Join TSR now and get all your revision questions answeredSign up now

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

    Offline

    2
    ReputationRep:
    Can someone explain purchasing power parity for me please?

    Posted from TSR Mobile
    Offline

    1
    ReputationRep:
    Anyone have any reliable predictions?
    Offline

    1
    ReputationRep:
    Is conflicts likely to appear as a 30 marker?
    Offline

    3
    ReputationRep:
    (Original post by annngelx)
    Is conflicts likely to appear as a 30 marker?
    Yes
    Offline

    1
    ReputationRep:
    ONS just announced CPI has fallen to -0.1% were in deflation.
    Offline

    3
    ReputationRep:
    I know a few eval points for conflict between policies e.g if growth is export led and if growth is sustainable eg both AD and AS increase, what other evaluation points could I use for conflicts?
    Offline

    2
    ReputationRep:
    You can prioritise between factors, e.g. inflation and unemployment, arguably reducing unemployment is more important as some inflation cushions against deflation.

    (Original post by member1753327)
    I know a few eval points for conflict between policies e.g if growth is export led and if growth is sustainable eg both AD and AS increase, what other evaluation points could I use for conflicts?
    Offline

    3
    ReputationRep:
    omg guys -0.1% CPI inflation.
    Recession incoming lets all cry.
    Offline

    3
    ReputationRep:
    Can some factors that cause a movement along the AD curve cause unemployment as well?
    Offline

    3
    ReputationRep:
    (Original post by Windies)
    omg guys -0.1% CPI inflation.
    Recession incoming lets all cry.
    Is this likely to come up on an exam
    Offline

    2
    ReputationRep:
    (Original post by member1753327)
    Is this likely to come up on an exam
    Haha not for today otherwise they'd be seriously good economists who should be working for the MPC rather than Edexcel . Quite possibly might come up in future exams though, which would be cool.

    Posted from TSR Mobile
    Offline

    2
    ReputationRep:
    Help!!! Whats the link between unemployment and inflation and why why why??
    Offline

    0
    ReputationRep:
    (Original post by Rubberduckiller)
    Help!!! Whats the link between unemployment and inflation and why why why??
    More people employed, more people spending money and higher wages. This leads to inflation. Evaluative point is that it is hard for the government to manipulate this because their actions are transparent and spending to increase employment is likely to be absorbed into wages
    Offline

    3
    ReputationRep:
    (Original post by Rubberduckiller)
    Help!!! Whats the link between unemployment and inflation and why why why??
    When companies are exhibiting cost-push inflationary pressures, e.g. rise in commodity price of oil, which is a factor of production. The costs of production will therefore increase, translating to businesses being more stringent on investment and simultaneously making workers redundant, hence "Unemployment" increasing. The negative effect of this will be compounded by the fact that, JSA government expenditure will increase whilst simultaneously government tax-receipts from income-tax/co-orporation tax will also decrease, thus putting a strain on the fiscal budget, which may result in more "cuts" on government spending e.g. JSA, education NHS etc.

    In stark contrast, when companies are exhibiting "demand-pull inflation," it "signals" to the businesses that there is a high-demand for their goods and services, in turn initiating the 'signal' for increased investment - expansion in capacity. In turn, because demand for labour is a derived demand for an increase in demand for goods and services, "employment" will increase after business investment in capacity. Government Expenditure on JSA will decrease, whilst simultaneously receiving more tax-revenue. This will in turn ease the strains on the gov fiscal budget aswell as contributing to economic growth, employment and possible more stable prices in the future.

    And there are many more arguments.
    Offline

    2
    ReputationRep:
    (Original post by windies)
    when companies are exhibiting cost-push inflationary pressures, e.g. Rise in commodity price of oil, which is a factor of production. The costs of production will therefore increase, translating to businesses being more stringent on investment and simultaneously making workers redundant, hence "unemployment" increasing. The negative effect of this will be compounded by the fact that, jsa government expenditure will increase whilst simultaneously government tax-receipts from income-tax/co-orporation tax will also decrease, thus putting a strain on the fiscal budget, which may result in more "cuts" on government spending e.g. Jsa, education nhs etc.

    In stark contrast, when companies are exhibiting "demand-pull inflation," it "signals" to the businesses that there is a high-demand for their goods and services, in turn initiating the 'signal' for increased investment - expansion in capacity. In turn, because demand for labour is a derived demand for an increase in demand for goods and services, "employment" will increase after business investment in capacity. Government expenditure on jsa will decrease, whilst simultaneously receiving more tax-revenue. This will in turn ease the strains on the gov fiscal budget aswell as contributing to economic growth, employment and possible more
    stable prices in the future.

    And there are many more arguments.
    and how does this link to the phillips cureve
    Offline

    1
    ReputationRep:
    (Original post by Rubberduckiller)
    Help!!! Whats the link between unemployment and inflation and why why why??
    There is a trade off between low unemployment and high inflation. If you want really low unemployment, then you must accept high inflation.

    This is because high employment pushes up wage levels as firms compete to get the more skilled labor.

    Higher incomes = more consumption = boost AD = higher inflation

    This can be seen on the Phillips curve

    Name:  phillips.gif
Views: 102
Size:  4.0 KB

    Hope this helped
    Offline

    0
    ReputationRep:
    I reckon something about HDI will come up
    ya bish
    Offline

    3
    ReputationRep:
    (Original post by Rubberduckiller)
    and how does this link to the phillips cureve
    The "demand-pull inflation" agrees with the Philip curve in that as inflation increases, employment also will increase after business investment.

    However, it disagrees with "cost-push inflation" argument because inflation in that line of argument results in unemployment.
    Offline

    2
    ReputationRep:
    THNX
    (Original post by joecoulburn)
    There is a trade off between low unemployment
    and high inflation. If you want really low unemployment, then you must accept high inflation.

    This is because high employment pushes up wage levels as firms compete to get the more skilled labor.

    Higher incomes = more consumption = boost AD = higher inflation

    This can be seen on the Phillips curve

    Name:  phillips.gif
Views: 102
Size:  4.0 KB

    Hope this helped
    Offline

    0
    ReputationRep:
    what's everyone wearing?
 
 
 
Poll
How are you feeling about GCSE Results Day?

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Quick reply
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.