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

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    what's everyone gonna wear
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    (Original post by pelvisterminator)
    what's everyone gonna wear
    A suit
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    (Original post by pelvisterminator)
    what's everyone gonna wear
    a wetsuit
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    (Original post by pelvisterminator)
    what's everyone wearing?
    A big raincoat because it's raining really hard today!

    Does anyone wish that this was a morning exam? It'd be over by now if it was.
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    Bit of a longshot here.
    Regarding monetary policy for tackling unemployment I understand that lowering interest rates would result in investment thus creating job opportunities and leading to a rise in economic growth. But how can I put all this into a 30 mark question which the question would be something along the lines of 'macroeconomic policies to tackle unemployment'?
    I feel I lack the material and knowledge to include this into a 30 mark question.
    What else could I talk about in regards to monetary policy? Could someone upload an essay plan of monetary policy to tackle unemployment.
    NOTE: I would also talk about SS and fiscal policy just need a bit of a structure and guidance of putting everything together.

    Thanks
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    I wish it was a morning exam!

    Does anyone know the current rate of unemployment right now? I was thinking to use the figure to compare it to the deflation of -0.1% if a conflict question comes up.
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    (Original post by painter96)
    Bit of a longshot here.
    Regarding monetary policy for tackling unemployment I understand that lowering interest rates would result in investment thus creating job opportunities and leading to a rise in economic growth. But how can I put all this into a 30 mark question which the question would be something along the lines of 'macroeconomic policies to tackle unemployment'?
    I feel I lack the material and knowledge to include this into a 30 mark question.
    What else could I talk about in regards to monetary policy? Could someone upload an essay plan of monetary policy to tackle unemployment.
    NOTE: I would also talk about SS and fiscal policy just need a bit of a structure and guidance of putting everything together.

    Thanks
    You would analyse step by step how lowering interest rates could tackle unemployment because the examiners like it when you really make it obvious to them and then include real world examples so you could talk about the HS2 investment creating jobs etc.

    Then you could say how lowering interest rates not only increases investment but also increases consumption which is more of an important component of AD because its 61% (so you're prioritising) and then talk about the multiplier effect and how through increased consumption that can lead to decreased unemployment.

    Always remember to link back to the question after each paragraph! Hope this made some sort of sense
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    (Original post by painter96)
    Bit of a longshot here.
    Regarding monetary policy for tackling unemployment I understand that lowering interest rates would result in investment thus creating job opportunities and leading to a rise in economic growth. But how can I put all this into a 30 mark question which the question would be something along the lines of 'macroeconomic policies to tackle unemployment'?
    I feel I lack the material and knowledge to include this into a 30 mark question.
    What else could I talk about in regards to monetary policy? Could someone upload an essay plan of monetary policy to tackle unemployment.
    NOTE: I would also talk about SS and fiscal policy just need a bit of a structure and guidance of putting everything together.

    Thanks
    Ok, the 30 marker is honestly the easiest part of the paper in my opinion. In terms of unemployment, supply side policies to consider for reducing unemployment are: Education and training, reducing state welfare benefits to encourage people to look for a job. Education and training will allow for workers to be skilled and easier to find employment. However, time lag for this, even more so with education. Reducing state welfare benefits can cause people on benefits to have a reduction in their income from the government. This could pressure them into finding a job. Another to think about is a reduction in corporation tax. Decrease in corporation tax = increase in business profits = an increase in investment = more employment. Never forget about evaluation. Example, a reduction in corporation tax might not work as business may wish to retain profits due to the lack of confidence due to a fear of a recession. Also, remember. 6 marks for defining key terms in the question. Example, "Example how supply side policies can be used to reduce unemployment in the economy". Define Supply Side Policies and unemployment, refer them to the extract. This can obtain you 6 marks. For Knowledge, application, and analysis. 2 well thought out points 6 marks each or 3 points for 4 marks each. Always go for 3 to be safe if possible. This will total in 18 marks in total, then 12 marks for your evaluation. Again, 2 evaluated points for 6 marks each or 3 for 4 marks each.
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    ONS have just announced deflation of -0.1%. Deflation for the first time in 50 years.
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    (Original post by aniqaaai)
    ONS have just announced deflation of -0.1%. Deflation for the first time in 50 years.
    Today? Thought it was still 0%. Thanks!
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    (Original post by aniqaaai)
    You would analyse step by step how lowering interest rates could tackle unemployment because the examiners like it when you really make it obvious to them and then include real world examples so you could talk about the HS2 investment creating jobs etc.

    Then you could say how lowering interest rates not only increases investment but also increases consumption which is more of an important component of AD because its 61% (so you're prioritising) and then talk about the multiplier effect and how through increased consumption that can lead to decreased unemployment.

    Always remember to link back to the question after each paragraph! Hope this made some sort of sense

    Would you mind giving me a basic essay plan or idea on how I could actually structure this because I don't think just one point that low interest rates resulting in investment would be enough to get a decent grade?
    What else could I talk about?
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    (Original post by terryhb)
    Today? Thought it was still 0%. Thanks!
    Yep! Apparently that's why it was set as a PM exam so it would be useful including that information. Good luck!
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    (Original post by painter96)
    Would you mind giving me a basic essay plan or idea on how I could actually structure this because I don't think just one point that low interest rates resulting in investment would be enough to get a decent grade?
    What else could I talk about?
    I think just talking about interest rates for monetary policy would give you the marks. I guess you could mention quantitative easing as a way of putting money into the economy and you could say that the UK has put in more than £375bn in virtual money. QE is useful in tackling unemployment because it makes money available to banks to lend to businesses and individuals meaning that they can employ more people etc.

    And then evaluation would be time lag and you could mention the J curve.

    For monetary policy all you can really talk about is interest rates and quantitative easing.

    Good luck!
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    (Original post by aniqaaai)
    I think just talking about interest rates for monetary policy would give you the marks. I guess you could mention quantitative easing as a way of putting money into the economy and you could say that the UK has put in more than £375bn in virtual money. QE is useful in tackling unemployment because it makes money available to banks to lend to businesses and individuals meaning that they can employ more people etc.

    And then evaluation would be time lag and you could mention the J curve.

    For monetary policy all you can really talk about is interest rates and quantitative easing.

    Good luck!
    Completely forgot about quantitative easing. Thanks for that.
    Have a feeling that the exam will have a question on inflation as there has been some talk for a while about us hitting deflation. Don't think the question will be directly on deflation but nice to include it anyway.
    Any idea on inflation questions? Policies to tackle it seems a likely possibility, consequences of inflation etc?. Anyone have a plan for any of these questions?
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    (Original post by aniqaaai)
    In regards to structure, I'd say:

    Intro
    Monetary policy:
    - interest rates
    - quantitative easing
    - eval
    Fiscal policy:
    - reducing income tax
    - increasing gov spending
    - eval
    Supply side policy:
    -education and training
    -reducing NMW
    -eval
    Conclusion

    (Or whatever points you would use for each policy.)
    That's great. In terms of government spending surely that would be a form of SS policy especially in regards to education/training.
    Or by government spending do you mean infrastructure, any other factors?
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    (Original post by golden tribe)
    Is money supply the same as quantative easing
    Pretty much, but it's effected by interest rates too, because if they're lower, people will borrow more money, increasing the money supply
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    What time's everyones exam?
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    Fiscal policy and SS policy interlink a lot because part of fiscal policy is the use of government spending. You just have to be specific when talking about them separately by saying that the government spending in fiscal policy would increase AD (and you can illustrate the rightward shift in AD with an AD/AS curve) whereas in SS policy government spending would increase AS (and illustrate with a rightward shift in AS on an AS/AS curve).
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    Does anyone have a plan or any structure to tackling inflation?
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    Is decreasing tax on profits considered fiscal policy as well as supply side policies?
 
 
 
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