A2 OCR Economics F585 June 2016

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What did you write? ?

I mentioned how a depreciation would work and how it appeared to be successful in reducing the deficit over the five years- I probably should have mentioned the Marshall Lerner condition being satisfied but I didn't :/

And then I said how even though it appreciated in 2007 the deficit actually fell and this might have been due to the recession so lack of demand for imports.

You could have mentioned how the quality of their exports may have improved- but I didn't

There's so much more I feel like I should have said but I just get panicky in exams hence why I didn't

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Reply 681

SilverHorsey

Original post by Marshmallow21

The wording of the US current account deficit and exchange rate question confused me. I didn't understand what it was asking for.

trust me! thats one of the reasons im fumingggggggg

Reply 682

MrCoolVille

I got confused with the comparative advantage question. Mostly talked about absolute advantage but did mention how trade would be beneficial and analysed it. What do you think id get?

Reply 683

WillRose

USA current account question horrifically worded, was expecting to be asked why the depreciation didnt have the expected effect :s

still got in J curve and Marshall Lerner but not sure how applicable it was with what the question was asking

(edited 7 years ago)

Reply 684

Marshmallow21

Original post by Lostrider

What did you write? ?

I mentioned how a depreciation would work and how it appeared to be successful in reducing the deficit over the five years- I probably should have mentioned the Marshall Lerner condition being satisfied but I didn't :/

And then I said how even though it appreciated in 2007 the deficit actually fell and this might have been due to the recession so lack of demand for imports.

There's so much more I feel like I should have said but I just get panicky in exams hence why I didn't

Posted from TSR Mobile

I wrote the same for the first bit and then I mentioned that between 2009 and 2011 the current account depreciated but the current account actually worsened a bit - then said this might have been because of the J-curve effect and recession. I really don't think I answered it right though :frown:

Reply 685

SilverHorsey

Original post by MrCoolVille

I got confused with the comparative advantage question. Mostly talked about absolute advantage but did mention how trade would be beneficial and analysed it. What do you think id get?

why did u talk about absolute advantage?
what did u write about how trade would be beneficial?

Reply 686

SilverHorsey

Original post by WillRose

USA current account question horrifically worded, was expecting to be asked why the depreciation didnt have the expected effect :s

trust meeee! the examiners need sorting out its ridiculous you know like im like ask me the question none of this deciphering rubbish u know

Reply 687

haiderraider2

Original post by SilverHorsey

why did u talk about absolute advantage?
what did u write about how trade would be beneficial?

I wrote that a comparative advantage is exploited as world trade barriers are reduced. I drew the trade diagram
and then said prices fell from p to p1 due to lower labour costs in countries like china, as they exploit this comparative advantage there are benefits for the economy as consumer surplus increases and a greater quantity is consumed so consumer welfare is maximised.

As a second point, I talked about dynamic efficiency from increasing competition of comparative advantage. As specialisation and competition from trade leads to more R & D there can be greater product innovations from the developed economies such as the USA.
Hope your exam went well :smile:

Reply 688

WillRose

for comparative advantage in terms of an exporting country i talked about dynamic efficiency and economies of scale leading to lower unit costs, more competetive over seas ect

in term of imports, better quality than they could make them selves, higher standards of living as a result mor consumer choice ectt

Reply 689

MrCoolVille

What was the comparative advantage question?

Reply 690

YangSquared

can anyone remember the 2nd four marker question?

Reply 691

Realbigboi

For the comparitive advantage one there was a range of benefits. I spoke about how there was an increase in fiscal dividends for countries being able to exploit there comparative advantage and also exploitation can result in an increase in the aggregate demand with all the effects of that increase unemployment etc