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

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    for the supply side policy Q. I did income tax reduction and corporation tax reduction as 2 separate points...Would that count as 2 different points???
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    Is reducing the government budget deficit a macroeconomic objective?
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    (Original post by badaman)
    But that is not showing the conflict BETWEEN the macroeconomic objectives...
    the question said how does demand side policies conflict with marco objectives and not between marco objectives
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    (Original post by jimbo1234567890)
    the question said how does demand side policies conflict with marco objectives and not between marco objectives
    ''To what extent do demand side policies lead to conflicts between macroeconomic objectives'' (30 marks)
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    (Original post by AJC1997)
    for falling productivity I talked about the current account deficit - poor productivity compared to other G7 countries would cause a deterioration on the current account as UK exports would become less competitive.

    Also it would cause a decrease in real income as extract 1 said people were accepting lower wages to keep their job, so disposable income/consumer spending would decrease, also firms may lay off workers to cut costs to try and become more competitive so it could lead to unemployment.

    Also if demand decreased at a lower rate than the decrease in potential output (as the uk would be operating in a negative output gap) it would lead to inflation..evaluated all of these eg depends on the level of consumer confidence in the economy.......inelastic demand for labour so.......can't remember everything.

    This would be ok right?

    I don't think you can talk about them laying off workers directly because they said in the passage that employers kept workers as they were willing to accept lower wages. How i did it was i spoke about how (X-M) was a component of AD so when (X-M) fell this leads toa fall in AD (real GDP) and may lead to a fall in employment.
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    HEY GUYS
    I did question 2 did anyone else?
    It was similar to last year's regarding productivity so found it a wise choice. I spent ten minutes deciding which one would be best for me lol

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    did the question1 30 marker say with marco or between marco objectives
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    For question 2, falling in productivity, can you not say that firms can lay off workers? will that not be accepted. I said that falling productivity may make firms to switch production making it more capital intensive, thus this will cause structural unemployment
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    (Original post by jimbo1234567890)
    did the question1 30 marker say with marco or between marco objectives
    'To what extent do demand side policies lead to conflicts between macroeconomic objectives'' (30 marks)
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    (Original post by badaman)
    'To what extent do demand side policies lead to conflicts between macroeconomic objectives'' (30 marks)
    ahh ffs i talked about with marco
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    (Original post by jimbo1234567890)
    ahh ffs i talked about with marco
    Yeah dude I know some people who did too. :/
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    (Original post by falloutboyyy)
    HEY GUYS
    I did question 2 did anyone else?
    It was similar to last year's regarding productivity so found it a wise choice. I spent ten minutes deciding which one would be best for me lol

    Posted from TSR Mobile
    Question was slightly different, it wasnt about increasing productivity but rather increasing production, therefore you had to conclude every Anylsis point by saying 'this will result in in increase in real GDP/real output not simply increase producivity, if you dont they cap you at 2/4 for every analysis for not focusing on the question"
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    (Original post by Praveen101)
    I don't think you can talk about them laying off workers directly because they said in the passage that employers kept workers as they were willing to accept lower wages. How i did it was i spoke about how (X-M) was a component of AD so when (X-M) fell this leads toa fall in AD (real GDP) and may lead to a fall in employment.
    Hmm i'm not sure, I mentioned it as a kind of side note with my point about how real income levels will fall and hence so too will consumer spending. As a result, since labour is a derived demand and domestic consumer expenditure is likely to fall, firms will most likely have to reduce employment levels as their output will no longer be needed as the level of demand is low.

    Yes My first point was about (X-M) and the current account deficit which i went into a lot of detail about.
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    (Original post by badaman)
    Yeah dude I know some people who did too. :/
    Yeah I feel like eating a ****ing bullet over, I got so happy that I managed to pick up speed after the first part and was able to have 25 minutes for the 30 marker and then this crap happens. God if I didn't have math and history tomorrow I'd probably drink myself to sleep tonight. ****!
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    what did you guys write for the last 12 marker on q2?
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    (Original post by AsianPersuasion6)
    for the supply side policy Q. I did income tax reduction and corporation tax reduction as 2 separate points...Would that count as 2 different points???
    I see no reason as to why they would not credit you for that, as one refers to consumers and the other refers to firms.
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    (Original post by bla123)
    what did you guys write for the last 12 marker on q2?
    What was the question again?
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    guys im 100% sure the question said with and not between.
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    For the Question 1 30 Marker, does REMOVING any remaining QE count as a valid demand-side monetary policy?
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    (Original post by bla123)
    what did you guys write for the last 12 marker on q2?
    A fall in productivity will cause potential output to fall and a rise in price levels
    Diagram displaying AS shifting inwards and upwards

    Point 1)
    Less price competitive exports, demand for exports fall and the demand for imports increase as they are cheaper than domestic goods, this leads to worsening of the current account on the BOP

    e/v PED, exports are PED inelastic so export revenue may actually increase

    Point 2)

    Export revenue may fall and import expenditure will ise therefore (X-M) falls, leading to a fall in AD and a fall in real GDP and employment

    e/v - Small component of AD, changes in other components of AD
 
 
 
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