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

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    anyone who done question 2 and is confident, PM me, wanna swap answers
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    (Original post by AJC1997)
    maybe i remember incorrectly, but didnt it ask specifically what the components for 'the balance of payments current account'?

    I said what the balance of payments was firstly - record of transactions with foreign countries

    then said what the current account consisted of: exports + imports, explained them

    then gave an example: for example china has a current account surplus as it's growth is export led
    I don't think they wanted this, I put current transfers, trade of goods and services and income balance. Those are the components.
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    If you have time, rate my (question 2) 30 marker out of 30!

    --------------------------
    Supply side policies are macro-economic policies issued by the government to manipulate (long run) aggregate supply.

    [Fully labelled AD/LRAS diagram showing both curves shifting to the right]

    Point 1: One supply side policy that can increase real output is spending on education and training. This means that the economy will have a more qualified workforce which in turn increases the productive capacity of the economy Firms will get employ from a more qualified workforce which means that they can raise production which in turn leads to lower prices. This means that in the long run consumption should increase. This is shown in my AD/AS diagram: Increased consumption shifts AD to the right while the increased educated workforce shifts LRAS to the right.

    Eval 1: However education and training take a very long time to take effect. Investing in education means the results will only be seen when the students/trainees finish their education and enter the labour force. Governments may be hesitant to invest in education and training as they're more like to have short term views (5 years). The current party in power is not guaranteed to be re-elected to see the results and will be less likely to invest. [ugh, I just realised I could have mentioned brain drain]

    Point 2: Another supply side policy which can increase real output is investment in health. Investing in health means that the population is more healthy as they'll have better access to hospitals and health professionals such as doctors and nurses. A healthy workforce is important as it means there's less staff absenteeism. This means that healthy workers will have days off due to sickness and so enable firms to produce more. The governments benefits from this as they'll receive more money from income tax which they can potentially reinvest. Investing in health is also good because it means that the government will have to employ more public sector workers (e.g: doctors and nurses). This can decrease unemployment and it's also worth noting that an increase in public sector workers leads to an increase in consumption which leads to positive multiplier effects for the economy. This again can be shown on my diagram as increase in AD and AS.

    Eval 2: However investing in health may not be a good idea as it incurs an opportunity cost. The money spent on health could have been spent on other things that could have also increased output. All of this spending could lead the government to a budget deficit where taxation is lower than government spending. The costs associated with healthcare are massive, for example: A medical student's education costs the government around £200000. Private health firms may also be "crowded out" due to increased spending on healthcare. For example: A private hospital will receive lots of competition from a new government funded hospital. [Talked about more stuff but I forgot...]

    For my 3rd point I talked about trade union reform in the same style as above. I cba to type more lol:
    Point 3: Less power for trade unions = Hindered ability for strikes = Less strikes = Less chance of infastructure being halted (e.g: London bus strikes) = Less staff absenteeism = Govt getting their money's worth (in wages) from their workers = OVERALL: increase in real output

    Eval 3: Very controversial = Piss workers off = Current party in power less likely to do it because they want to be re-elected.
    -------------------

    Hopefully you found that useful!
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    (Original post by Beckybrook123)
    Are these points right: for benefits of low inflation and how many marks?

    1.) increase in competitiveness as goods relatively cheaper- so increased exports- improves CA
    EV=increased exports- appreciation of currency so actually decrease competitiveness

    2.) increased consumer and business confidence- increased AD - increased employment

    EV- can't remember lol
    I did the exact same points as you. I only evaluated point 1. Saying that after a while SPICED occurs. Hopefully we got it right.
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    (Original post by Jemy)
    Now these are completely different, aren't they? If tree eater is correct then it is essentially with.
    Hmm...now that i think about it.....i think eatthetree is right......maybe thats why so many people are so confused over it. The examiner may try to catch people out with the wordings. If you think about it : ''To what extent do demand side policies conflict between macroeconomic objectives'' can usually be interpreted in two different ways....
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    (Original post by Mistarymo)
    Hmm...now that i think about it.....i think eatthetree is right......maybe thats why so many people are so confused over it. The examiner may try to catch people out with the wordings. If you think about it : ''To what extent do macroeconomic policies conflict between macroeconomic objectives'' can usually be interpreted in two different ways....
    I am almost certain there was 'between' and 'the' and 'economy' in there, it would explain my 'with' rational and essentially mean a happy ending on my side. If this is true, damn was this a tricky question...
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    (Original post by annngelx)
    I'm certain it was between haha, don't worry guys
    Yeah it was 'To what extent do demand side policies lead to conflicts between macroeconomic objectives'' (30 marks)
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    (Original post by eatthetree)
    Could someone possibly, if they remember, post all of the Questions to Question 1, so far I have.

    30 Marker: To what extent do demand side policies conflict between the macroeconomic objectives of the economy?
    (Original post by Beckybrook123)
    Can someone write out their answer for the 30 marker on q1 - I did conflict 'with'. How many marks will I lose ....
    'To what extent do demand side policies lead to conflicts between macroeconomic objectives'' (30 marks) Was the Question for 30 marks on. Q 1 (d)
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    (Original post by Jemy)
    Now these are completely different, aren't they? If tree eater is correct then it is essentially with.
    (Original post by Mistarymo)
    Hmm...now that i think about it.....i think eatthetree is right......maybe thats why so many people are so confused over it. The examiner may try to catch people out with the wordings. If you think about it : ''To what extent do demand side policies conflict between macroeconomic objectives'' can usually be interpreted in two different ways....
    (Original post by Jemy)
    I am almost certain there was 'between' and 'the' and 'economy' in there, it would explain my 'with' rational and essentially mean a happy ending on my side. If this is true, damn was this a tricky question...
    'To what extent do demand side policies lead to conflicts between macroeconomic objectives' (30 marks)
    Or
    'To what extent do demand side policies conflict between the macroeconomic objectives of the economy?' (30 marks)

    The SAGA continues.
    It was 100% definitely NOT just WITH we can establish now.
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    (Original post by excaliburnus)
    If you have time, rate my (question 2) 30 marker out of 30!

    --------------------------
    Supply side policies are macro-economic policies issued by the government to manipulate (long run) aggregate supply.

    [Fully labelled AD/LRAS diagram showing both curves shifting to the right]

    Point 1: One supply side policy that can increase real output is spending on education and training. This means that the economy will have a more qualified workforce which in turn increases the productive capacity of the economy Firms will get employ from a more qualified workforce which means that they can raise production which in turn leads to lower prices. This means that in the long run consumption should increase. This is shown in my AD/AS diagram: Increased consumption shifts AD to the right while the increased educated workforce shifts LRAS to the right.

    Eval 1: However education and training take a very long time to take effect. Investing in education means the results will only be seen when the students/trainees finish their education and enter the labour force. Governments may be hesitant to invest in education and training as they're more like to have short term views (5 years). The current party in power is not guaranteed to be re-elected to see the results and will be less likely to invest. [ugh, I just realised I could have mentioned brain drain]

    Point 2: Another supply side policy which can increase real output is investment in health. Investing in health means that the population is more healthy as they'll have better access to hospitals and health professionals such as doctors and nurses. A healthy workforce is important as it means there's less staff absenteeism. This means that healthy workers will have days off due to sickness and so enable firms to produce more. The governments benefits from this as they'll receive more money from income tax which they can potentially reinvest. Investing in health is also good because it means that the government will have to employ more public sector workers (e.g: doctors and nurses). This can decrease unemployment and it's also worth noting that an increase in public sector workers leads to an increase in consumption which leads to positive multiplier effects for the economy. This again can be shown on my diagram as increase in AD and AS.

    Eval 2: However investing in health may not be a good idea as it incurs an opportunity cost. The money spent on health could have been spent on other things that could have also increased output. All of this spending could lead the government to a budget deficit where taxation is lower than government spending. The costs associated with healthcare are massive, for example: A medical student's education costs the government around £200000. Private health firms may also be "crowded out" due to increased spending on healthcare. For example: A private hospital will receive lots of competition from a new government funded hospital. [Talked about more stuff but I forgot...]

    For my 3rd point I talked about trade union reform in the same style as above. I cba to type more lol:
    Point 3: Less power for trade unions = Hindered ability for strikes = Less strikes = Less chance of infastructure being halted (e.g: London bus strikes) = Less staff absenteeism = Govt getting their money's worth (in wages) from their workers = OVERALL: increase in real output

    Eval 3: Very controversial = Piss workers off = Current party in power less likely to do it because they want to be re-elected.
    -------------------

    Hopefully you found that useful!
    Would I be penalised if i only shifted the supply curve to the right?
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    (Original post by badaman)
    'To what extent do demand side policies lead to conflicts between macroeconomic objectives' (30 marks)
    Or
    'To what extent do demand side policies conflict between the macroeconomic objectives of the economy?' (30 marks)

    The SAGA continues.
    It was 100% definitely NOT just WITH we can establish now.
    It does indeed. However, if it was 'conflict between the' then my rational 'with' was and is correct as these are two completely different questions. Also I could swear macroeconomic onjectives was not the end of the sentence. This would also prove both the point of not repeating questions and 'between'. Looks like the tables might just turn...
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    (Original post by excaliburnus)
    If you have time, rate my (question 2) 30 marker out of 30!

    --------------------------
    Supply side policies are macro-economic policies issued by the government to manipulate (long run) aggregate supply.

    [Fully labelled AD/LRAS diagram showing both curves shifting to the right]

    Point 1: One supply side policy that can increase real output is spending on education and training. This means that the economy will have a more qualified workforce which in turn increases the productive capacity of the economy Firms will get employ from a more qualified workforce which means that they can raise production which in turn leads to lower prices. This means that in the long run consumption should increase. This is shown in my AD/AS diagram: Increased consumption shifts AD to the right while the increased educated workforce shifts LRAS to the right.

    Eval 1: However education and training take a very long time to take effect. Investing in education means the results will only be seen when the students/trainees finish their education and enter the labour force. Governments may be hesitant to invest in education and training as they're more like to have short term views (5 years). The current party in power is not guaranteed to be re-elected to see the results and will be less likely to invest. [ugh, I just realised I could have mentioned brain drain]

    Point 2: Another supply side policy which can increase real output is investment in health. Investing in health means that the population is more healthy as they'll have better access to hospitals and health professionals such as doctors and nurses. A healthy workforce is important as it means there's less staff absenteeism. This means that healthy workers will have days off due to sickness and so enable firms to produce more. The governments benefits from this as they'll receive more money from income tax which they can potentially reinvest. Investing in health is also good because it means that the government will have to employ more public sector workers (e.g: doctors and nurses). This can decrease unemployment and it's also worth noting that an increase in public sector workers leads to an increase in consumption which leads to positive multiplier effects for the economy. This again can be shown on my diagram as increase in AD and AS.

    Eval 2: However investing in health may not be a good idea as it incurs an opportunity cost. The money spent on health could have been spent on other things that could have also increased output. All of this spending could lead the government to a budget deficit where taxation is lower than government spending. The costs associated with healthcare are massive, for example: A medical student's education costs the government around £200000. Private health firms may also be "crowded out" due to increased spending on healthcare. For example: A private hospital will receive lots of competition from a new government funded hospital. [Talked about more stuff but I forgot...]

    For my 3rd point I talked about trade union reform in the same style as above. I cba to type more lol:
    Point 3: Less power for trade unions = Hindered ability for strikes = Less strikes = Less chance of infastructure being halted (e.g: London bus strikes) = Less staff absenteeism = Govt getting their money's worth (in wages) from their workers = OVERALL: increase in real output

    Eval 3: Very controversial = Piss workers off = Current party in power less likely to do it because they want to be re-elected.
    -------------------

    Hopefully you found that useful!
    Difficult to guage what mark you would have got, i feel your first two points where very similar and are more fiscal policies rather than supply side, but they will affect supply on the long run so i guess your correct. If it is correct you probs got 23/24 i feel you needed that extra detail for your points.......you should have done 4 points to be safe.
    My points were decreasing NMW, Decreasing Government bureaucracy, decreasing cooperation tax, and privitisation, which are solid points for supply side.
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    (Original post by Darcy1)
    Would I be penalised if i only shifted the supply curve to the right?
    I don't think so. However, my teacher told us to shift AD as well as supply side policies usually effect AD as well (e.g: spending in health = more consumption due to more docs and nurses).
    If your answer mentions AD shifting then it's better to have your diagram show it as well.
    If your answer doesn't mention AD at all then it'll just be marked normally. AD shifts in your diagram just give you more to talk about.
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    (Original post by Darcy1)
    Would I be penalised if i only shifted the supply curve to the right?
    No .....definition of supply side policies are any action by policy makers to shift AS to the right, so no. The shifting in AD is unnecessary.
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    (Original post by TeddyBearMike)
    Difficult to guage what mark you would have got, i feel your first two points where very similar and are more fiscal policies rather than supply side, but they will affect supply on the long run so i guess your correct. If it is correct you probs got 23/24 i feel you needed that extra detail for your points.......you should have done 4 points to be safe.
    My points were decreasing NMW, Decreasing Government bureaucracy, decreasing cooperation tax, and privitisation, which are solid points for supply side.
    Hmm, personally I don't think I scored that low. Also the supply side policies I picked have a massive overlap with fiscal (which is why I showed AD shifting as well). That may be why..
    Thank you for your input!
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    (Original post by TeddyBearMike)
    Difficult to guage what mark you would have got, i feel your first two points where very similar and are more fiscal policies rather than supply side, but they will affect supply on the long run so i guess your correct. If it is correct you probs got 23/24 i feel you needed that extra detail for your points.......you should have done 4 points to be safe.
    My points were decreasing NMW, Decreasing Government bureaucracy, decreasing cooperation tax, and privitisation, which are solid points for supply side.
    What did you say about privitisation? I spoke about increasing spending on education, reducing unemployment benefits and privitisation. I even had enough time for a conclusion! But I think I messed up the 6 marker
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    For the 8 marker regarding the information considered by the MPC in setting interest rates, I wrote that they would consider growth figures & inflation rates. Would this be valid & if not, would I still get the marks for my thorough links to how this affects AD and therefore why it is important in setting interest rates?
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    was reducing trade union power a valid point in the last 30 marker?
    less pressure on wages, ect
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    Can someone please write out their 30 marker for q1!!!!????
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    (Original post by jeevanr21)
    For the 8 marker regarding the information considered by the MPC in setting interest rates, I wrote that they would consider growth figures & inflation rates. Would this be valid & if not, would I still get the marks for my thorough links to how this affects AD and therefore why it is important in setting interest rates?
    They are both decent points so yes I think you will get marks for them.
 
 
 
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