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

    3
    ReputationRep:
    (Original post by fatimazahid)
    someone help me on inflation, and the typical questions you'd get for it... have a feeling it might come up
    Inflation is the general rise in price. Inflation is measured using the Consumer Price Index (CPI). Inflation can be demand-pull (shift in AD) and cost-push due to rising oil prices and such.

    You need to know the difference between RPI and CPI, and how CPI is calculated.

    Inflation will not always rise when AD increases, because it depends on the elasticity of the AS curve, important evaluation point when you mention anything to do with a decrease or increase in AD.
    Offline

    2
    ReputationRep:
    Im confused about HDI. What do I need to know about it and development in general? How is it measured?
    Offline

    0
    ReputationRep:
    (Original post by member1753327)
    Inflation is the general rise in price. Inflation is measured using the Consumer Price Index (CPI). Inflation can be demand-pull (shift in AD) and cost-push due to rising oil prices and such.

    You need to know the difference between RPI and CPI, and how CPI is calculated.

    Inflation will not always rise when AD increases, because it depends on the elasticity of the AS curve, important evaluation point when you mention anything to do with a decrease or increase in AD.

    thank you very much, looking at recent economic news, do you think deflation is a potential question, and how would you go about discussing that?
    Offline

    0
    ReputationRep:
    Do you get credited for answers, despite for them not being in the mark scheme?
    Offline

    3
    ReputationRep:
    (Original post by fatimazahid)
    Do you get credited for answers, despite for them not being in the mark scheme?
    Yes if they are valid, and of course if they are correct. The MS is simply a guide for examiners and a primary example when marking
    Offline

    3
    ReputationRep:
    (Original post by fatimazahid)
    thank you very much, looking at recent economic news, do you think deflation is a potential question, and how would you go about discussing that?
    Deflation is a decrease in the price level. Depends on the question, you would get most information from the data, you can argue that deflation is worse than inflation, I highly doubt deflation will come up, but it is simply the opposite of inflation.
    Offline

    3
    ReputationRep:
    (Original post by Daniel123)
    Im confused about HDI. What do I need to know about it and development in general? How is it measured?
    It is measured basing on: education, longevity and GDP per capita.
    Think you should know all these 3 factors, and maybe know its advantages and disadvantages when comparing 2 countries together.
    Offline

    3
    ReputationRep:
    Okay so can someone tell me the difference between rpi and cpi please xx
    Offline

    3
    ReputationRep:
    (Original post by member1753327)
    Inflation is the general rise in price. Inflation is measured using the Consumer Price Index (CPI). Inflation can be demand-pull (shift in AD) and cost-push due to rising oil prices and such.

    You need to know the difference between RPI and CPI, and how CPI is calculated.

    Inflation will not always rise when AD increases, because it depends on the elasticity of the AS curve, important evaluation point when you mention anything to do with a decrease or increase in AD.
    How would u write that evaluation point? Like what part of the curve is elastic and what is inelastic?? like would I say

    Inflation however may not rise if the initial AD curve is on the elsstic/inelastic part of the As curve????
    Offline

    3
    ReputationRep:
    (Original post by falloutboyyy)
    Okay so can someone tell me the difference between rpi and cpi please xx
    RPI includes mortgage repayments and housing costs such as council tax
    Offline

    3
    ReputationRep:
    (Original post by falloutboyyy)
    Okay so can someone tell me the difference between rpi and cpi please xx
    CPI has a base year of 2005, excluding mortgage payment and generally housing market.
    RPI includes these, and generally exceeds CPI.
    Offline

    3
    ReputationRep:
    (Original post by falloutboyyy)
    How would u write that evaluation point? Like what part of the curve is elastic and what is inelastic?? like would I say

    Inflation however may not rise if the initial AD curve is on the elsstic/inelastic part of the As curve????
    However this depends on the state of the economy, if the economy has huge amounts of spare capacity and is on the elastic portion of the curve, an increase in AD will not cause the price level to change, however real output would increase without any inflationary pressures or very little un significant inflation as shown in this graph.



    However if the economy is close to full capacity, an increase in AD will have no to little effect on real GDP, however there would be an increase in inflationary pressure.

    Attached Images
     
    Offline

    3
    ReputationRep:
    (Original post by falloutboyyy)
    How would u write that evaluation point? Like what part of the curve is elastic and what is inelastic?? like would I say

    Inflation however may not rise if the initial AD curve is on the elsstic/inelastic part of the As curve????
    Inelastic AS means inflation rises. So imagining a vertical AS and AD shift outwards. Quantity does not change but price level increases, thus inflation rises.
    Offline

    3
    ReputationRep:
    Thanks so much ♡

    Posted from TSR Mobile
    Offline

    3
    ReputationRep:
    Cheers ♡

    Posted from TSR Mobile
    Offline

    3
    ReputationRep:
    (Original post by member1753327)
    However this depends on the state of the economy, if the economy has huge amounts of spare capacity and is on the elastic portion of the curve, an increase in AD will not cause the price level to change, however real output would increase without any inflationary pressures or very little un significant inflation as shown in this graph.



    However if the economy is close to full capacity, an increase in AD will have no to little effect on real GDP, however there would be an increase in inflationary pressure.

    Hey again
    Could you explain the lorenz curve and almost another model paragraph of how I'd use it, you're amazing ♡

    Posted from TSR Mobile
    Offline

    0
    ReputationRep:
    Any predictions?
    Offline

    2
    ReputationRep:
    Does anyone have template answers or the format we have to answer the Q's
    Offline

    3
    ReputationRep:
    Xx
    Attached Images
     
    Offline

    2
    ReputationRep:
    (Original post by falloutboyyy)
    Xx
    Thanks
 
 
 
Poll
How are you feeling about your A-level results?

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.