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    (Original post by corey)
    Yeah my teacher said that last year the housing market paper was a joke.

    ANyway, just had a quick look at that question on consumer spending, i'll do it properly tomorrow - planning to do 6 micro and 6 macro part c)'s 2moro, so i'll post them all.

    So...I would look at consumer expenditure as a component of aggregate demand that contributes to over 50% of it, so the growth of consumer expenditure could result in a 'boom' for the economy - but possible risk of inflation blah blah (easy stuff).

    I would also look at how the growth in consumer expenditure is unbalanced toward Durable Goods, which could indicate a problem within the economy, because durable goods tend to be more expensive so we may see a rising debt level (very relevant with today's total debt over a billion or something).

    Durable goods are likely to come from abroad, and we have not seen a recovery of the manufactoring sector - again indicating that the growth is coming from outside imports to the UK, maintaining that the manufactoring sector is in a sturctual decline it cannot get out of. I would also mention that because growth is mostly likely focused in imported durable goods that this may act as a 'release' valve for any inflationary pressure.

    Erm...probably something to say about unemployment also since its mentioned in the data...I'll do this question properly 2moro

    gd stuff cheers
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    (Original post by corey)
    Yeah my teacher said that last year the housing market paper was a joke.
    yeh it was- i did not revision and didn't actually finish the essay (was clsoe tho) and got 87/90 on that paper.

    lou xxx
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    does anyone know what it means by 'the world's pollution problem will become so acute as to prevent the planets ability to self-clean'? what is self-cleaning?
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    (Original post by TheWolf)
    does anyone know what it means by 'the world's pollution problem will become so acute as to prevent the planets ability to self-clean'? what is self-cleaning?
    The ability of the planet to rectify its pollution problem, I think.

    This reminds me of a similar concept, the potential problem that we might be cutting down so many trees that the rate at which we do so will outstrip the rate at which we grow more, so that we will end up losing trees. Hope that helped you visualise the "self-cleaning" thing better.
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    (Original post by TheWolf)
    does anyone know what it means by 'the world's pollution problem will become so acute as to prevent the planets ability to self-clean'? what is self-cleaning?
    self cleaning is like the monitoring of the earth's own gases- eg, carbon dioxide removed by trees and oxygen produced to keep the level of gases constant. presumably there is a system for this on all planets.

    lou xxx
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    (Original post by lou p lou)
    self cleaning is like the monitoring of the earth's own gases- eg, carbon dioxide removed by trees and oxygen produced to keep the level of gases constant. presumably there is a system for this on all planets.

    lou xxx
    I think the difference is that other planets don't pollute? I'm no astronomer though...

    Doing ECN1 and ECN3 on Monday. I decided to do the sport and leisure question despite being taught the housing and environment bits, and I rightly flopped. So I hope to pick up big marks and then I'll have to cane ECN5 on the 28th.
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    (Original post by ZJuwelH)
    I think the difference is that other planets don't pollute? I'm no astronomer though...

    Doing ECN1 and ECN3 on Monday. I decided to do the sport and leisure question despite being taught the housing and environment bits, and I rightly flopped. So I hope to pick up big marks and then I'll have to cane ECN5 on the 28th.
    wow youre retaking it in june? btw can you retake both in november and in january and in june? :rolleyes: just wondering
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    (Original post by TheWolf)
    wow youre retaking it in june? btw can you retake both in november and in january and in june? :rolleyes: just wondering
    November is only for maths AS resits.

    I did ECN1 last January, got 82/105, trying to polish up the extra available marks. Did ECN3 in June as I said, and ECN2. And now I'm retaking both, and doing ECN5. I'm the only member oof my class who opted not to resit ECN6 which we did this January, a major flop for the whole class it has to be said.
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    Does anyone know which paper this is from? i cant find the mark scheme :confused: it has these questions:

    a Using extract c, compare economic growth in th emajor economies of the world for the period 1998-2003

    b Explain the possible effets on the UK economy of strengthening aggregate demand

    c. Using the data and your economic knowledge, evaluate the importance of supply side policies to the achievement of higher economicc growth in countries such as UK
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    (Original post by TheWolf)
    Does anyone know which paper this is from? i cant find the mark scheme :confused: it has these questions:

    a Using extract c, compare economic growth in th emajor economies of the world for the period 1998-2003

    b Explain the possible effets on the UK economy of strengthening aggregate demand

    c. Using the data and your economic knowledge, evaluate the importance of supply side policies to the achievement of higher economicc growth in countries such as UK
    For b should i draw the short run ad and as, and show that an increase in demand will cause ddemand pull inflation. Then i draw the long run aggregate supply, and show that an increase in demand will decrease unemployment. and that in the long run, whether there is inflation or not when there is an increase in demand depends where on the long run aggregate supply the economy is at, as if there is alot of unemployment, an increase in demand wont cause any inflation....etc and when there is little unemployment, a shift in demand curve will cause inflation....etc?
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    (Original post by TheWolf)
    something ive written - abit out of time, + need to add a few diagrams too, and a conclusion...what else could i have written?

    Firstly, it is important that Tobacco is classified as a demerit good as it is overprovided by the market mechanism, and provides negative externalities

    Let us first have a look at the External and social costs of tobacco consumption.
    Social costs of tobacco consumption is the deterioration of the smoker’s health. Through increasing the tax on tobacco, the smoker could be put off by the increase in price, hence stops smoking, which leads to an improvement of the smoker’s health and life expectation, and hence quality of life. On the other hand, external costs out numbers social costs. Firstly, the increase in the price of cigarettes could well increase crime rates as smokers or need to find more money to buy the cigarettes. This is assuming that their price elasticity of demand is relatively inelastic ie. An increase of price after an increase in taxation results in a relatively small decrease in demand.

    After taxation of cigarettes, health spending by the government on NHS should decrease as a result of an increase of quitting smokers. This means that the government can spend more on improving other areas of the society. However, due to the fact that the price elasticity of demand of cigarettes is so low, it is unlikely that there will be huge reductions of government spending on the NHS. Furthermore, in fact, it has been suggested that an increase in taxation could cause greater health spending, mainly because as the smokers who have now quitted smoking, now have a longer life expectancy, and hence the NHS have to care for them longer.

    Furthermore, other positive externalities have been created through taxation through sustaining human economic resources, which would have been destroyed if the taxations were not enforced.

    There are other disadvantages that could counteract the advantages of a taxation on cigarettes. Firstly, a taxation on cigarettes would create market failure esp the creation inequality, as this increase of price would have a bigger impact on the poor than the rich. This creates allocative inefficiency. Furthermore, the effect on jobs in the tobacco and retailing industries could be crippled by this new tax, as the demand for the goods decrease. This causes unemployment, which in turn causes a vicious cycle as the unemployed have to reduce their spending, which means an overall smaller demand for goods, so shops have lower profits, which in turn, cannot afford to lay off staffs. Furthermore, due to the high price, there could well be black markets and an increase in imports, which would further worsen the domestic market and macroeconomy. Therefore by increasing taxation, government failure could play its part, ie Market distortion, where the government intervention to correct the market failure leads to a creation of far more serious market failures, such as the destruction of the retailing industry, and the increase in unemployment as shown above.
    Bon, from what I have absorbed of it! Don't forget to add in a pigouvian tax diagram.
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    (Original post by Mysticmin)
    Bon, from what I have absorbed of it! Don't forget to add in a pigouvian tax diagram.
    pigouvian tax diagram :confused:
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    (Original post by TheWolf)
    pigouvian tax diagram :confused:
    ah sorry, I'm a different syllabus to you, must not confuse you. It's a diagram showing a tax levied onto the supply of a product, and it's value is equal to the negative externalities produced by the product e.g. steel production. Thus it decreases supply and demand to an optimal level for society.
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    (Original post by Mysticmin)
    ah sorry, I'm a different syllabus to you, must not confuse you. It's a diagram showing a tax levied onto the supply of a product, and it's value is equal to the negative externalities produced by the product e.g. steel production. Thus it decreases supply and demand to an optimal level for society.
    ahh i know this one yea ill draw that
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    (Original post by TheWolf)
    Does anyone know which paper this is from? i cant find the mark scheme :confused: it has these questions:

    a Using extract c, compare economic growth in th emajor economies of the world for the period 1998-2003

    b Explain the possible effets on the UK economy of strengthening aggregate demand

    c. Using the data and your economic knowledge, evaluate the importance of supply side policies to the achievement of higher economicc growth in countries such as UK
    so mysticmin how would you approach b?


    For b should i draw the short run ad and as, and show that an increase in demand will cause ddemand pull inflation. Then i draw the long run aggregate supply, and show that an increase in demand will decrease unemployment. and that in the long run, whether there is inflation or not when there is an increase in demand depends where on the long run aggregate supply the economy is at, as if there is alot of unemployment, an increase in demand wont cause any inflation....etc and when there is little unemployment, a shift in demand curve will cause inflation....etc?
    thanks
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    (Original post by TheWolf)
    so mysticmin how would you approach b?




    thanks
    Yup, that's right, L/R AD and AS and S/R effects of increasing AD when AS is approaching it's limit. Mention that there's a time lag between implementing policies for improved AD (up to 18 months), so governments who do use fiscal policy to control the economy may misjudge the effects of their policies (i.e. resulting in high inflation).

    If an economy is in a liquidity trap (e.g. japan, long periods of falling real interest rates) then AD policies don't tend to work. People expect prices to fall even further and so don't spend, at one point the government practically gave out money to try to increase spending in the economy.

    Oh, Balance of payments as well. As people's incomes improve, the marginal propensity to import goes up so the UK's balance of payments (current account to be precise) will deteriorate. Strengthening economy may also attract more foreign direct investment. The value of the pound will decrease as people spend more money abroad though, so UK goods become more competitive in the export market.
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    (Original post by Mysticmin)
    Yup, that's right, L/R AD and AS and S/R effects of increasing AD when AS is approaching it's limit. Mention that there's a time lag between implementing policies for improved AD (up to 18 months), so governments who do use fiscal policy to control the economy may misjudge the effects of their policies (i.e. resulting in high inflation).

    If an economy is in a liquidity trap (e.g. japan, long periods of falling real interest rates) then AD policies don't tend to work. People expect prices to fall even further and so don't spend, at one point the government practically gave out money to try to increase spending in the economy.

    Oh, Balance of payments as well. As people's incomes improve, the marginal propensity to import goes up so the UK's balance of payments (current account to be precise) will deteriorate. Strengthening economy may also attract more foreign direct investment. The value of the pound will decrease as people spend more money abroad though, so UK goods become more competitive in the export market.
    superb - thanks again
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    (Original post by TheWolf)
    superb - thanks again
    No prob, I must revise for my economics exams...they're on wed! So this counts as my revision
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    oh what do you mean by marginal propensity to import?
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    (Original post by TheWolf)
    oh what do you mean by marginal propensity to import?
    The proportion of your income that you spend on imports. As your income increases, you tend to spend more on imported, luxury, income elastic goods. You won't if your income is low as most of your spending will be autonomous.
 
 
 
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