rosemondtan
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Hey guys!

Thought I would start a thread for fellow comrades to rant/ discuss/ cry about the upcoming unit 2 paper!!

The unit 1 paper on the 16th was horrible, but hey ho, we've got one more paper to go before we're done with AS economics! So press on, keep studying and we'll emerge stronger than before (nothing is impossible after that unit 1 paper)

If anyone has any resources, feel free to post it on this thread (because sharing is caring) I'm too lazy to post any resources here but yeah you have your usual:

1. Technocrat notes
2. Uplearn
3. Tutor2u
4. Investopedia
5. economicshelp.org
6. Physics and Maths Tutor

Have fun and study hard guys!
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Beccatenney
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i hate unit 2
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Diastal
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What's the best way of answering the questions? I usually start from section B and then I usually end up with having about 10-15mins on section A. Does anyone have a better way of going through the exam?
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bulletman54
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yeah has anyone got a guide on exam technique or any other resources for unit 2 can you send it to me [email protected]
thanks
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rosemondtan
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(Original post by Diastal)
What's the best way of answering the questions? I usually start from section B and then I usually end up with having about 10-15mins on section A. Does anyone have a better way of going through the exam?
My teacher doesn't recommend that, but I guess the key is to train your writing speed until you have a lithium arm!
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Diastal
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(Original post by rosemondtan;[url="tel:64963541")
64963541[/url]]My teacher doesn't recommend that, but I guess the key is to train your writing speed until you have a lithium arm!
What does your teacher recommend? Because my teacher tells me to start from the 20mark question but I don't like starting like that
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Dennizun_win
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(Original post by Diastal)
What does your teacher recommend? Because my teacher tells me to start from the 20mark question but I don't like starting like that
Work through it from the start to the finish. Spend 15 minutes on Section A to get you warmed up and then 75 minutes on Section B
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brickbybrick
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Does anyone have adapted papers like there were for unit 1?
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lilydavison6
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guys what was newly added to unit 2 on the spec this year coz no doubt that will be the 20 mark question or at least on the paper, like the they did for unit 1
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Diastal
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(Original post by lilydavison6)
guys what was newly added to unit 2 on the spec this year coz no doubt that will be the 20 mark question or at least on the paper, like the they did for unit 1
Check the new 2015 spec. Pretty much all of my economic teachers believe that the 20marker will be on policies to achieve macroeconomic objectives, so about fiscal and monetary as well as supply side policies. And there's a high chance of conflict between objectives coming up as well.
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Haamoo7
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(Original post by Diastal)
Check the new 2015 spec. Pretty much all of my economic teachers believe that the 20marker will be on policies to achieve macroeconomic objectives, so about fiscal and monetary as well as supply side policies. And there's a high chance of conflict between objectives coming up as well.
Yeah my teachers said the same. All the new things on the spec are pretty small additions, and will probably be prevalent in section A of the paper.
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Princess220
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Does anyone have a list of keywords that we need to know? Or a website that has them.. I hope macrobjective conflict comes up :yes:
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harryleavey
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(Original post by lilydavison6)
guys what was newly added to unit 2 on the spec this year coz no doubt that will be the 20 mark question or at least on the paper, like the they did for unit 1
Multiplier calculations are new. Most likely section A though
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_chloe_abigail_
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(Original post by lilydavison6)
guys what was newly added to unit 2 on the spec this year coz no doubt that will be the 20 mark question or at least on the paper, like the they did for unit 1
I know the multiplier was added so my teacher thinks that might be a 4 mark calculation question
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harryleavey
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(Original post by lilydavison6)
guys what was newly added to unit 2 on the spec this year coz no doubt that will be the 20 mark question or at least on the paper, like the they did for unit 1
Animal spirits (Keynesian Theory)
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lilydavison6
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ah perfect thanks guys and yeh a good place for revision is physics and maths tutors notes theres amazing
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Hot&SpicyChicken
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Can someone please explain to me how trade union powers is a supply side policies?Thanks, please rep and follow me!
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harryleavey
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(Original post by Hot&SpicyChicken)
Can someone please explain to me how trade union powers is a supply side policies?Thanks, please rep and follow me!
Reducing trade union power is the supply side policy.

Supply side policies may either be market based, or interventionist.

In this case reducing trade union power is a market-based approach, as it aims to increase efficiency of the free market and reduces intervention of the government.

The way it aims to increase supply: (I am assuming you know what trade unions are?)
  • If the power of trade unions is reduced, workers have less ability to bargain for higher wages
  • This means that firms do not have to pay as higher wages
  • Wages are a cost of production
  • If cost of production falls, AS increases
  • ALSO: if power of trade unions is reduced, less working days are lost through strike action (you may remember the recent sixth form college strike: did you get a day off? Your day off meant that you were not learning, and so were not contributing to the output of the economy - Yes, I know quite far fetched - but in the 1970s, a significant number of days were lost which had a significant impact on the producitivity of the economy)
  • If less working days are lost, then productivity and output of the economy increases, therfore increasing AS
  • Therefore, reducing trade union power has increased AS and has been effective as a supply side policy.
However (Evaluation):
  • It may be evaluated that reducing power of trade unions is difficult nowadays, because much of the work was done in the 1980s (Maggie Thatcher). There is only so much reduction in trade union power that can be achieved
  • Also, if trade unions are abolished, working conditions may worsen. This may cause workers to protest in other ways e.g not working hard. Therefore there may be unintended effects which actually worsen productivity, and cause AS to shift left.
  • It can also be evaluated that other policies may be conflicting i.e reducing trade union power means that living standards fall, may worsen income distribution too
I hope this helped. If you are still stuck, take a look at some of the flashcards I made on supply-side policies (and fiscal + monetary policies) here: https://s.tudy.it/jjoxb
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BadundeBrian
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Anyone have any idea how to answer this difficult 20 mark question:
"Discuss what factors may influence the Monetary Policy Committee when trying to achieve their inflation target (20)"
I understand how the MPC determines the interest rate base rate and how this can help reach the 2% inflation target (higher interest rates mean less consumption so can relieve inflationary pressures/lower interest rates means the economy can reflate due to increases in AD as credit is accquired cheaper etc.) but dont know what your two main points would be and how you would eval these?
Thanks.
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harryleavey
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(Original post by BadundeBrian)
Anyone have any idea how to answer this difficult 20 mark question:
"Discuss what factors may influence the Monetary Policy Committee when trying to achieve their inflation target (20)"
I understand how the MPC determines the interest rate base rate and how this can help reach the 2% inflation target (higher interest rates mean less consumption so can relieve inflationary pressures/lower interest rates means the economy can reflate due to increases in AD as credit is accquired cheaper etc.) but dont know what your two main points would be and how you would eval these?
Thanks.
Ok, so monetary policy is not the only factor that influences inflation.
I would approach this by considering other factors which would counteract/reduce the impact of monetary policy on inflation.

Ideas:
  • Fiscal Policy: Even if interest rates are low, but government taxation is high, consumption & investment are unlikely to rise significantly. Therefore the low interest rates may not stimulate inflation.
  • Evaluation: however, it can be said that taxes may affect AS more soc than than AD as it affects production costs (despite being demand side).
  • Consumer and Firms' Confidence: depending on the state of the economy, confidence can be affected. For example in the 2008 crisis, monetary policy through interest rates was largely ineffective due to low confidence (leading to the introduction of QE). If consumer confidence is low, they are unlikely to consume, despite low interest rates. In this case the inflation target may not be achieved. Similar point can be made with regard to firms' investment.
  • Evaluation: Although consumer and firms' confidence may influence the MPC's inflation target, this is only likely during a largescale economic down turn. In fact, interest rates are an important factor which actually affects confidence.
  • Long Run vs Short Run: It is suggested that monetary policy takes 12-18 months to take effect (See Mark Carney's May 2016 open letter to Mr Osbourne page 4). Therefore timing lags would affect the MPC decision and effectiveness of monetary policy in the short run.
  • Base rates may not correspond to lower interest rates for consumers and firms: Even if the Bank of England sets a low base rate, making it cheaper for High Street Banks to borrow, these High Street Banks may not reduce their own interest rates. This may be because they are recovering their own financial health, so are not willing lower their interest rates. In this instance, low base rate would not stimulate AD, and inflation target of 2% (+/- 1).
I think this would be appropriate to answer this question
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