Sunday, March 29, 2009

Unit 2: Revision: Exchange rates

From economics student comes this handy summary of what determines exchange rates

....and why exchange rates change

.....and what determines exchange rates

.....and the implications of changes in the exchange rate

Saturday, March 28, 2009

Unit 2: The worldwide nature of the current recession

Various reports of shrinking economies all over the world

New Zealand

a) Are the factors causing the recession the same in each country the same? Think in terms of the components of aggregate demand

Unit 2: A shrinking economy and rising savings ratio

The BBC reports that the UK economy shrunk by 1.6% in the last 3 months of 2008. In addition, it appears that the recession is leading people to save more

a) Define the savings ratio
b) With savings interest rates at close to zero, why would peeople be saving more?
c) Using an AD/AS diagram, explain the likely consequences on the UK economy of an increase in the savings ratio
d) Following on.......explain why in the long term an increase in the savings ratio might be desiarable but why in the short run it is not

Friday, March 27, 2009

Unit 2: Revision: Protectionism

From economics student comes this handy summary of methods of protectionism. You don't need this tariff diagram for the AS exam; a simple S&D diagram showing S shifting to the left witht the resulting increase in price and fall in quantity demanded is sufficient

Thursday, March 26, 2009

Unit 2: Inflation up (CPI)....and down (RPI)

From a question of economics comes this useful summary of the CPI/RPI distinction and a link to the BBC
The questions associated with the post are excellent BBC video

......and this on a similar tack from economics help this powerpoint on various aspects of inflation from tutor2u

Unit 2: Japan's fall in exports

An interesting article from the BBC describing a catastrophic decline in Japan's exports

a) What would you expect the effect of this decline to be on the Japanese economy?
b) Given that imports fell by even more, explain the effect on the current account of the BoP

Unit 2: What We Have Tried to Boost Economic Growth

From economics help comes this great summary. Take particular note of the evaluative comments about why the policies may not have worked

Unit 1: Tradable permits: Carbon trading videos

From tutor2u come these 2 videos on carbon trading

Monday, March 23, 2009

Unit 2: Inflation: Changes in the basket of goods

The BBC reports the annual changes in the basket of goods used to measure the CPI

a) What is the CPI?
b) Why do the articles in the basket of goods alter?
c) Would you have expected the weights allocated to the various items in the basket to have changed this year? Explain your answer

Wednesday, March 18, 2009

Unit 2: Regional Unemployment in the UK

From economics help comes this useful post on Regional Unemployment in the UK

a) To what extent is regional unemployment a problem for the UK?
b) What actions can the govt take to reduce regional unemployment?

Monday, March 16, 2009

Unit 1: Air travel: A normal good?

From the BBC comes this article about falling numbers of air passengers in 2008

a) What evidence is ther to suggest air travel is a normal good
b) If this is the case, would the income elasticity of demand for air travel be +ve or -ve? Explain your answer
c) The following passage lists has many statistics: What use would they be for firms planning their stratagy to deal with the downturn in passenger numbers?

UK airports handled 235 million passengers in total last year, the CAA found.
The 1.9 per cent decline is only the the fourth annual decrease in passenger numbers since the end of the Second World War, the authority said.
CAA figures revealed London's airports, including Heathrow, Gatwick, Stansted, Luton and London City, saw an overall annual fall of 2%.
Stansted was particularly badly hit, with 1.4 million fewer passengers in 2008 - a 6.0% decline on 2007.
Manchester, the biggest regional airport, also saw passenger numbers fall by 3.8%.
However, not all airports were hit by a decline in travellers.
London City airport saw a rise of a 12%, Luton showed a 2.6% increase and Birmingham's numbers rose by 4.8%.
Rail competition
The CAA also revealed charter airline numbers were down 9.3% on 2007, while scheduled airlines were down 0.8%.
There was also a fall in the overall number of passengers taking domestic flights - down 4.8% to 25 million.
The authority said this was partly due to increasing numbers of people opting to take the train.

Unit 2: Revision: Economic growth

From economics student comes this useful introduction to economic growth

..and this linking economic growth to AD and AS

...and this on the causes of actual and potential economic growth

...and this on potential output and output gaps

Saturday, March 14, 2009

Unit 1: Taxation as an approach to reducing the negative externalities associated with chocolate consumption

Tutor2u has an interesting post about the BMA proposal to tax chocolate and there is a BBC vieo and article as well video

a) How does the free market for chocolate fail?
b) What are the private costs and external costs associated with consuming chocolate?
c) What are the private benefits and external benefits associated with consuming chocolate?
d) Using a S&D diagram, discuss the extent to which a tax on chocolate would reduce the market failure

Unit 1: Uses of Elasticity estimates

From economics student comes this useful summary of how price, income and cross elasticity can be used in the transport sector

Unit 2: Appreciating/depreciating exchange rates

An interesting article from economics student on exchange rates

a) Why is a depreciating £ good for British exporters?
b) What effect would the depreciation have on those businesses who import goods in to the UK?
c) Using a S&D diagram, explain why the Swiss Franc has appreciated
d) Using a S&D diagram, explain the effect of the Swiss authorities policy “to purchase foreign currency on the foreign exchange market to prevent any further appreciation of the Swiss franc against the euro”

Wednesday, March 04, 2009

Unit 2: Monetary policy: Quantitative easing - How it works and why it's needed

This BBC clip uses a car analogy to explain the process of quantitative easing

This article also explains it

This clip explains its role in conjunction with interest rate cuts

But, if it all goes wrong, here's what could happen

Unit 1: Alcohol abuse and govt action to reduce market failure

These BBC clips outline Scottish proposals to reduce alcohol consumption

A summary is in this post from A question of economics

This BBC post has the proposals from the Chief Medical Officer Of England article video

The government response is here video

a) What evidence is there of market failure?
b) What actions are the Scottish govt/Chief Medical Officer proposing?
c) Using a S&D diagram, discuss the likelyhood of this intervention being successful in reducing the market failure

Sunday, March 01, 2009

Unit 2: Recession and unemployment

A big thanks to Geoff Riley at tutor2u for posting this BBC Newsnight video on how the UK economy is coping with the recession

a) Explain how the negative multiplier effect resulting from unemployment is deepening the recession
b) How does the video indicate the inequality often associated with unemployment?