WJEC Economics

Ahhh, that raises something I'm not 100% about - MV/PT. Does it just mean that say there was a rise in interest rates, the amount of money that is loaned out and used for credit obviously falls as it becomes more expensive, thus reducing the price and value of money itself, thus lowering inflation.

Reply 22

The equation is:

MV=PT

M is the money supply, V is velocity of money, P is prices, T is number of transactions.

V and T are always constant in the equation so basically if M increases so does P (inflation). An increase in the money supply leads to inflation. If interest rates are raised, the incentive to borrow is reduced as the opportunity cost of spending is now greater. Therefore, the money supply should be reduced as people stop borrowing and if M reduces so does P and inflation is reduced.

Reply 23

Thanks for that! :smile:

Any areas that your not too sure on or need help on?

Reply 24

Yer thanks umm I'm not really sure what we need to learn for features of UK/EU competition policy or what we exactly need to know for the Balance of Payments?

Thanks

Reply 25

UK/EU competition policy

For that I think that we just need to look that how they regulate markets. Take for example a firm that has a monopoly. If they are not operating in society's benefit, they may increase public awareness of a firms monopoly position so that the monopoly will change its policy and say start operating at a more efficient level, i.e. by offering lower prices and increasing output. They may also set maximum levels of market share firms can have, so that new entrants can enter the market to increase competition, productivity and benefit consumers. They also make sure that safety and work conditions are high, as well as making sure that the products and services offered are at a high quality. Finally, more in terms of EU competition policy, it investigates and attempts to prevent state-aid to firms which is seen as uncompetitive and given firms an unfair advantage.

Balance of Payments

Just basically looking at what it is, i.e. difference between exports/imports. How can Balance of Payments be improved, i.e. low-valued exchange rate which makes goods cheaper and more desirable in export markets and lower inflation compared to other nations (lower costs) and what may make it worse, i.e. lowering of tariffs of foreign goods/higher wage costs in the domestic market.

Reply 26

Hey doogie any help on why or why not a trade deficit matters and same for surplus?

Cheers

Reply 27

Did the Competition stuff make sense btw?

As for Trade Deficit and Surplus:-

Deficit:- Nation imports (buys more) than it exports (sells).

Negative:-

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Possible loss of jobs and lower tax revenue.

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International Competitiveness falls as less output in certain industry, so less profit for R&D

•

Reduces the strength of currency

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Domestic growth falls - lower living standards

Positive:-

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Increases social welfare

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Keeps inflation low

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Money earned by foreign nations re-invested in form of bonds and shares, allowing for investment and higher productivity - benefiting deficit nation.

•

Nations concentrate more on what they are good at producing

Reply 28

How did everybody find EC4 and EC5?

Reply 29

EC 4 = 7/10...but seemed alright, could have been worse. Pushed for time in the last question, did question two Only one person sitting the exam did question one.

EC5 = 8/10.. went well but once again, time a bit of an issue.

There didn't seem to be much in the way of Economic stuff and seemed quite general, i.e. could include elements of Geography in some parts of the questions. Overall though I'm quite pleased.. but then.. again.. who knows lol

Everyone else?

Reply 30

Do either of you have any recent EC6 papers that you'd be willing to upload?
I have the summer 2005 paper, but I dont feel thats enough

Thanks

Reply 31

DWKing uploaded some EC questions in a previous post, containg all the questions included in EC6 from the last few exams. :smile:

How did you find EC4 & EC5?

Reply 32

Oh right thanks, I'll look for them in a moment

I found EC4 pretty easy and EC5 i'm really not sure about :tongue:

Generally it wasn't too difficult, but I found that I didn't have enough to say for part B and didn't finish C due to time constraints!

Reply 33

I felt i was really constricted on time in part c on EC5 aswell. I thought there was far too much data and quetion c wasnt essentially economics. I didnt like EC4 a lot harder than previous years and why does oil always come up and its not even on the syllabus.

Reply 34

I thought there was far too much data and quetion c wasnt essentially economics

That seemed to be the general consensus with my class too. Not enough application of Economic theory. It was such a broad/vague question, you really could've written a thesis on it :biggrin:

Reply 35

Hey just wondering how much you guys write for an EC6 question? Like on a typical A4 pad how many sides would you write for a question?

Cheers

Reply 36

I always type up my answers. On Word, they're normally about 2-2.5 pages long I guess. Don't forget, its quantity rather than quality!

Reply 37

So how did EC6 go for you guys?

I'm somewhat undecided about how my result will look. Due to my timetable and my lazyness, I only learnt part of the course in detail. So I always had an idea of what questions I would go for in the exam, 2 macro and 1 trade or vice versa.

I did 3,4 & 5

I didn't think it was a horrible paper, but based on what they've asked before I thought the questions that came up were a little less direct regarding the macro side. Trade was fine. I finished with 15 minutes to spare, which was disconcerting since I nearly always write up until the end in essay based subjects

On a side note, I thought the Business/Micro questions were fairly straightforward, at a glance, but didnt know enough on Oligopolies to answer. Question 1 just looked like pure AS work, i'd have struggled writing a 20 mark answer.

Reply 38