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AQA A-level Economics new 7136 - 06, 13 & 19 Jun 2017 [Exam Discussion] Watch

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    (Original post by tamcat)
    I completely messed up realised I spoke about economic growth not development - how many marks do you think I will lose???Possible for me to get Atleast 15 marks??
    Hey you will be fine. Look at my points below, I did not mention development massively however my chains of reasoning always led to how that can increase development so if you have done that you should be fine.


    25 marker- defined the terms

    1st arg- quoted the source on how India were reliant on other countries etc. Did a paragraph on how the government should take control by implementing a tariff. This may make exports more competitive in the domestic economy leading to increase AD.

    evaluated- strong- export led multiplier if the marginal propensity to consume is high and thus development may increase economically by a large extent as incomes would rise.

    Weak- demand for imports may be inelastic and thus strategic and infant industries may not improve resulting in less development. Final judgement- don't use government approach as tariffs can lead to retaliation which may hinder development and used china and isa devaluation war as example of retaliation.

    2nd arg- market approaches best- free trade and liberalisation- increase movement of MNCs such as Nike. Provide job opportunities in countries like india- increase employment reduction natural rate of employment and larger development

    Diagram- increase supply labour and fall in voluntary unemployment

    strong- something from source

    weak- keynesiansm argues that the supply of labour may not result in higher employment in these areas if there is a lack of demand and thus keynesian demand side management as a method to improve development is best. Did diagram with fine tuned AD and opt gdp low inflation and max unemployment conclusion- supply side policies may be most effective and compared args etc plus LRAS shifting right
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    can you talk about inflation and exchange rate in the 15 marker on patterns of trade
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    (Original post by junky27)
    Comparative advantage from free trade meaning you may export more than another good such as UK with a comp advantage in financial services.

    Protectionism in the form of tariffs from other countries may affect the pattern of trade

    and the quality and price of goods
    Imisunderstood the q and wrote something completely different!

    I wrote about the UK more exporting services as opposed to goods - harder to improve the quality/ quantity of services - longer time

    U.K. Has relatively good wage rates - 11% increase of minimum wage to £7.20 - so there may be a trade difference compared to countries where wage rates are lower - lower costs of production

    I know I misunderstood the q and it was really bad - do u think i could still at least get 8/15 marks
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    (Original post by Sam10711)
    Defined market based strategies

    Talked about trade liberalisation and globalisation and why its good and bad

    Talked about privatisation being good for efficiency but might exploit consumers.

    Talked about maybe protectionism such as tariffs is useful for protecting domestic firms which may help growth more.

    How about you?
    How good do you think my points are?
    Oh god I did that question and I did not realize that was what it was asking
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    (Original post by amukaty)
    can you talk about inflation and exchange rate in the 15 marker on patterns of trade
    Yep both valid.
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    (Original post by Reaver Daniels)
    Does anyone remember the 'Exact' wording of the 15 mark for the current account question on patterns of trade?

    I spoke about the pattern of trade changing when we leave Europe due to a possible removal of the common external tariff, which would mean more trade with the rest of the world. Did loads of decent analysis on that and then did a smaller point about sunset industries e.g. Steel going under to the Chinese competition.


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    'Explain the changes in the UK's pattern of trade with the rest of the world'
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    (Original post by faatimahshiekh)
    Oh god I did that question and I did not realize that was what it was asking
    What did you talk about?
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    (Original post by Reaver Daniels)
    Are you sure?

    Posted from TSR Mobile
    I agree with this.
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    (Original post by CJEV18)
    So i talked about trade creation and how opening up markets (trade liberalisation) can lead to increased domestic production as india can exploit its comparative advantage in computer services. leading to more jobs etc...

    I talked about privatisation leading to efficiency and i shifted the lras curve to the right. And said how economic growth leads to higher living standards. I evaluated that using the extract which mentioned issues regarding infrastructure and 'doing business'.

    I the did a paragraph on protectionism with tariff diagram etc and said it should be used initially until indian companies can gain economies of scale then removed as other wise mnc's will exploit workers and profits will go overseas(also an issue with tax!)

    I concluded by saying that once infrastructure is successfully developed protectionism should be lifted and markets opened up, therefore indian people are better off as more money stays in the economy.

    I waffled so much and i dont think much of it was relevant tbh....
    Sounds good to me!
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    Hi! Reading through answers for context 2 I'm a bit nervous now! I started my 25 marks saying about How free market policies have increased rapidly since 1980's ans were the main use of policies by China, I said how it can increase competition and increase efficiency meaning they can exploit economics of scale. This also means more choice for consumers and more profit s etc.
    I then said about how free markets big policy is to secure investment which will help them develop as investment acts as a barrier to development, and how this seems to have worked due to the 222bullion investment

    I also said how the agricultural may be seen as a negative however this many economists see this as a needed stepping stone to thhe manufacturing industry which could help improve and access of greater profits as it will allow them to trade with developed countries who now have the CA in manufacturing.

    I then used the application of poor infrastructure to show that government may need to intervene first before opening up as investors may still be put off as poor healthcare etc. This means they could subsidise firms to increase transport roads to help attract exporters and investment to develop.

    I then said tariffs could be used which can Stop people buying imports and use domestic goods instead. However if this stops necessity goods being bought this can lower standards of living and also cause retaliation of a trade war.
    Doesn't this sound ok??
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    Hi everyone, I did context 2 and essay 2 today and would like to know if my 25 markers are okay or not.

    For the first one on monetary policy being the most effective method to reduce inflation, I first discussed what monetary policy is and explained its individual components of interest rates, the exchange rate and QE. I then explained how these policies could be used in away to increase AD and thus the price level in the economy, with examples. I then discussed the limitations of these policies in the UK and Japan with reference to examples and the liquidity trap, and why it may not be the most successful policy to use. I then discussed how other policies such as fiscal policy and supply-side policies could be used to reduce deflationary risks, and evaluated these policies. I concluded that a combination of these policies should be used, as although monetary policy can be successful, when it fails, a back up is needed to ensure that the deflationary risks are successfully mitigated.

    For the second one on ways to reduce the current account deficit in the UK I explained, analysed and evaluated the use of the policies of interest rates and the exchange rate to reduce the demand for imports, import tariffs and then export subsidies as protectionist policies. For interest rates I explained that they can be raised to reduce the demand and investment in the economy as there is a higher reward for saving, and this will reduce the demand for imports, however that this policy could be flawed as the demand for the currency is increased which may strengthen the pound and make imports cheaper and worsen the deficit. I then described how export subsidies could be used to help make exporting cheaper into foreign markets, and how this could lead to an export-led multiplier effect, and so help to reduce the deficit, however, the fact that this policy does not seek to reduce the level of imports may mean that it doesn't successfully reduce the deficit. I then spoke about how import tariffs could be used to make imports more expensive and deter people to buy domestic goods instead, and so help to reduce the deficit, however that this may be flawed as this could spark a trade war and other firms may then out tariffs on exporting into other countries, as well as the fact that the cross-elasticities of demand may not be reduced enough to mean people stop buying the imports instead if there is a strong brand loyalty. People will maximise their utility and so will continue to buy the imports if they want to even if they are more expensive. I concluded that the weaker pound following Brexit may be enough to help reduce the deficit as imports become more expensive, however, that a combination of these policies should be used in the long-run if the deficit is not reduced, overall.

    Do these sound vaguely ok and correct? Thanks.😊
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    do you guys reckon paper 3 will be based on financial markets?

    I'm unsure as I'm slightly confused how they would incorporate it into the context sections (iygwim)
    also there is the chance of everyone crashing and burning if they do base it around financial markets - so hopefully they won't!

    any thoughts?
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    The 15 marker for essay 2 was- What are the reasons for the UK having different patterns of trade with the rest of the world
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    (Original post by tamcat)
    do you guys reckon paper 3 will be based on financial markets?

    I'm unsure as I'm slightly confused how they would incorporate it into the context sections (iygwim)
    also there is the chance of everyone crashing and burning if they do base it around financial markets - so hopefully they won't!

    any thoughts?
    Yes, it's likely that there could be some multiple choice questions on it at least.
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    Think the exam pretty well other than defining deflation as disinflation. I even drew the correct diagram afterwards ffs! (Duh moment).

    For the tackling deflation 25 marker I wrote about how the UK and similar developed countries use inflation targeting in order to try to maintain price stability and avoid deflation (or higher than acceptable inflation). Said about how the government could lower interest rates in order to reduce the incentive for consumers and businesses to save and increase the incentive for them to spend and invest. AD = C+I+G+(X-M) therefore an increase in consumption and investment leads to an increase in AD (shown on diagram) which gives rise to higher economic growth, and more importantly in answering the question, a rise in the price level contributing towards avoiding deflation. Said about how this may not work, especially in countries such as the UK where there has recently been a financial crisis (quoted the extract) as people may be deleveraging and so low interest rates may not lead to increased consumption and investment. Quoted the extract again (something about low interest rates) and mentioned how when interest rates are already low, little can be done by the way of interest rates to stimulate the economy.
    Then I argued the case for fiscal policy in increasing AD to avoid deflation. Mentioned how reducing indirect taxes such as income tax would lead to more disposable income leading to an increase in consumption and a rise in AD -> therefore a rise in the price level to avoid deflation. However when people's incomes rise they may very likely spend their additional disposable income on imports and so this may not be an effective way of dealing with deflation.
    Then spoke about QE. Benefits and drawbacks.
    Then came to my concluding paragraph where I mentioned how supply side policies may also be useful by increasing the productive capacity of the economy, leading to lower unit costs and therefore the economy becomes for internationally competitive. This may be especially desirable given that UK productivity is so low. Concluded by saying that in some cases monetary policy would be ineffective and so should be used in conjunction with some fiscal and mainly supply side policies. Also mentioned how QE may be undesirable as over dependence of QE is not sustainable or good for the economy long term and so the governments of developed countries should seek to find other ways to boost demand that would be sustainable in the long run.
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    For the patterns of trade q I said:

    -Trade liberalisation
    -Trading Blocs
    -UKs shift from goods to services
    -Improvements in technology
    -Rise of MNCs

    Are these points valid?
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    (Original post by Reaver Daniels)
    I think it's possible, as you can chat about micro and macro effects.


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    you can????? :O how would you discuss micro effects?
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    (Original post by Holdsworth1)
    Hi everyone, I did context 2 and essay 2 today and would like to know if my 25 markers are okay or not.

    For the first one on monetary policy being the most effective method to reduce inflation, I first discussed what monetary policy is and explained its individual components of interest rates, the exchange rate and QE. I then explained how these policies could be used in away to increase AD and thus the price level in the economy, with examples. I then discussed the limitations of these policies in the UK and Japan with reference to examples and the liquidity trap, and why it may not be the most successful policy to use. I then discussed how other policies such as fiscal policy and supply-side policies could be used to reduce deflationary risks, and evaluated these policies. I concluded that a combination of these policies should be used, as although monetary policy can be successful, when it fails, a back up is needed to ensure that the deflationary risks are successfully mitigated.

    For the second one on ways to reduce the current account deficit in the UK I explained, analysed and evaluated the use of the policies of interest rates and the exchange rate to reduce the demand for imports, import tariffs and then export subsidies as protectionist policies. For interest rates I explained that they can be raised to reduce the demand and investment in the economy as there is a higher reward for saving, and this will reduce the demand for imports, however that this policy could be flawed as the demand for the currency is increased which may strengthen the pound and make imports cheaper and worsen the deficit. I then described how export subsidies could be used to help make exporting cheaper into foreign markets, and how this could lead to an export-led multiplier effect, and so help to reduce the deficit, however, the fact that this policy does not seek to reduce the level of imports may mean that it doesn't successfully reduce the deficit. I then spoke about how import tariffs could be used to make imports more expensive and deter people to buy domestic goods instead, and so help to reduce the deficit, however that this may be flawed as this could spark a trade war and other firms may then out tariffs on exporting into other countries, as well as the fact that the cross-elasticities of demand may not be reduced enough to mean people stop buying the imports instead if there is a strong brand loyalty. People will maximise their utility and so will continue to buy the imports if they want to even if they are more expensive. I concluded that the weaker pound following Brexit may be enough to help reduce the deficit as imports become more expensive, however, that a combination of these policies should be used in the long-run if the deficit is not reduced, overall.

    Do these sound vaguely ok and correct? Thanks.😊
    I did extract about India ( first one ) so I can't say about that one but for essay 2 about current account deficit I had the same points. I also talked about how Bank of England could fix or peg the exchange rate so British pound is weaker. This would make import more expensige so it should reduce deficit because people are rational and they should switch to domestic products. However if Marshall-Lerner condition is not meet then it will get worse and then explained that. But apart from that I had exactly the same points so I think we both good. 🏁😊
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    I think i did well on it all other than the 25 marker on context 1. ****ed that so badly, wished I did context 2 now
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    (Original post by hbaig27)
    For the patterns of trade q I said:

    -Trade liberalisation
    -Trading Blocs
    -UKs shift from goods to services
    -Improvements in technology
    -Rise of MNCs

    Are these points valid?
    Yes I think that would be fine. I talked about how comparative advantages may shift over time, collapse of the UK manufacturing industry into services, technological improvements, all that kind of stuff.
 
 
 
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