Economics Exam Dates - planning for 2015

6EC01 - 11 May am - 90 minutes
6EC02 - 19 May pm - 90 minutes
6EC03 - 11 June pm - 90 minutes
6EC04 - 19 June am - 2 hours

My free Christmas present for you:the Financial Times

A few years back the Government's chief economics civil servants indicated that the best newspaper for A2 and AS Level Economics students was the FT. Please do use the Christmas break to get the FT for free - where you can weekly access excellent articles by the FT's Chief Economist: Martin Wolf.

See this following link for Martin Wolf's verdict on the recent Autumn Budget statement:

The battle over the public finances will define Britain

http://www.ft.com/cms/s/0/c6ea70a8-807e-11e4-872b-00144feabdc0.html#axzz3Ly7eBVl7

UK's trend growth (productivity) may now be 1% per annum on average

Fiscal receipts (mostly tax revenue) is likely to rise from 35.5% of GDP to 36.2% by 2020.

"Public sector net debt is now too high"

"The case for achieving an overall fiscal surplus in the next parliament is not overwhelming."

Christmas at Econstories

Aside from putting these excellent economics Christmas gifts on your Santa wish list - there is some entertaining material here in understanding the battle of ideas. A battle between those who favour the use of government intervention to put an end to the great recession (the followers of Keynes - Keynesian interventionists) against those who blame the great recession on government intervention and want to see less state intervention (followers of Hayek - free market economists).

http://econstories.tv/fight-of-the-century/ AS introduction (A2 recap)

http://econstories.tv/fear-the-boom-and-bust/

UK's trade deficit

Exports and Imports

The demand for exports and imports is influenced by:

Price - changes in costs of production such as cheap wages or price of oil
Price - changes in exchange rates - SPICED - strong pound imports cheaper exports dearer
Income - growth or recession in UK have an impact on what we spend on imports and likewise growth or recession in foreign markets will change demand for UK exports (especially luxury products that have a high income elasticity of demand)
Quality - improvements in UK design, engineering and high technology have made our gods and services more attractive worldwide.

The size of the UK's trade deficit is very volatile.

In 2015 it hit a record 6% of GDP compared to the usual large and persistent 2-3%.


Reasons why:

1. the pound may rise against the euro making the price of our exports less competitive so hitting UK export earnings and making imports more attractive - assuming demand for both is price elastic

2. World recession may also mean less is spent on UK luxury exports e.g Jaguar exports to the BRICS

3. UK economy may continue to grow resulting in the purchase of more imported clothing and electronic products so overall expenditure on imports rises.

However

Less being spent on imports
1. falling oil prices mean we are spending less on oil related imports which are price inelastic
2. deflation in the Eurozone so may be faced with spending less on imported euro goods, assuming demand is price inelastic
3. The UK economy may slow down resulting in lower spending by UK households and firms on imports

EXAM TIPS:
Please note as an exam an important assumption to be made is the Price Elasticity of Demand for exports and imports.



Look at the direction of change when considering the impact on the UK economy e.g using AS/AD assess explain the likely impact on the UK of a widening trade deficit?

see link here for answer: https://www.youtube.com/watch?v=HMGMk-5RZcc&index=7&list=PLB19E61D93CD7E354

Some relevant articles:
http://www.economicshelp.org/blog/1310/economics/uk-trade-deficit/
http://www.bbc.co.uk/news/business-30411134
http://www.tradingeconomics.com/united-kingdom/balance-of-trade

AS and A2 Homework: Deflation Podcast - listen to before 28 November

Why do we want low and stable prices is a common exam question. In addition understanding the impact of deflation or high inflation on the economy is often a question that students become easily confused with. In this excellent short podcast, identified by the Principal Examiner for Paper 6EC02, the BBC carefully answers these questions for you. Following on from your studies in lessons - make some notes from this podcast that you can share with me over the coming week.


http://www.tutor2u.net/blog/index.php/economics/comments/in-the-balance-podcast-inflation-and-deflation-discussion

AS/A2 Revision - understanding Real GDP per capita at PPP

Great resource here as you prepare for your mocks:

http://www.tutor2u.net/blog/index.php/economics/comments/when-will-china-overtake-america/


Economist article on growth in China slowing down

Understanding of PPP as you make your own forecast on when China may overtake the USA as biggest economist in the world and the Big Mac Index.

A2 students retaking

Year 13 Economics AS Resits strategy

After School Economics club – Every Monday after School, Room 1

October break – AS Study Notes

November AS Mock

Given all students are unable to resit exam papers in January it is essential that as they progress through their A2 studies they are able to keep on top of the AS exam paper(s) that they have chosen to resit in May 2015 and will be able to enter for in Jan-Feb 2015.

In the past, extra-curricular revision sessions have been attended by students on an entirely voluntary basis.  There has been, however, a clear link between achievement in the examinations and attendance at the revision sessions.  With a view to helping every student to be as prepared as possible this year, I am confirming the timing of those sessions as every Monday after School in Room 1

In addition, attendance at revision sessions for a re-sit of a unit of study in Economics is compulsory. Students who do not attend the relevant revision sessions, though, may be withdrawn from those re-sits.  Where their timetables allow it, you have been encouraged to join the current Year 12 lessons.

Of course, to be fully prepared for your exams, you need to do more than just attend revision sessions.  Punctual attendance at timetabled lessons is vital.  Given the improvements in the ‘Sixth Form Study Area’ Ithe expectation is that you make effective use of your private study time, consolidating the work done in lessons, practicing exam style questions and effective revision notes. You have been asked to ensure you register with a member of the Sixth Form team at the start of these sessions and Mr Lawfull and I will undertake random spot checks of your studies and be available to answer questions when possible. Finally at this stage in the course you have been provided with guidance on what to study over the October break for your AS and A2 Mocks in November. I will be checking your AS study notes on Monday 3^rd November and talking you through specific AS exam skills at this session in preparation for your AS mock exam week beginning 10^th November.

AS Mock exam timetable – dependent upon student timetables

6EC01 paper 50 minutes

6EC02 paper 50 minutes

Monday 10^th November 3.20pm – 5.10pm, Room 1

Thursday 13^th November 9am-10.50pm, Gym

Friday 14^th November 1pm-2.50pm, Gym

 

Yours sincerely

Mr T Gray

Faculty Leader – Business, Economics and Enterprise

AS Economics - October Break Revision

Using Anderton 5th Edition, (purple) the following chapters and pages are recommended:

Both papers - light read chapters 1,2 and 3, in depth study Chapter 2 on Economic data

Mr Lawfull - 6EC01 - Chapters 5 and 6 Demand and Supply curves

Mr Gray - 6EC02 - Chapter 19 on National Economic Performance and Chapter 20 plus the following will also help: Ch 27 Economic growth, Chapter 30 Unemployment pages 209-210 and p213-216; Chapter 31 - Inflation pages 217-218 and p221-222; Ch 32 Balance of Payments p224 and p228-229. We will be revisiting Ch27 onwards so this is why the pages chosen are very selective and you should only look at this after comprehensively covering Chapters 19 and 20.

Year 12 Bank of England Competition

Dear Economist

If you are interested in becoming a member of the Cherwell Target 2.0 Team competing on Nov 26^th . I need you to read the following guidance and to be prepared to make a 3 minute powerpoint presentation and answer questions inside an additional 5 minutes on one of the following areas. Based on this presentation to be made on Monday 3^rd November in Room 1 between 3.20-4.20 I will select four students.

Presentation Topics, please choose one to base your recommendations on:

·         Financial markets

·         International Economy

·         Money, credit, demand and output

·         Supply, costs and prices

Good luck

Mr Gray

GUIDANCE

You will receive final heat instructions shortly, but below are a few reminders. You will find more information on the Target Two Point Zero website in the FAQs section.

• The objective is for your team to make a presentation that sets out their view on current economic conditions and future prospects, culminating in a policy recommendation aimed at meeting the inflation target which is currently 2%. In doing so, teams may wish to consider how their decision fits with any 'forward guidance' communicated by the Monetary Policy Committee. Your team should decide on the level of Bank Rate, asset purchases or sales, and whether to provide forward guidance taking the MPC's decision set on 6 November as the basis of your decision. Your team's decision therefore has three parts: whether to increase or decrease Bank Rate; whether to increase or decrease the level of asset purchases; and whether to provide any new forward guidance for future monetary policy.

• The rules require that presentations should be no more than 15 minutes long, but they can be shorter. It is the quality of the argument rather than the length of the presentation that is important. Following the presentation, the judges will ask the team some questions. When answering judges' questions, the approach used is at the discretion of the teams. The key point is that team members should work together as a team. Teams will be marked down if answers are dominated by one or two team members.

• Each team member must make a significant oral contribution to the presentation. Team members may refer to hand-held notes and to their visual aids but they should not read verbatim from their scripts, laptop screens or visual aids.

• The format of the presentation is up to the team. PowerPoint facilities will be provided. It may be possible to provide other equipment if specifically requested. PowerPoint presentations must be in Microsoft PowerPoint 2010 compatible. The presentation should be stored on a USB Memory Stick but should not be compressed i.e. no zip-files. It is advisable to avoid unusual fonts and advanced features.

• Teams must bring 3 printed handouts of their presentation for the judges. The handouts will not to be taken into consideration by the judges in their marking and you will not be penalised if, for technical reasons, you are unable to provide them. The handouts are simply to help the judges, who find it useful to have hard copies of the presentation, on which to make notes. They also provide back up in a format which does not rely on computer technology in the case of equipment failure on the day. The format is up to teams. The important thing is that the printed slides are clear and easy to read with space to make notes. Any last minute changes to slides can be made in manuscript at the event. Teams will not be marked down for this.

DATA

The next set of monthly datasheets were available on Friday 10 October.

Please note that the latest MPC minutes have been published. Please click on the following link to access:
http://www.bankofengland.co.uk/publications/Pages/default.aspx

PARTICIPANTS

A full list of participants in this year's Challenge is also available on the Target Two Point Zero website.

A2 Economics - Development Economics Exam tip: CONTEXT

You must in your essays use specific examples and when it asks for you to look at 'a developing country of your choice' ensure you draw on one country as your example throughout your response. To do this you need to improve your knowledge of case study examples from LEDC and BRIC nations. To do this you need to:

1. upgrade your development project, 
2. make use of Anderton
3. complete the worksheet questions and answers, 
4. make use of the very useful resource Tutor2U - follow this link to look at some case study examples then click on the Development Economics link at the end to access more resources.

http://www.tutor2u.net/blog/index.php/economics/comments/development-economics-e-book

Protectionism

Really good short video from PAJ here - but trying redoing the diagram using letters:

http://www.youtube.com/watch?v=dSQTbd2iJtY

Exam tip - it is essential to discuss Protectionism in context. It is very difficult for a country to go alone for example the Uk is a member of the EU as a trading bloc. The EU's trade relationship with Africa is a complex one as illustrated by the following article:

http://www.dw.de/high-duties-keep-food-imports-from-poor-countries-out-of-europe/a-5127705

Student Investor

http://www.studentinvestor.org/

Circular Flow of Income Model - AS Economics

Make sure you carefully study Anderton Chapter on this and make use of this useful summary from PAJ:

http://www.youtube.com/watch?v=gaEY-p-21F8

Inflation versus Unemployment: The Phillips Curve

Great little 60 second adventure in Economics Video for understanding the Phillips curve.

http://www.youtube.com/watch?v=H_LHFs_Htak


Remember: a policy of trying to achieve growth may result in higher inflation but lower unemployment as some firms respond to more customers by putting up prices whilst other will open new stores. Alternatively a policy of trying to achieve lower inflation or stopping people buying imports by reducing their disposable income - might cause lower inflation but also higher unemployment.


The key point is that different levels of inflation and unemployment may coincide due to the spending and tax plans of the UK government or interest rate changes by the  Bank of England.

Arguing that higher inflation causes low unemployment OR high unemployment causes low inflation needs to be done either very carefully as in this Video or avoided so as not to confuse the reader.

AS and A2 students - why trade matters to the UK?

Understanding the UK's current imbalance problem - trade in goods deficit

http://www.economicshelp.org/blog/5776/trade/uk-balance-of-payments/

For A2 students the following is an excellent video clip on understanding 'comparative advantage theory'; essential knowledge for A2 exam.

http://www.youtube.com/watch?v=U12yZXBmQmY

AS Economics - Growth

Following your lesson on growth the BBC has some useful video resources to improve your subject knowledge:

What is GDP?
 

Can you get Economic Growth without development?

A really useful study/revision tool is Economics Help. Use the following link to add some critical insight into the growth and development debate:

http://www.economicshelp.org/blog/1187/development/economic-growth-and-development/

A2 Economics

Key priorities for completion by Weds 16 July

1. Development Project                                                                                                               Complete your development project for your country of choice to a standard suitable for publication and share with Mr Gray.
2. Essay                                                                                                                                                 Re-do your RES essay so suitable for marking as a 20 mark essay (3 points evaluated) or 30 mark essay (4 points evaluated)

Summer Homework

Ensure you make careful study notes and answer all questions Chapters 38-39 and 99-100. If possible I would advise a light read of the A2 Anderton text book (purple edition).

A2 Microeconomics 6EC03 Chapters 38-55  (40% of A2 exam) - Mr Lawfull
A2 Macroeconomics 6EC04 Chapters 76 - 103 (60% of A2 exam) - Mr Gray

RES Essay competition

Tutor2u link to advise on the question you are doing: http://www.tutor2u.net/blog/index.php/economics/comments/res-competition-growth-poverty-and-the-environment#extended

Monetarism at A2 level ??!!?

They key remains being confident about the role of the central bank to achieve its inflation target and a sophisticated in-depth critique of the monetary transmission mechanism with use of AS/AD analysis. Remember 6EC04 is synoptic so do not hold back from heavy use of AS knowledge but crically analysed in a sophisticated way drawing on your knowledge of USA, EU and Japan.

Key issues

1. Base rates at all time low for a number of years - lack effectiveness? So need for Central Bank QE essentially increasing money supply into banks and Government intervention 'Funding for Lending' getting the banks to lend to small firms and first time buyers (but fuelling housing boom in UK)

2. Continuing credit crunch - unwillingness of banks to lend to consumers and firms

3. Low consumer and business confidence - unwillingness of firms and consumers to borrow

4. Inability of monetary policy to cope with supply side shocks and one-off sharp movements in currencies

5. Ability of monetary policy to avoid deflation - the 'great recession' has not felt like the 'great depression' for many households and firms.

Some good articles in the Telegraph today on Monetary policy:

Brief summary -  http://www.telegraph.co.uk/finance/economics/10872804/ECB-interest-rate-decision-live.html

In depth complex analysis - http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10876377/The-nagging-fear-that-QE-itself-may-be-causing-deflation.html

A2 Exam Question - The Pound/Currency movements

Again useful tutor2u article:

http://www.tutor2u.net/blog/index.php/economics/comments/impact-of-a-rising#extended

Model student response: Discuss impact on UK economy of weaker pound:
In theory the weaker pound should have triggered export led growth. A weaker pound could make UK exports cheaper assuming UK inflation rates are low and stable. Cheaper UK exports assuming the Marshall Lerner condition would result in a rise in the value of Uk exports, given the demand for UK exports is price elastic. However in the short run their may have been a further deterioration in the trade deficits as UK exports sell abroad for a lower price but overseas companies are stuck in contracts with other suppliers, see the UK sterling change as only temporary or UK exports firms are unable to meet new orders. In the long term it is argues that the J curve effect will occur thus see a reduction in the UK's trade deficit and a rise in AD as the value of exports rise and imports decline triggering an export multiplier growth effect. However if the price elasticity of demand for imports is price inelastic as UK firms depend on overseas materials and components then the UK could simply suffer a deeper trade deficit plus stagflation as cost push inflation takes hold.

What do you make of this response? How could this be improved?

What if the exam question was on a stronger pound or stronger Chinese currency?

RES essay - possible exam focus?

See Tutor2u link: Promoting growth and fighting poverty should be the priority in the developing world, not reducing greenhouse gases.” Do you agree?

http://www.tutor2u.net/blog/index.php/economics/comments/res-competition-growth-poverty-and-the-environment#extended

6EC04 Sessions

Please do email me for feedback: tgray@cherwell.oxon.sch.uk

I am available for the following revision sessions, again best to email in advance to book your slot:

Weds 4th June all day
Thursday 5th June all day
Friday 6th June 9am-12

Monday 9th June - pre exam session

Tuesday 10th June EXAM DAY
- final exam calming session in Room 1 period 3 and COLLECTING BOOKS

6EC03 June 3rd

Any last minute feedback please do still email me: tgray@cherwell.oxon.sch.uk

I will be providing breakfast in room 1 from 8amon Tues June 3rd onwards for final calming exam nerves session: essentially remember to use the case study/examples and evaluate.

Problems accessing Edexcel or want to find older papers...

Edexcel has updated its link and it is working fine most of the time but you may find the odd mark scheme missing. The following link is proving useful in the meantime:


http://freeexampapers.com/index.php/?location=A+Level%2FEconomics%2FEdexcel#/A Level/Economics/Edexcel

6EC04 Case Study examples

Some recent student essay responses included these helpful examples...

1. Trade blocs - EU, NAFTA looks at this link for a light read of African trade blocs: http://www.mbendi.com/land/af/p0010.htm

2. UK Prime Minister David Cameron went to China and India to promote trade links and FDI deals

UK - 2013 NMW increased to £6.31 for over 21's, however this was only a 12p increase from 2012 - very little for those struggling to meet their basic needs or maintain living standards with those on two-thirds of the average income (relative poverty).

In April 2014 a funding boost is targetted at 5 areas of the UK to help young people into work as a result of the Youth Employment Initiative (YEI) a new £170 million programme aiming to provide apprenticeships, work experience placements and entrepreneurship programmes for 15-24 year olds. However the scheme will only have an impact if it is spent effectively and there is sufficient take up also young people after the scheme nay not secure permanent employment unless the recovery if fully in place.

A return to a top rate of 50% income tax rate in the Uk might result in an incentive for the rich to place their income/profits in tax havens. This was witnessed in France when the 70% rate was approved however as more countries increase top tax rates and tougher action is taken against tax havens this might not be the case in the future.

3. Somalia lacks an established government given it's civil war so will struggle to access foreign aid, provide public services (health and education), have weak law enforcement resulting in crime (longevity)_ and corruption. Primary Product dependency - 80% of Somalia's exports are livestock - the drought and famine have further restricted Somalia's growth and development.

Somalia- http://www.ruralpovertyportal.org/country/home/tags/somalia



4. Also there are various treaties to prevent damage to the environment and encourage governments across the world to hit environmental targets e.g Kyoto Protocol.

5. In 1997 the IMF ordered Indonesia to liberalise its capital markets, capital flight resulted and the recession worsened as a result.

6. Absolute poverty in China has plummeted by 500 million since joining the WTO and embracing globalisation, but this may not be a meaningful increase in the standard of living - wages, work conditions etc.
http://www.youtube.com/watch?v=eIrSSZ13Ktc
Since this Video Foxconn has taken measures to improve employment conditions and trade union power and wages continue to grow in China.


7. Botswana has become wealthy from primary product dependency, diamonds in this case.

8. Japan has a 777% tax (approx) on imported rice. This may come to an end though as Prime Minister Shinzo Abe's reforms aim to liberalise and introduce more competition into the Japanese economy. Japan is also deliberately devaluing its currency and in engaging in large scale QE to escape two decades of deflation - it appeared to have succeeded.

Japan protected its infant microchip companies to achieve high rates of growth through developing its comparative advantage in this area through protectionism.

9. Countries such as Jamaica were mired in debt, debt cancellation has improved their economic development as Jamaica can spend money, previously allocated to debt interest repayments, on education and health.



10. It is very difficult for landlocked countries with poor transport infrastructure, such as Mali in africa, to gain from trade - neighbouring intra trade agreements needs to be the focus for it to be able to grow as on a global scale transport costs would eclipse the gains from trade. 80% of Mali's workforce is employed in agriculture.

A2 Economics exam practice 6EC04

Under timed conditions attempt the following from Quentin Brewer's revision pack:

page 65-65 Essay Q1 a and b and data Q3 - due 6th May

page 53 Globalisation and protectionism  - due 18th May

Mark yourself -Answers here:

http://www.hodderplus.co.uk/myrevisionnotes/a-level-Economics/index.asp

Bring in your responses for review.

AS Economics 6EC01 Final Preparation

Please use this long weekend to go over exam questions or content for 6EC01 and try to email me for any help you may need:

tgray@cherwell.oxon.sch.uk

Use 'my revision notes'
Answers here: http://www.hodderplus.co.uk/myrevisionnotes/a-level-Economics/index.asp

Monday 12 May Period 4 and 5 Pre exam final study - question and answer session on content and exam skills. Room 1

Tuesday 13 May 8am Pre exam breakfast (croissants and juice) - re-assurances and calm focus on what you need to do in the morning exam. Room 1

AS - 6EC02 Final exam preparation

Answer in full under exam conditions the January 2011 6Ec02 paper and use the following mark scheme to mark yourself for me to review and discuss with you in lessons next week:

http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/January%202011%20-%20MS/6EC02_01_rms_20110309.pdf

Surgeries - the following dates and times are open for you to drop in to room 1 and go over exam questions or content, please try to email me in advance when you are on study leave if you plan to come or email for any other help you may need:

tgray@cherwell.oxon.sch.uk

Weds 7 May 2-4pm
Weds 14 May 11-2pm
Thurs 15 May 9am-11
Fri 16 May 2-4pm
Mon 19 May 1-3pm

Use 'my revision notes'
Answers here: http://www.hodderplus.co.uk/myrevisionnotes/a-level-Economics/index.asp

Tuesday 20 May Period 1 and 2 Pre exam final study - question and answer session on content and exam skills. Room 1

Wednesday 21 May 11am-12 Pre exam talk - re-assurances and calm focus on what you need to do in the afternoon exam. Room 1

6EC02 Jan 2012 Model essay

With reference to Extract 2, evaluate the likely impact of higher inflation on THREE macroeconomic objectives

Introduction
Define Inflation - rise in general price level over time (2 marks). In Extract 2 UK inflation as measured by CPI is above target i.e. above £ % (2 data). Macro objectives are: low unemployment, low and stable inflation, sustained growth and avoiding a large and persistent trade deficit. In addition inequality and the environment can also be considered.

Higher inflation in the UK will make UK exports uncompetitive as Uk prices are rising around 3% on average whereas the euro countries prices are rising around 1.9% and therefore this will increase the UK's trade deficit (Point 2 marks and explained 2 marks). However the pound is getting weaker so this may make UK exports cheaper (2e) and also recovery elsewhere in the world e.g. USA might mean that other countries inflation is increasing as much as the UK's  (2e+).

Higher inflation in the UK above target will force the Bank of England to increase interest rates to curb this increase. As interest rates rise consumption and investment will fall resulting in recession. However the data says that the Bank of England are confident that inflation will fall back to 2% target (2e) so they will not increase interest rates (2e). However less consumption may help the environment (2e).

Higher inflation will erode the value of savings so rich people as savers will lose out and those on low income that have borrowed money will win, as they owe less in real terms, this may close the gap between the rich and the poor thereby reducing inequality. However the savings of rich people might be index linked to inflation thus preventing their savings from falling in value. (2e) Also low income people may not have their wages or benefits linked to inflation (index linked) so the cost of living may rise substantially for them. (2e)

6EC04: Debt cancellation and Trade liberalisation model essay

June 2012 2b Introduction Debt cancellation in this case is the removal of part or all the Debt plus interest owed by a developing country (NIC or LEDC like Jamaica or Liberia) for a World Bank (IMF). Economic development can be measured by the HDI taking into account average incomes, health and education. Trade liberalisation includes the removal of protectionist measures opening up countries to free trade, global markets and competition. Trade liberalisation has come about through membership of the WTO – China joined 2001, Russia 2012 to ensure multi-lateral free trade. http://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm First point Debt relief is a key policy, even when looking at developing nations. For every $1 of aid given to LEDC or NIC nations, $13 is spent on debt repayments. Therefore it is clear that before these nations can develop sustainably, their debts must be written off completely. Their attempts to repay the debts, even when it is usually just the interest being paid off, are taking much needed funding out of their economies and putting it back into MEDC nations. By cancelling nations’ debts, funds would be freed up allowing them to invest in their education or healthcare systems and to ensure the removal of absolute poverty. However, it is possible that debt relief can have some negative impacts. The HIPC initiative run by the IMF required Jamaica to cut spending on healthcare and education in order to qualify for debt relief by showing fiscal discipline and preventing the need for future loans as well as, making the country more attractive for Investment. What is needed is no-strings-attached debt cancellation. Alternatively the depreciating US Dollar might mean that the IMF debt which is priced in US dollars become less burdensome for LEDC countries to service - so the world economy may become less polarised as the poorer countries are given a better chance to grow and develop. However other factors may be more significant for in influencing growth and development, for example the level of corruption or political instability in Uganda. http://www.youtube.com/watch?v=JnNvNa7tXV0 http://www.youtube.com/watch?v=5WRdcpDNsdU

Three points selected from the following and evaluated:

Case for trade liberalisation:

• LEDCs have access to markets in developed countries: increased

exports and higher GDP, the proceeds of which may be used for

health, education, improved access to clean water

·         Increased competition might promote increase efficiency in LEDCs

• Incentive for multinationals to establish production plants in the

country so contributing to industrialisation

• Consumers benefit from lower prices and more choice

• More efficient use of resources – based on law of comparative

advantage leading to increased growth

• Enables LEDCS to become less dependent on aid

• Use of tariff diagram to illustrate impact of cut in tariffs e.g. on consumer surplus, producer surplus, welfare gains

However:

• Domestic firms in LEDCs may be unable to compete with TNCs

from developed economies

• Infant industries may be unable to survive

• Monopsony power of TNCs might result in exploitation of

resources of LEDcs

• Environmental arguments against free trade

• Problems of overspecialisation

• Dumping by developed countries

Other evaluative comments:

• It could be argued that without individual freedom, democracy

and the rule of law, economic development is not possible

• Difficulty of defining economic development precisely

Microfinance - Bangladesh

Bangladesh as a case study example:

https://www.youtube.com/watch?v=1UugpcDjjJU

Interview with the Nobel Prize Economist

http://www.youtube.com/watch?v=TPk2gRuIdj0

Developing countries case study examples - Foreign Aid

HIV
One third of Zambians are HIV positive and 95% of treatment is funded by the US government if this was to be suddenly removed as suggested by Moyo there could be devastating effects upon the country's development as shown by its HDI ranking unless Zambia can become self sufficient or boost its own domestic savings. - Chris/Will

1 million children orphaned in Uganda and 90,000 deaths each year so reduced productive capacity as unable to go to School as parents can not pay for them. - Robin

Education
Germany has provided aid to Ghana to ensure free School education however with only half of teachers qualified the effectiveness of this policy in boosting productivity may be questioned. - Tenzin

Micro-finance
World Bank funded in Ghana to provide Schools and invested and  - Alex

Charity/NGO
NGO (charity) One - funded Hospitals in remote areas in Ghana because foreign aid from 1950s focussed on cities resulting in regional inequality. - Alex

Disaster relief - After the earthquake in 2001 Oxfam has provided emergency relief in the form of doctors and medical aid to Haiti. However within the first 48 hours 40,000 people died that could have been saved with the availability of surgery. Also the aid is only short term with healthcare centres set up in carparks so it may not have a lasting effect.
Disaster relief - In Pakistan - 20 million people suffered due to flooding in 2010 OXFAM provided relief to 2.4 million people and they did this again when flooding hit again in 2011. Oxfam has tried to pressurise governments to stop the flooding happening again. - Lizzy

Horizontal Inequity (Gender divide)
In Zambia 85% of GDP based on copper,  64% live in absolute poverty, Zambia literacy rates 86% males 74% females so discrimination gender inequality. Oxfam investing in Health, Education but also women's rights to access education. However in the global recession copper prices fell resulting i less funding for education as growth slowed down. - Will/Tom

200m aid India 600m space prog 68% live under $2 per day; exports only account for 15% of its GDP, 1/3rd live below global poverty line more than sun saharan africa per capita incomes doubled last 12 yearrs, growth 7% per year. - Robin/ Vince - India said don't want

Foreign Aid to Ethiopia
Directed into cities but only 13% access to safe water so aid is not tragetted at peopole who need it , poor travel system means people can't go into inner cities. In 2007 Economist reported foreign aid given to provide Schools but people can't get into cities so ineffective.  Harith

Infrastructure
East Africa has one of the highest transport costs and UK DFID is sent to spend £10.5 million on improvements in transport infrastructure in Tanzania, Ugandfa and Kenya which will reduce transport costs by 10% boosting exports by 25%. - Vince, source Guardian.

Military rule  - foreign aid
Pakistan grew more rapidly under military rule through rapid industrialisation and US foreign aid directed on to military expenditure that expanded the economy. However under democratic rule Pakistan has suffered sanctions and received an IMF bail out for $11.3 billion.

Disaster relief - In Pakistan - 20 million people suffered due to flooding in 2010 OXFAM provided relief to 2.4 million people and they did this again when flooding hit again in 2011.

Add your own example by commenting and adding your name.

AS ECONOMICS EASTER REVISION

Create your revision plan:

www.getrevising.co.uk

AS ECONOMICS

EASTER REVISION

Think PPF: Invest in your revision, you may have an opportunity cost  of less time consuming TV, video games now but in the long run, with better results, you will be able to consume more.

We expect you to submit past paper exam practice responses over the holiday - see below.

Resources

Have you got your revision notes well organised into these topic areas, with key term cards, mind maps, condensed notes?

Have you practiced an exam question from the Scheme of Work for each section?

Traffic lighted specification – prioritise study of red sections, seek advice and guidance before Holidays and on Revision day.

Attend the Easter Revision Session 
– Monday 7 April 6EC01 10am-12 and 6EC02 12.30-2.30 in Room 1 

Websites

Tutor2u.net

Economicshelp.org

Stephanomics

Edexcel Exam papers

Practice Multiple Choice questions under timed conditions for Unit 1 and 30 mark essays also under timed conditions for Unit 2 and 4-14 mark responses for both, go over mark scheme and email for any questions you got wrong and do not know why the answer given is the correct one. Alternatively do essay plans – but please ensure you practice a few full responses or alternatively produce essay plans. ALTERNATIVELY FOR SIMPLICITY COMPLETE JUNE 2010 6EC01 and 6EC02 papers. This needs to form the substantial evidence of your revision that I expect to see you emailing across to me over the Easter break.

6EC01 JUNE 2010
http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/june2010-qp/6EC01_01_que_20100528.pdf

6EC02 JUNE 2010
http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/june2010-qp/6EC02_01_que_20100607.pdf

Use the Mark Scheme to go over your responses and email practice questions or queries to:

tgray@cherwell.oxon.sch.uk

PREPARE FOR SECOND ROUND FULL MOCK PAPERS IN FIRST WEEK BACK AFTER EASTER AND RESITS OF FIRST MOCK IF FAILED.

A2 ECONOMICS EASTER REVISION

A2 ECONOMICS

EASTER REVISION

Create your revision plan: www.getrevising.co.uk

Think PPF: Invest in your revision, you may have an opportunity cost  of less time consuming TV, video games now but in the long run, with better results, you will be able to consume more.

Resources

·         Use the following Revision tasks to add to your revision plan – remember to treat as small bite-size sections.

·         Update your traffic lighted specification – prioritise study of red sections, seek advice and guidance before Holidays and on Revision day.

·         Have you got your revision notes well organised into these topic areas, with key term cards, mind maps, condensed notes?

·         Revise key terms – know your definitions (2 DEF), use glossary.

·         Practice your key diagrams – be ready for diagram test after Easter; how can you illustrate current issues in the world economy or in theory of the firm: energy price capping and game theory, growth in BRICS.

·         If stuck on a topic make use of the Cherwell Economics You Tube Channel. http://www.youtube.com/user/CherwellEconomics/featured

·         Attend the Easter Revision Sessions 
     – Monday 7 April Room 1 AS 6EC01 10am-12 & 6EC02 12.30-2.30 

- Tuesday 8 April A2 6EC03 10.00-12 and 6EC03 12.30-2.30pm

·         Ensure for 6EC04 you have good case study examples you can use per topic for UK, BRICS and most importantly LEDC - also do not forget the EU/Eurozone as a possible data/ context question.

Websites   Tutor2u.net    Economicshelp.org     Stephanomics         Martin Wolf in the FT

Edexcel Exam papers Try to practice exam questions from the Scheme of Work for each section? Select sections of exam papers based on Scheme of Work. The key is practicing the Edexcel style of writing.

Practice essays and multiple choice in timed conditions, alternatively do essay plans and email over to me – but please ensure you practice a few full responses and submit for marking. ALTERNATIVELY FOR SIMPLICITY PLEASE COMPLETE PAST PAPERS FOR EACH EXAM YOU ARE TAKING FROM THE JUNE 2010 SERIES AS BELOW. This is the key evidence I will want to see of your revision - so please email me practice attempts: tgray@cherwell.oxon.sch.uk

6EC03 JUNE 2010
http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/june2010-qp/6EC03_01_que_20100623.pdf

6EC04 JUNE 2010
http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/june2010-qp/6EC04_01_que_20100625.pdf

AS Res-its: If you are re-taking an AS exam 6EC01, practice as many Multiple Choice questions as possible, attempt past papers – email your overall score over and any questions that you have marked wrong and still do not get. For 6EC02 practice essays under timed conditions - remember simplicity and AS rather than A2 content so you do not run out of time.

6EC01 JUNE 2010
http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/june2010-qp/6EC01_01_que_20100528.pdf

6EC02 JUNE 2010
http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/june2010-qp/6EC02_01_que_20100607.pdf

Use the Mark Scheme to go over your responses and email practice questions or queries to:

tgray@cherwell.oxon.sch.uk . I expect to see a regular stream of attempted parts to questions

PREPARE FOR SECOND ROUND FULL MOCK PAPERS IN FIRST WEEK BACK AFTER EASTER AND RESITS IF YOU FAILED YOUR FIRST MOCK ATTEMPT.

AS/A2 level Phillips Curve

Useful powerpoint presentation found by Emma - be careful though to use what you understand, it gets a little advanced towards the end. under exam pressure a simple Phillips curve or even just AS/Ad analysis referring to inflation/unemployment trade offs will suffice.

http://www.slideshare.net/diamondcallo/8-1-the-short-run-tradeoff-between-inflation-unemployment

AS/AD: Monetary Transmission Mechanism

It is important that you are confident in using this essential feature of monetary policy and your ability to evaluate it at each stage i.e. why the transmission mechanism may not work.

http://www.bized.co.uk/virtual/bank/economics/mpol/mpc/theories1.htm

Also check Anderton - Purple edition page 581

6EC01 - AS Economics - the last 8

DRAFT VERSION

For your last 8 lessons come prepared with revision notes/cards per topic. In each lesson we will go over tricky concepts, model exam answers and test you on an exam question, which you will get feedback in the lesson or next lesson. For each lesson we will look at exam skills, use of the market mechanism and supply and demand diagrams.So make sure you come prepared.

Remaining lessons selected from the following in order of priority:

1. Price Mechanism (provide a step by step account of the changes - use the forces) and Consumer/Producer Surplus (illustrate initial welfare triangles then also show post shifts in demand or supply).
2. Externalities 1 understanding the diagram  - Jan 10 Qu 10 congestion charge, June 11 Q9 NHS
3. Externalities 2 - Tax and Subsidies, permits, govt failure - June 06 Q2 (wind turbines), Gavin DR Q4 Health (free/mixed economy)
4. Different types of goods - complements, substitutes - Elasticities 1 - XED,
5. Elasticities 2 - YED, PES, PED
6. Unstable commodity markets - joint supply (oil), buffer stock - June 11 Qu 7, Jan 12 Qu 7 June 10 Qu 9  June 11 Qu 10
7. Labour Market and Immobility - Jan 2005 Min Wage Q2, Jan 09 Qu 9 (tuition fees)
8. Public Goods

Key exam lesson content
ATQ
use numbers/data - apply
timings
practice
Evaluate
accurate diagrams
14 marks

6EC02 - AS Economics - the last 8

For your last 8 lessons come prepared with revision notes/cards per topic. In each lesson we will go over tricky concepts, model exam answers and test you on an exam question, which you will get feedback in the lesson or next lesson. For each lesson we will look at exam skills, impact on macro-economic performance and what shifts AS/AD.So make sure you come prepared.

Homework:

Lesson 1  - Monetary Policy
Study the following tutor2u link and bring your revision notes/cards to your next lesson to be able to answer the following questions:

link: http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-5-years-of-low-interest-rates

Define Monetary policy in the UK? Monthly setting of the base rate of interest by the Bank of England - controlling the interest rates set in the market that encourage/discourage Consumption, Savings and Investment. A demand side policy that shifts AD.

Five years of low interest rates - who are the winners, who are the losers?
Winners - the UK Economy - Growth, Deflation avoided, cheaper exports due to weaker pound
Winners 2 - Borrowers - Government Debt interest low, home owners mortgage interest repayments low
Losers 1 - savers - real rate of interest on an ISA -0.5%
Losers 2 - Pensioners - interest income from life-long savings low
http://www.ft.com/cms/s/0/c28f4be2-a44b-11e3-9cb0-00144feab7de.html#axzz2wUbBMlZZ

What is the impact on the value of the pound of lower interest rates in the UK compared to other countries?
Lower Interest Rates Weaker pound, assuming interest rates are higher elsewhere in the world.

What would be a monetary Demand Side shock and how would it affect C+I+G+X-M?
A rise in the base rate of interest may see a collapse in consumption and investment and consumer and business confidence falls, also the pound may soar resulting in UK export prices becoming uncompetitive and export revenues falling.

Lesson 2 - Fiscal Policy
Follow the Budget reporting on Wednesday 19th http://www.bbc.co.uk/news/uk-politics-26632862
Define Fiscal Policy? is the use of government expenditure and tax revenue (2 marks), as planned each year in the budget (2 mark), in changing the level of Aggregate Demand (2 mark). It is a demand side policy. (2 mark
Define Austerity Budget? is cuts in government spending (2 marks) and/or increases in taxes (2 marks) to reduce the budget deficit (2 marks).
 What would a green Budget look like? More government spending on renewable energy, energy efficiency, trains (HS2) etc Increases in taxes on energy consumption or petrol.
 What is the multiplier effect? http://www.youtube.com/watch?v=0CjNlyiDAno The knock on effect of a change in an injection (I, G, X) or leakage (S, T, M) results in a larger change in National Income (Growth). Someone's spending is someone else's income. You can also use the foruma 1/1-mpc but this is not essential for the exam.
What would be a fiscal Demand Side shock and how would it affect C+I+G+X-M? Large change in Income Tax will result in a large increase in consumption e.g. 1988 Top rate of Income Tax cut from 60% to 40%.

Remaining lessons

1. Supply Side Policies and Shocks
2. Trade Deficits - impact of weaker pound (exchange rate policy); costs and benefits.
3. Inflation - effects, price level, index numbers, CPI, RPI, costs and benefits, trade offs, Phillips Curve
4. Unemployment - ILO, LFS, costs, benefits, trade offs
5. Growth - Real/nominal, Output gap, circular flow,Standard of Living, HDI, other measures, benefits and costs of growth - inequality and the environment, inflation and trade deficits.

Key exam lesson content
ATQ
use numbers/data - apply
timings
practice
Evaluate
accurate diagrams
30 marks

Price capping - 6EC03

Make study notes from the following resource and answer the question:

http://www.tutor2u.net/blog/index.php/economics/comments/price-regulation-in-industries#extended


Discuss whether price caps should be introduced into the energy market in 2015?

Great UK Economy resource

Really impressive video link here for understanding the UK economy for Unit 2 and 4 and how 21st century firms operate for Units 1 and 3:

http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-mind-the-gap-london-v-the-rest

A2 Model: using comparative advantage theory in exam answers

Evaluate the benefits to an African country of increased trade with BRICS? (12 marks)

6 mark response

Increased trade links between an African and BRIC country, such as China, could result in increased economic growth for the African economy as a result of comparative advantage theory.  (1 mark for growth) This may occur as an African economy can identify its ‘ability to produce a good at a lower opportunity cost than China’s economy ie an African

country has a comparative advantage in production of a commodity if it has to forego the production of fewer other products such as manufactured items in order to make more crops. The resulting gains in productive efficiency resulting from specialising in growing crops and trading at a mutually beneficial exchange rate will result in catch up growth for the African economy and the ability to operate outside its PPF i.e. increased trend growth. (Extensive Analysis 2 marks)

However if the crop exported has a highly income elastic demand and China goes into recession growth may be stunted (2e). The developing country may become over-reliant on the crop - so risks harvest failure  - supply side shocks causes recession and absolute poverty. (1e). The developing country's exports lacks added value and faces global competition so poor terms of trade (2e).

Also other potential evaluative marks:

ignores transport costs (ie it may be cheaper to produce sheep in the UK rather than pay for

shipping from New Zealand (NZ))

• ignores external costs of production (eg environmental degradation)

• ignores gains from economies of scale

• assumes factors of production can easily be switched from producing one good to producing

another (which they can’t)

• assumes perfect knowledge (which doesn’t exist)

• reduces self-sufficiency.

To do - Produce a slimmed down version for discussing gains to the UK of staying in the EU?

AS Model answer: Examine the impact of a cut in interest rates

Using an AD/AS diagram examine the impact of a cut in interest rates

A decrease in interest rates may cause a fall in the cost of borrowing for many consumers and firms across the UK, as well as discourage savings (1m); this may result in a rise in Consumption and Investment (1 mark) causing AD to shift RIGHT (1m). The consequence of this is some firms may expand as they become more profitable when faced with more customers and orders for new technology from other firms, (1mark) resulting in RECOVERY, a quarterly rise in Real GDP after a recession (Y1-Y2) (1m) 

4 marks diagram

4 marks - explain a impact of cut in interest rates

4 marks evaluate

However the size of the recovery may not be that significant if the fall in interest rates is not that SIGNIFICANT  (2e) or long lasting as demand pull inflationary pressures (P1-P2) rise forcing the Bank of England to increase interest rates (MAGNITUDE/SCALE)(2e).

AS Model example: Examine the impact of a rise in the price of oil

Using and AS/AD diagram examine the impact of a rise in the price of oil

A increase in the price of oil may cause a rise in the cost of production for many firms across the UK as petrol, energy bills and plastics increase (1m) causing AS to shift LEFT (1m). The consequence of this is some firms may close as they become less profitable causing recession, a two consecutive quarterly fall in Real GDP  (Y1-Y2) (1m) Some firms may pass the increase in costs on to consumers so overall in general there might be a rise in cost push inflationary pressures. (1m)

4 marks diagram

4 marks - explain impact of oil price rise on growth and inflation

4 marks evaluate

However the size of the oil price rise may not be that significant  SIGNIFICANT  (2e) or may not last for long as eventually oil prices fall (TIME)(2e). Also the UK government may do something to help businesses cope with the rise in price for example by not increasing tax on petrol or cutting energy bill taxes on businesses. (2e)

AS Modelled Answer: Evaluate the use of a supply side policies to achieve economic growth.

Using an AS/AD diagram evaluate the use of a supply side policies to achieve economic growth.

A decrease in the National Minimum wage may cause a fall in the cost of production for many firms across the UK (1m) causing AS to shift RIGHT (1m). The consequence of this is some firms may expand as they become more profitable causing recovery, a quarterly rise in Real GDP after a recession (Y1-Y2) (1m) In the long term firms may relocate to the UK if they believe that the UK is a low cost economy, shifting PPF outwards i.e increasing potential output/trend growth. (1m)

4 marks - explain a supply side policy

4 marks evaluate

However the size of the recovery may not be that significant if the fall in the NMW is not that SIGNIFICANT  (2e) or does not affect many people (MAGNITUDE/SCALE)(2e). also workers may become poor, demotivated, leave the labour market or even the UK so  UK productivity falls and national output falls. (2e)

Stretching yourself at A2 and A Level

RES Economics Essay competition - please enter

http://www.res.org.uk/view/essayEduTraining.html

Homework questions
AS - Q6 for 6EC02 - 30 marks - skills increase and increased competition between workers cuts wages so AS shifts out; increased consumption and investment; increased government spending and tax revenue.
AS - Q3 for 6EC01 - 14 marks - separate negative and positive externalities diagrams

A2 - Q1 - 30 marks


The essay topics for 2014 are:
1.Promoting growth and fighting poverty should be the priority in the developing world, not reducing greenhouse gases. Do you agree?
2. Should childcare costs be deductible against tax for working mothers?
3. HS2 will blight the countryside and just lead even more businesses to locate in London. Discuss.
4. Are the advanced economies in for a long period of economic stagnation?
5. Is independence consistent with Scotland keeping the pound?
6. Does immigrant labour benefit or impoverish the United Kingdom?

A2 - Development,Inequality and the environment - Dimbleby lecture:

http://www.bbc.co.uk/iplayer/episode/b03ttn4b/The_Richard_Dimbleby_Lecture_Christine_Lagarde_A_New_Multilateralism_for_the_21st_Century/