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To what extent is the EU a market economy? watch

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    I have a gut feeling this question is going to come up on Monday, so I'm just wondering, how would you structure your answer to this? What would you include? It's just such a wide question I don't know where to begin!
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    (Original post by fishpaste)
    I have a gut feeling this question is going to come up on Monday, so I'm just wondering, how would you structure your answer to this? What would you include? It's just such a wide question I don't know where to begin!
    in what exam? ocr econ in euro context? with the pre release about slovakia?
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    (Original post by amyitfc)
    in what exam? ocr econ in euro context? with the pre release about slovakia?
    yes
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    (Original post by fishpaste)
    I have a gut feeling this question is going to come up on Monday, so I'm just wondering, how would you structure your answer to this? What would you include? It's just such a wide question I don't know where to begin!
    is this for general studies? cos ive got module 6 on the EU... is there any geniuses out there who do geog or something? cos i know zilch abt this...
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    (Original post by *skye*)
    is this for general studies? cos ive got module 6 on the EU... is there any geniuses out there who do geog or something? cos i know zilch abt this...
    No it's the synoptic economics module of the OCR board.
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    People don't seem very willing to come up with ideas so I'll go through what I'd put and additions/criticisms would be appreciated.

    I assume this question is gonna be worth like 20 marks, so I would start by identifying the basic properties which make it a market economy. In general prices and output are determined by supply and demand, including all the common consumer goods, even draw a supply and demand diagram to show it. But then mention some of the consumer goods which aren't in free markets, cigarettes, petrol etc, and explain how the EU often uses taxes and other microeconomic intervention policies to adjust demand for these goods. Again, with a diagram.

    Then I would have a separate analysis of health, and education in Europe, perhaps trying to cite examples from the pre release material of Europe completely dictating the allocation of healthcare and education, with of course the exception of the private supply of these things.

    Then I would try and look at the wider markets, with the tariffs and protections which secure Europe, try and bring CAP into it, but I'm a little unsure here, if an economy has external protection against international trade, is it less of a free market, even if all the internal trade is dictated by the markets?

    Then I'd be a bit lost, so I really do need your help.
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    Come on guys help me out here.
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    (Original post by fishpaste)
    People don't seem very willing to come up with ideas so I'll go through what I'd put and additions/criticisms would be appreciated.

    I assume this question is gonna be worth like 20 marks, so I would start by identifying the basic properties which make it a market economy. In general prices and output are determined by supply and demand, including all the common consumer goods, even draw a supply and demand diagram to show it. But then mention some of the consumer goods which aren't in free markets, cigarettes, petrol etc, and explain how the EU often uses taxes and other microeconomic intervention policies to adjust demand for these goods. Again, with a diagram.

    Then I would have a separate analysis of health, and education in Europe, perhaps trying to cite examples from the pre release material of Europe completely dictating the allocation of healthcare and education, with of course the exception of the private supply of these things.

    Then I would try and look at the wider markets, with the tariffs and protections which secure Europe, try and bring CAP into it, but I'm a little unsure here, if an economy has external protection against international trade, is it less of a free market, even if all the internal trade is dictated by the markets?

    Then I'd be a bit lost, so I really do need your help.
    In your definition you have to mention that a true market economy is free of governmental influence and collusion. In the real world we all know that this is not possible, due to politics, etc, most countires in the EU have specific trade agreements. Sorry fishpaste, can't go into much more detail, I don't know anything about the pre-release of slovakia.
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    (Original post by fishpaste)
    I have a gut feeling this question is going to come up on Monday, so I'm just wondering, how would you structure your answer to this? What would you include? It's just such a wide question I don't know where to begin!
    Market economy, so operates as one market. You'll have to talk about the no tariff's between EU memebers, how they encourage free trade and the free movement of factors of production (esp labour).

    It suppose it's really asking you how the EU operate as a single economy. It's definitely a trading bloc at the moment.
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    Why not introduce the reliance upon countries outside of the EU, these multinational companies are making millions out of cheap labour/resources.
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    You could go to the basics, say that countries in the EU operate the price mechanism. But does the EU itself?
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    i would answer it by going through characteristics of market economy such as , ownership of the factor inputs, levels of competition, incentives to work hard because of the rewards which tied in with competition, the pricing system. Then you can say that the truly single market will have the law of one price i.e when higher price on one region can not be susutained if there is a lower price charged in the different region - so price transparency and how the integration and introduction of the euro increased price transparency .

    Then you may say that policies such as CAP go against against the principle of market system because they try to keep the price at one level thus preventing competition, they also prevent competition from external producers but putting tarrifs and levies which is also agianst the idea of free market system.

    That is probably how i would answer but im doing AQA so the style mite be different from your exam board.
 
 
 

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