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    (Original post by TheWolf)
    corey do we need to know about exchange rate policy?
    As in using it as a monetary policy tool? If so, no.
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    (Original post by corey)
    www.tutor2u.com !
    Ooo I was right on the comparative advantage, they don't have notes on absolute though.
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    (Original post by Ellie4)
    Ooo I was right on the comparative advantage, they don't have notes on absolute though.
    I'm having to drag up my GCSE knowledge here...but I think absolute advantage would be where France say can make coats much cheaper than england, and england can make handbags much cheaper then france. Thus, we both have absolute advantage in these goods repsectivly - so England only produces handbags and France only produces coats and we trade.
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    What do regulations do to the D/S diagram :confused:
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    (Original post by corey)
    I'm having to drag up my GCSE knowledge here...but I think absolute advantage would be where France say can make coats much cheaper than england, and england can make handbags much cheaper then france. Thus, we both have absolute advantage in these goods repsectivly - so England only produces handbags and France only produces coats and we trade.
    Specialisation of labour requiring an exchange medium (to trade). :cool:

    (Original post by corey)
    What do regulations do to the D/S diagram :confused:
    Depends on the relugation I guess...
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    (Original post by corey)
    What do regulations do to the D/S diagram :confused:
    leftward shift of supply, hmm i know that one of the supply side policies is deregulation, and that causes a rightward shift of lras, but depends what you mean - regulations as a government policy to reduce pollution? i would do another one
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    (Original post by mik1a)
    Specialisation of labour requiring an exchange medium (to trade). :cool:



    Depends on the relugation I guess...
    Hmm..I have list saying the effects of regulations on the D/S diagram...I think it means such as tighter controls and 'red tape' etc....but how does that effect D/S? Shift supply left?

    oooo...specialisation of labour! I think that it might come up 2moro...or an inter relationship between markets question!
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    (Original post by corey)

    oooo...specialisation of labour! I think that it might come up 2moro...or an inter relationship between markets question!
    lets hope so, easy demand and supply graphs are always good
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    (Original post by TheWolf)
    lets hope so, easy demand and supply graphs are always good
    Well, it hasn't been on for years! (I think).

    I was just thinking...is demand pull inflation self correcting?
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    (Original post by corey)
    Well, it hasn't been on for years! (I think).

    I was just thinking...is demand pull inflation self correcting?
    increase of demand, means more monetary incentives for workers to sustain the high demand, which puts on to the price hence inflation....mmmm how is it self correcting?
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    (Original post by TheWolf)
    increase of demand, means more monetary incentives for workers to sustain the high demand, which puts on to the price hence inflation....mmmm how is it self correcting?
    High AD means that demand causes a price rise...therefore movement along SRAS - and price serves as a incentive for more firms to enter the market...causing SRAS to shift right...thus lower price again... :confused:
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    (Original post by corey)
    High AD means that demand causes a price rise...therefore movement along SRAS - and price serves as a incentive for more firms to enter the market...causing SRAS to shift right...thus lower price again... :confused:
    I suppose it's self correcting where there a few/no barriers to entry in which case.
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    (Original post by corey)
    High AD means that demand causes a price rise...therefore movement along SRAS - and price serves as a incentive for more firms to enter the market...causing SRAS to shift right...thus lower price again... :confused:
    nah i wont bother saying that mself, this reminds me of the perfect market, where when a firm gets supernormal profits, this encourages firms to come in, and in the end they all get normal profits...but i wouldnt say that for other markets..
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    (Original post by deianra)
    Ellie, we just call it plain old AD/AS, yes?

    None of this SR/LR stuff? I have it on some of my notes, but only like 2 pages? :confused:
    Yeah don't worry about these AQA silly peeps, they don't even have to learn absolute and comparative advantage til next year! :rolleyes:
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    (Original post by Ellie4)
    Yeah don't worry about these AQA silly peeps, they don't even have to learn absolute and comparative advantage til next year! :rolleyes:
    Ah, but we had to learn absoulte advantage at GCSE so
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    (Original post by corey)
    Ah, but we had to learn absoulte advantage at GCSE so
    Go away!
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    Well demand pull inflation is from the Keynesian school of thought, because monetarists believe inflation only comes from the money supply. So to use a monetarist diagram to analyse it might give you problems?! lol...

    However, A rise in AD, causing a positive output gap due to extension in SRAS is unsustainable, workers charge higher wages and SRAS falls back to the long run trend rate. It is self correcting because demand-side inflation is short term.
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    (Original post by deianra)
    Heh, though to be honest comparative + absolute advantage is possibly the easiest thing ever. Although, I did help out a potential PPEist doing A2s with comparative advantage!

    lol
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    (Original post by mik1a)
    Well demand pull inflation is from the Keynesian school of thought, because monetarists believe inflation only comes from the money supply. So to use a monetarist diagram to analyse it might give you problems?! lol...

    However, A rise in AD, causing a positive output gap due to extension in SRAS is unsustainable, workers charge higher wages and SRAS falls back to the long run trend rate. It is self correcting because demand-side inflation is short term.
    Don't start confusing me...I only know one diagram
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    (Original post by corey)
    Don't start confusing me...I only know one diagram
    mik1a's one is the short run aggregate supply and long run aggregate supply with a demand curve, its a classical model i think
 
 
 

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