New Year 12 2013-14 Economics Homework

Welcome

When looking back 81% of Economics graduates said YES they would study Economics again. Here are some links that might help motivate you:
Why Study Economics website
Interviews with students

https://www.khanacademy.org/science/microeconomics/supply-demand-equilibrium/economics-introduction/v/introduction-to-economics

For a thought-stimulating introduction to Economics look at the following:

https://www.khanacademy.org/science/microeconomics/supply-demand-equilibrium/economics-introduction/v/introduction-to-economics

Following your pre sixth lessons we would like you to complete as homework over the summer holidays the following tasks, due to be handed in first day back:

ECON 1 - Write up a report explaining the main reasons why the price of oil has fluctuated in recent years and what you expect it to do next?

ECON 2 - Write a news article on: "Using the four macro-indicators discuss the current performance of the UK Economy?"

For both pieces of work try to avoid normative (opinion based judgements) and instead use positive economics referring to research you have used, economic theories you might have discovered and economics data.

Please feel free to comment - ask for additional help.

Development Project: Which countries to choose?

Which three countries to choose?

Familiarise yourself with some of the data, discuss the results and improve your awareness and enthusiasm as a basis for investigating these countries in more depth.

Play TOP TRUMPS:

http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-development-indicators-top-trumps

Choose one or two NIC's:
http://www.goldmansachs.com/our-thinking/archive/archive-pdfs/brics-book/brics-chap-13.pdf
http://blogs.wsj.com/privateequity/2013/05/15/beyond-bric-the-next-breakout-stars-of-emerging-markets/

Choose one or two LEDC's:
http://en.wikipedia.org/wiki/Least_developed_country


Mr Gray

Development Project

Why are we doing this project?

Economic Development is an essential part of your Unit 4 exam and we are advised to send at least 12 hours of class time on this. You will not be required to recall numerical information or specific knowledge of individual countries studies in your project for the exam but an understanding of economic development issues through in-depth research of case studies is strongly recommended by the exam board:

Reason for Project:  “Students would benefit from using case studies as a means of illustrating the constraints facing different economies and reasons for their different growth rates.”

(exam guidance)

This is why you are doing this report and will be expected to submit your findings by the deadline to continue with your A2 studies in the next academic year.

What happened to the Bank of England competition?

We are still doing it and will start the process of selecting a team of four in September.

Can I win anything for doing this project?

If you are fast enough there is an essay competition running with a £1,000 prize. For the project we are completing we recommend you answer the following question (max 2,000 words):

Should the experience of China silence those who think that democracy is good for growth?

There are five other alternative essay titles you may wish to choose instead and get feedback from me before submitting. For more information go to: http://www.res.org.uk/view/essayEduTraining.html

What are the deadlines for this project?

Please submit work according to the deadlines and expect feedback that will help ensure your work is of most use to you for the exams. You will be expected to re-do work where it is insufficient in analysis and evaluation (using skills developed at AS level).

Week ending

21 June – Homework AS feedback plus Tasks 1 and 2

28 June – tasks 3 and 4

5 July – tasks 5 and 6

12 July – tasks 7 and 8 – Final submission

19 July – Projects marked and final feedback.

TASKS

Before you start this project it is very important that you do not lose sight of the knowledge and skills you picked up at AS Level. Please bring in your folders to sort through in lessons and identify one or a few pieces of work that you had marked and where the feedback was most useful. This will be stored by myself in a central folder and will shape your exam skills target for this project. As you will see in the pack there are a variety of essays that your knowledge and skills will be eventually tested on in the A2 exams.

Homework – bring in to your next lesson at least one piece of AS work per subject teacher with feedback you found useful.

Please note that the following tasks shape the sub-headings and notes for your project.

Task 1: Understanding Developed and Developing Countries:

What are the characteristics of an LDC (LEDC) country? http://www.tutors2u.com/rte/File/Economics/Characteristics%20of%20LDCs.pdf

What are the characteristics of a NIC country?

http://www.slideshare.net/guest0edc68/newly-industrialised-countries

What about other countries characteristics – HDC, MDC ? http://maps.unomaha.edu/Peterson/geog1000/Notes/Notes_Exam1/WorldDev.html

What problems are there with categorizing countries?

Task 2:

Investigate three countries choosing separate countries from the following continents: Africa, Asia, South America, North America and Europe. Either:

 select a post industrialised country, BRICS and LEDC; or

choose two BRICS’ (causes of rapid growth in countries such as China and India as a contrast) and an LEDC or HDC; or

select two LEDC’s and either a BRIC or HDC.

a)     Select three countries as advised above.

b)     Gather initial research from the World Bank and CIA factbook. Consider measures you think are important in measuring quality of life in the three countries.

                World Bank - http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html

CIA Fact Book - https://www.cia.gov/library/publications/the-world-factbook/

c)     Recall from AS level – what is the Human Development Index and how is it measured.

d)     Obtain HDI data for three countries –

http://en.wikipedia.org/wiki/Human_Development_Index

http://hdr.undp.org/en/statistics/hdi/

Task 3: Definitions of absolute and relative

a)     Define Absolute Poverty

b)     Define Relative Poverty

c)     Gather evidence of both in the three countries of your choice.

Task 4:

Gather evidence of the causes and consequences of poverty in the countries of your choice – for example the extent to which inequality is an essential ingredient of capitalism.

Task 5

What is a Lorenz curve?

What is the Gini Coefficient?

Draw Lorenz curves from a data set for your countries and establish Gini Coefficents for them.

Task 6:

For each country consider the nature and consequences of each of the following causes of low growth rates and development

Consider factors such as:

poor infrastructure

human capital inadequacies

primary product dependency – declining terms of trade

savings gap; inadequate capital accumulation

foreign currency gap – terms of trade

capital flight – currency crashing

corruption

population issues

debt

poor governance; civil wars.

Task 7:

Understand and be able to evaluate each theory: Harrod-Domar, Solow, Rostow’s Stages of Growth, and the Lewis 2 — sector model; market orientated approaches; structural change theories; international dependence theories.

Task 8:

With reference to each country, consider which theory and following strategy might be most appropriate:

Understand and be able to evaluate each strategy, remembering that different measures will be valid depending on the nature of the country requiring assistance (for example, degree of political stability/ corruption, or sophistication of transport and communication links):

• Aid – Ethiopia’s dependence
• debt relief
• development of human capital
• inward looking/outward   looking strategies
• free market/government  intervention approaches
• industrialisation; development of tourism; agriculture
• microfinance
• impact fair trade schemes- e.g coffee
• role of international financial institutions e.g IMF and the World Bank’s Structural Adjustment Programmes (with reference to Uganda as the first ‘success’) and nongovernment organisations in promoting growth and development e.g. Jubilee 2000

Research source material: Spence Commission on Growth and Development 2008 for very useful for background and case studies

Task 9:

Project Extension:

Consider whether growth and development is actually desirable, since it may be accompanied by a number of negative externalities.

Possible exam questions

1. Discuss the advantages and disadvantages of a floating exchange rate system on the UK economy? 25 marks

Apart from the standard focus on how pounds depreciation has affected UK macro-performance; central to this question is "the perceived attractions of the floating system in comparison to the potential
weaknesses of a fixed system; the way in which central banks may be able to intervene effectively to
reduce instability and hence the potential impact on economic performance of the countries affected."

i.e. in the last recession 1988-92 UK interest rates (above 10%)had to be increased to defend sterlings fixed value. This time round the Bank of England has been able to be relaxed about sterlings fall and not having to put up interest rates; thus operating an expansionary monetary policy. However it can not be too complacent a run on the pound would need to be avoided with higher interest rates and reversing QE to prevent inflation going out of control.

2.  Discuss the economic advantages and disadvantages of the UK’s not being a member of the Euro? 25 marks

3. Explain the distinction between comparative advantage and absolute advantage. 10 marks

4. d) Extract C (lines 12 and 13) refers to a ‘virtuous circle of trade liberalisation and economic
growth’. Evaluate the case for and against greater free trade in the world today in its impact on the UK

Export multiplier
FDI - Investment Income
Comparative advantage growth theory
Competitive advantages through specialisation and economies of scale
Use of Tariff diagram analysis and evaluation ( complex or simple diagram)

5. Discuss the impact on the UK of 'the case for and against more flexibility in EU member states budget deficits’. 25 marks

UK is a member of EU - so policy would apply to UK as well

successful counter cyclical fiscal policies result in growth - UK exports?
EU member states - sovereign debt problems - crowds out private sector Investment
risks inflation across EU - 50% UK trade with EU so UK risks importing inflation so UK forced to increase interest rates if inflation is still a target.

6. Assess the impact on UK macroeconomic performance of a prolonged period of deflation. 25 marks. Ensure careful evaluation.  June 2010