...General Certificate of Education Advanced Subsidiary Examination June 2014 Economics Unit 2 ECON2 The National Economy Wednesday 21 May 2014 1.30 pm to 2.45 pm For this paper you must have: an objective test answer sheet a black ball-point pen an AQA 12-page answer book. You may use a calculator. Time allowed 1 hour 15 minutes Section A (ECON2/1) Answer all questions on your objective test answer sheet. Use a black ball-point pen. Do not use pencil. Do all rough work in this question paper, not on your objective test answer sheet. Section B (ECON2/2) Answer EITHER Context 1 OR Context 2. Use black ink or black ball-point pen. Pencil should only be used for drawing. Write the information required on the front of your answer book. The Paper Reference is ECON2/2. Information The maximum mark for this paper is 75. There are 25 marks for Section A. Each question carries one mark. No deductions will be made for wrong answers. There are 50 marks for Section B. The marks for questions are shown in brackets. You will be marked on your ability to: – use good English – organise information clearly – use specialist vocabulary where appropriate. Advice You are advised to spend no more than 25 minutes on Section A and at least 50 minutes on Section B. G/TI/100665/Jun14/E3 ECON2 2 Section A: Objective Test Answer all questions in Section A. Each question carries 1 mark. No deductions will be made...
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...General Certificate of Education Advanced Subsidiary Examination June 2013 Economics Unit 2 ECON2 The National Economy Friday 17 May 2013 1.30 pm to 2.45 pm For this paper you must have: an objective test answer sheet a black ball-point pen an AQA 8-page answer book. You may use a calculator. Time allowed 1 hour 15 minutes Section A (ECON2/1) Answer all questions on your objective test answer sheet. Use a black ball-point pen. Do not use pencil. Do all rough work in this question paper, not on your objective test answer sheet. Section B (ECON2/2) Answer EITHER Context 1 OR Context 2. Use black ink or black ball-point pen. Pencil should only be used for drawing. Write the information required on the front of your answer book. The Examining Body for this paper is AQA. The Paper Reference is ECON2/2. Information The maximum mark for this paper is 75. There are 25 marks for Section A. Each question carries one mark. No deductions will be made for wrong answers. There are 50 marks for Section B. The marks for questions are shown in brackets. You will be marked on your ability to: – use good English – organise information clearly – use specialist vocabulary where appropriate. Advice You are advised to spend no more than 25 minutes on Section A and at least 50 minutes on Section B. G/T90774/Jun13/ECON2 6/6/6/ ECON2 2 Section A: Objective Test Answer all questions in Section A. Each question carries 1 mark. No deductions will be made for wrong...
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...Economic growth | Recession | Country - % - Year | Country - % - Year | Country - % - Year | GDP Growth rateUK – 0.5% 2015CHINA – 1.8% 2015 | UK – 1.5% 1983CHINA – 11.7% 1978 | UK – 0.3% 2008CHINA – 9.2% 2009 | Inflation rateUK – 0.1% 2015CHINA – 1.3% 2015 | UK – 4.6% 1983CHINA – 8.3% 1978 | UK – 3.61% 2008CHINA – 0.9% 2009 | Interest rateUK – 0.5% 2015CHINA – 4.35% 2015 | UK – 9.8% 1983CHINA – 7.5% 1978 | UK – 5% 2008CHINA – 2.52% 2009 | Unemployment rateUK – 5.3% 2015CHINA – 4.05% 2015 | UK – 2.6% 1983CHINA – 4.9% 1978 | UK – 5.4% 2008CHINA – 4.2% 2009 | Describe how the current economic environment is impacting on your two chosen Businesses (P5 - Part 2) TESCO Tesco is negatively affected by economic elements because it affects its price profits and the cost of its products and services. Unemployment rate is one of the factors that affect the company’s profitability. Unemployment decreases the demand for its products and services and in the end, its profitability. Unemployment is a major concern to the company because it is beyond its control. It affects its marketing opportunities and its overall performance in local and international markets. Even though Tesco is expanding its operations globally, it doesn’t make the profits it would be able to make because of unemployment. Its income over the past few years have greatly increased but since it is largely dependent on UK market; unemployment rate in the country will mean low profits for Tesco...
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...Introduction Our main thesis is that well-developed capital markets generate many economic benefits, including higher productivity growth, greater employment opportunities, and improved macroeconomic stability. To focus on these significant benefits, we examine three issues: (1) the importance of capital markets in facilitating superior economic performance, (2) how the capital markets foster job creation, and (3) the necessary preconditions for the development of well-functioning capital markets. Our analysis focuses on two particular sets of comparisons. First, within the United States, how has macroeconomic performance improved over time as the capital markets have become more dominant? Second, across countries, can one explain the superior macroeconomic performance evident in recent years in countries that have well-developed capital markets such as the UK and the US relative to countries such as Germany and Japan, in which the capital markets are much less developed? We highlight the impact of capital market development on the economic performance of the United States because the capital markets are most well-developed in this country. Lessons from the US experience are nonetheless indicative to other economies of the value of well-functioning capital markets. 2 Executive Summary The ascendancy of the US capital markets — including increasing depth of US stock, bond, and derivative markets — has improved the allocation of capital and of risk...
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...international trading power. A highly developed, diversified, market-based economy with extensive social welfare services provides most residents with a high standard of living. The UK joined the European Economic Community (now known as the EU) in January 1973 and it is a founder member of the World Trade Organization. The United Kingdom is one of the world’s leading advanced economies. And it is the second biggest exporter of services in the global economy and ranked eighth in global exports of goods. The United Kingdom is the world's fifth-largest trading nation, highly dependent on foreign trade. It must import almost all its copper, ferrous metals, lead, zinc, rubber, and raw cotton and about one-third of its food. The United Kingdom's exports manufactured items like telecommunications equipment, automobiles, automatic data processing equipment, medicinal and pharmaceutical products and aircraft. Its main trading partners are European Union countries, The United States, China and Japan. United Kingdom is also the European Union's only significant energy exporter. It is also one of the world's largest energy consumers, and most analysts predict a shift in U.K. status from net exporter to net importer of energy by 2020, possibly sooner. Oil production in the U.K. is leveling off. Therefore, UK should export the oil energy from foreign countries. The economy of the United Kingdom is now primarily based on private enterprise, accounting for approximately four-fifths of employment...
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...BRITISH UNEMPLOYMENT AND MONETARY POLICY Dr Sushil Wadhwani Member, Monetary Policy Committee Bank of England Speech to be delivered to the Society of Business Economists on 2 December 1999. I am extremely grateful to Damon Clark, Joanne Cutler, Mark Dean, John Henderson and Duncan Melville for their help and advice on this work. I have also learnt a great deal by talking to William Brown, Richard Layard and Stephen Nickell. Ian Bond, Phil Evans, Paul Fisher, Mike Joyce, DeAnne Julius, Mervyn King and John Vickers provided me with helpful comments on an earlier version. The views expressed in this paper are personal and do not necessarily reflect any views held by either the Monetary Policy Committee or the Bank of England. 2 INTRODUCTION Many economists use a notion like the so-called ‘natural’ rate of unemployment (or the allied concept of the non-accelerating inflation rate of unemployment – the NAIRU, hereafter) in thinking about the labour market. Of course, the NAIRU is extremely difficult to measure, and, often, there is significant disagreement about where it is at a given moment in time. As I discuss below (in Section 2), since 1992, British economic forecasters have displayed a tendency to over-predict the level of unemployment, while simultaneously also over-predicting inflation. It is likely that these forecast errors have come from having been too gloomy about the NAIRU. In Section 3, I discuss econometric evidence suggesting that, in the 1990s...
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...IM Aggregate Demand Aggregate demand (AD) is the total demand for all goods and services produced in an economy in a given price level and time period. AD = C + G + I + (X – M) C means consumer expenditure. This makes up the majority of AD in most countries (about 65% of the total). I means investment in capital goods from firms, and this is the most volatile component of AD. This typically accounts for 15-20% of GDP, and the majority (75%) is from private sector businesses. G means government spending on state-provided goods and services. Transfer payments (state benefits) do not count because these payments are not producing an output – they are a transfer of money from one group to another. X means exports; M means imports. Exports are goods sold to overseas countries and imports are what the UK buys from foreign countries. (X – M) represents net exports. If this is positive, there is a trade surplus which adds to AD. Conversely, a negative net exports value means there is a trade deficit, which reduces AD. Consumer Expenditure Consumer expenditure is influenced by… The amount of real disposable income is the main influence on consumer expenditure. Households and economies with more disposable income tend to spend more in total than poorer ones. The proportion of income that is spent is called the average propensity to consume (APC). Wealth (the value of a stock of assets) affects C. Wealthier people tend to spend more. Wealth can be spent and can be used...
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...Government Macroeconomic Policy Inflation Unemployment Economic Growth Balance of Payments Conflicts Between Macro Economic Objectives Demand Management or Supply Side? 2 4 9 11 17 25 29 31 34 50 71 80 84 87 Page 1 Unit 3 Managing the economy Steve Margetts AGGREGATE DEMAND (AD) Aggregate demand (AD) is the total demand for goods and services produced in the economy over a period of time. DEFINING AGGREGATE DEMAND Aggregate planned expenditure for goods and services in the economy = C + I + G + (X-M) C Consumers' expenditure on goods and services: This includes demand for durables & non-durable goods. I Gross Domestic Fixed Capital Formation - i.e. investment spending by companies on capital goods. Investment also includes spending on working capital such as stocks of finished goods and work in progress. G General Government Final Consumption. i.e. Government spending on publicly provided goods and services including public and merit goods. Transfer payments in the form of social security benefits (pensions, jobseekers allowance etc.) are not included as they are not a payment to a factor of production for output produced. A substantial increase in government spending would be classified as an expansionary fiscal policy. X Exports of goods and services - Exports sold overseas are an inflow of demand into the circular flow of income in the economy and add to the demand for UK produced output. When export sales from the UK are healthy, production in exporting industries...
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...Managing Partner at the EBRD, IE Business School and Altura Advisers. Email: scommander@alturaadvisers.com Comments should be addressed by email to the author(s). 1 Thanks to Jeni Klugman for discussion and comments and to Ginette Azcona for help with data. Abstract The paper looks at the experience of advanced economies in dealing with employment volatility. It examines in detail the impact of labour market institutions on equilibrium unemployment and the p ossible le ssons f or e merging ma rket e conomies tr ying to d esign p olicy f or d ealing w ith unemployment and a wider, growing demand for social protection from their citizens. Part of the paper concentrates on t he t ransition e conomies whose i nstitutional c ontext m ay b e r elevant t o other emerging ma rkets. S ome leading principles in policy d esign a re elaborated th at take into account s ome o f t he co mmon f eatures o f em erging m arkets, n otably a p rotected p ublic s ector, large informal sectors and weak institutions. Keywords: employment, unemployment, labour market, emerging markets, social protection JEL Classifications: H53, J21, J65, J68 The H uman D evelopment R esearch P aper ( HDRP) S eries i s a m edium f or s haring recent research c ommissioned t o i nform t he g lobal H uman D evelopment R eport, w hich i s publ...
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...dropped sharply which caused the inflation to soar. The Central Bank of Iceland has been criticized for its monetary policy in the past and how it handled the collapse. The banks had pursued risky expansion strategies – notably borrowing in foreign capital markets to finance the aggressive international expansion of Icelandic investment companies – that made them vulnerable to the deterioration in global financial markets. They had also grown to be too big for the government to rescue. When access to foreign capital eventually closed, the banks failed. Non-financial firms and households were also vulnerable to the deterioration in global financial conditions, having taken on a lot of debt in recent years based on inflated collateral values. In some cases, the debt was foreign-currency denominated, without matching foreign-currency assets or revenues. This essay examines the Iceland Financial Crisis and analyzes the cause, effect, and recovery. Effects The current situation of the economy has severely affected many Icelandic business and citizens in the country. The replacement of Nyi Laandsbanki for the old Landsbanki , has caused the loss of 300 employees due to a radical restricting of the organization which intended to minimize the bank's international operations. Similar job losses happened at Glitnir and Kaupthing. The job losses or unemployment are compared with the 2,136 registered and 495 advertised vacancies in Iceland at the end of August 2008. There are also other company...
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...is business rate, as it has an unfriendly effect all in all economy. At whatever point there is high level of business rate the creation enhances in this manner expanding the expectation for everyday life (Manning, 2009). High unemployment rate in a nation prompts social and financial issues in the group in general. Financial issues bring about less generation of products and administrations, less appropriation of pay, misfortune of expense incomes, and fall in GDP rate and so on. Social issues cause's social ills and shows impact on people monetarily and mentally. People can't meet their money related commitments on time and getting high stretch which prompts issues like sick wellbeing, unexpected passing, suicides and so forth. Discussion The United Kingdom economy has experienced greatly unstable times lately and is currently confronted with numerous difficulties (Dolton, & O'Neill, 2002). Presently the economy is in a state of moderate recuperation, a long way from the levels of development accomplished in past years. The late managing an account emergency has highlighted numerous issues which have gotten to be territories of immense open deliberation and strategy change (Dolton, & O'Neill, 2002). As of late numerous financial variables in the UK economy have given a disheartening viewpoint, especially as they are not at levels which accomplish the legislature's macroeconomic goals. Then again, these monetary variables are generally subject to one another; endeavouring...
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...Current Financial Crisis: a review of some of the consequences, policy actions and recent trends1 By Sameer Khatiwada and Emily McGirr, International Institute for Labour Studies2 What is happening? On the heels of the near bankruptcy of a major insurance company and the effective end of all major US investment banks, financial markets around the world sustained severe losses in the first two weeks of October, 2008, accelerating the downward trend that started at the beginning of the year. As a consequence, from New York to Moscow, and London to Sao Paulo, equity prices have fallen sharply – with the major stock indices of the G7 and BRICs losing nearly half of their value since the beginning of the year. This has seriously damaged banks’ balance sheets and restricted their lending capacity. With the cost of short-term credit rising dramatically and liquidity drying up, these events have been dubbed the worst financial meltdown since the Great Depression in 1930s. More importantly, the shock waves from the US financial market have spread throughout the globe, with many countries on the brink of recession (see Figure 1, Appendix). How did a “house fire” in America turn into a global banking crisis? Sub-prime mortgages are a financial innovation designed to provide home ownership opportunities to borrowers in the U.S. with a higher risk profile (such as borrowers with low incomes, bad credit histories or limited disposable income). Most of the sub-prime ...
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...5/6/2013 By : ECONOMIC ANALYST | A PROJECT REPORT | THE ECONOMIC PROFILE OF NORWAY 2012 | GROUP MEMBERS Umar Shaharyar F11Ba120 SUBMITTED TO:SIR FAHAD KAZMI NORWAY INTRODUCTION: The country which we selected is “NORWAY”. Its capital is Oslo and total population is about 4.985 million. Adult population from 15 to 74 ages is about 4.056 million. Norwegians enjoy the second highest GDP per-capita (after Luxembourg) and fourth highest GDP (PPP) per-capita in the world. Today, Norway ranks as the second wealthiest country in the world in monetary value, with the largest capital reserve per capita of any nation. According to the CIA World Factbook, Norway is a net external creditor of debt. Norway maintained first place in the world in the UNDP Human Development Index (HDI) for six consecutive years (2001–2006), and then reclaimed this position in 2009 and 2010. The standard of living in Norway is among the highest in the world. The Norwegian economy is an example of a mixed economy, a prosperous capitalist welfare state featuring a combination of free market activity and large state ownership in certain key sectors. 1. GDP (Gross Domestic Product) GDP is defined as “The market value of all final goods and services produced within the country in the given period of time”. 1. NOMINAL GDP: It is defined as“The production of goods and services valued at current prices”. In Norway Nominal GDP is about 499.8 billion. ...
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...Economics The UK Economy and Globalisation WHY COUNTRIES TRADE GLOBALISATION Globalisation | Expansion of world trade in goods and services leading to greater international interdependence | Globalisation usually leads to: * An increase in outsourcing * Large sums of money being transferred from country to country for financing When did Globalisation First Start? There are three major stages of globalisation: Stage | When? | What? | 1 | 1870Increase in international trade | * New technology helped improve transport * Reduced cost of moving goods between countriesEnded in 1920s as countries tried to protect home industries against foreign competition so reduced imports. | 2 | 1945 End of Second World War | * Countries keen to rebuilt economies * Led to rapid expansion in world trade * International Monetary Fund and World Bank founded * Promoted trade and economic cooperation | 3 | Now | * Increase in trade and capital flows between countries * Growth of huge companies | Factors Contributing to Globalisation Improvements in transportation | Cost of transporting goods decreased (eg: due to containerisation) meaning goods can be traded competitively worldwide | Improvements to ICT | Communications are much faster and cheaper – payments can be sent between countries immediately at a low cost. Promotion of products via the internet to a worldwide market also increases world trade. | Rising real living standards |...
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... Group I As youth unemployment increases back towards the psychological one million mark as of March 2013 (Evans, 2013), there has been considerable debate among the public and the government on the reasons behind increasing youth unemployment. This essay will aim to decipher the reasons behind high youth unemployment figures and its repercussions on the state. It will accomplish this by first defining and explaining the types of unemployment and the ways in which it is measured. It will then discuss the plausible reasons followed by evaluating the effectiveness of solutions that are currently being implemented or proposed. Lastly, it will provide a value judgement on the consequences that might occur should high youth unemployment remain. Unemployment is defined as the ‘number of jobless people who want to work, are available to work, and are actively seeking employment’ (Gillespie, 2007, p.347). As of January 2013, unemployment stood at 7.8% (BBC, 2013) marking a downward trend since October 2011. Within unemployment, there is youth unemployment, defined as the ‘percentage of unemployed young people (16-24) in relation to every young person who is active in the labour market’ (ONS, 2013). As of March 2013, youth unemployment stood at 21.2%, a rising trend since August 2004 as depicted in figure 1 (Evans, 2013). Source: The Guardian, 2013 Figure 1 There are two methods of measuring unemployment from which youth unemployment figures are derived. The Claimant...
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