going through some 30 markers with me and there was a question that came up and she told me i'll need to define 'macroeconomic objectives' but i'm sure if it does i'll have something to say
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    (Original post by .JC.)
    This was the 30 marker on my mock exam a few weeks back.

    I wrote about economic growth, reducing unemployment and reducing the national debt.

    One policy is to improve education and training, so productivity improves and leads to an outward shift in AS. This leads to an increase in GDP (one objective) and a decrease in inflation (another but I didn't write about it). This also satisfies the objective to reduce unemployment, as more people will have skills to be employable, which leads to lower unemployment.

    However, initially it is very costly for the government. They will have to either borrow money (increasing national debt, contradicting one objective) or increase taxes. Increasing taxes could put people off working longer hours/more demanding jobs, so the fall in AS could counteract the increase that the training schemes provided.

    Furthermore, in the short run the impact will not be noticeable, but in the long run it will, since it takes a long time to train people through education. Additionally, in the long run more people will be employed, thus more people are paying taxes, which means that the government get more money from tax revenue, so the national debt reduces. Similarly, when more are employed, less is spend on benefits, so this further reduces the national debt.


    Government could also 'push' people towards working, by reducing the minimum wage and making means tests for IB more strict. This means supply increases as those who were claiming IB are now in work. This satisfies the aims of lower unemployment, and also helps reduce national debt due to the factors mentioned earlier (less spent on IB, more tax revenue).

    However, in the short run when people aren't claiming IB they will not be taken into account by the CC, but they will with the ILO. This could skew unemployment data. In the short run, if IB is cut, then AD would decrease as income would be lower for those who previously had it. However in the long run it would increase as these people would find jobs (theoretically). This increase in AD satisfies the objective for economic growth.

    Government could also make changes to taxation to improve national debt. This could however put people off working if they are getting taxes more on their income. They would contradict the objective of lowering unemployment. Furthermore, if people decide to claim job-seekers rather than work, government spends more on that, which could increase the national debt and counteract the effect that the taxes initially had.

    I also spoke briefly about magnitude to grab an extra mark.

    PS: Bloody hope you appreciate this BTW, spent about 20 minutes typing it out!
    Thanks so much for writing this out! Just a quick question, what exactly comes under 'Labour market policy'? Would that just be anything affecting consumers/households, and so would that include interest rates or not? Thanks

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    (Original post by Experi-)
    Macroeconomic Objectives: Aims/Targets of governments to improve economic welfare.
    Thank you
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    (Original post by nurav11)
    Then it's the waffly ones lol, improving standards of living, improving equal distribution of income and wealth.

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    Aha fair enough! thank you
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    (Original post by nurav11)
    Thanks so much for writing this out! Just a quick question, what exactly comes under 'Labour market policy'? Would that just be anything affecting consumers/households, and so would that include interest rates or not? Thanks

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    Labour market policies are policies the government can implement in order to aid the labour market. That's why choosing employment for that question was vital, because that's essentially what the question was about. How the government can improve the labour market and the conflicts it may cause.
 
 
 
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