...Version 1 V Genera Certificate of Education (A-lev G al o vel) June 20 J 012 Econo E omics s (Spec ( cificati 21 ion 140) Unit 2 The Natio U 2: onal E Econo omy ECON N2 F al Fina Mar S eme rk Sche e Mark schemes are prepared by the Principal Examiner and considered, together with the relevant questions, by a panel of subject teachers. This mark scheme includes any amendments made at the standardisation events which all examiners participate in and is the scheme which was used by them in this examination. The standardisation process ensures that the mark scheme covers the candidates’ responses to questions and that every examiner understands and applies it in the same correct way. As preparation for standardisation each examiner analyses a number of candidates’ scripts: alternative answers not already covered by the mark scheme are discussed and legislated for. If, after the standardisation process, examiners encounter unusual answers which have not been raised they are required to refer these to the Principal Examiner. It must be stressed that a mark scheme is a working document, in many cases further developed and expanded on the basis of candidates’ reactions to a particular paper. Assumptions about future mark schemes on the basis of one year’s document should be avoided; whilst the guiding principles of assessment remain constant, details will change, depending on the content of a particular examination paper. Further copies of this Mark Scheme are available...
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...Version 1 General Certificate of Education (A-level) January 2013 Economics ECON2 (Specification 2140) Unit 2: The National Economy Final Mark Scheme Mark schemes are prepared by the Principal Examiner and considered, together with the relevant questions, by a panel of subject teachers. This mark scheme includes any amendments made at the standardisation events which all examiners participate in and is the scheme which was used by them in this examination. The standardisation process ensures that the mark scheme covers the candidates’ responses to questions and that every examiner understands and applies it in the same correct way. As preparation for standardisation each examiner analyses a number of candidates’ scripts: alternative answers not already covered by the mark scheme are discussed and legislated for. If, after the standardisation process, examiners encounter unusual answers which have not been raised they are required to refer these to the Principal Examiner. It must be stressed that a mark scheme is a working document, in many cases further developed and expanded on the basis of candidates’ reactions to a particular paper. Assumptions about future mark schemes on the basis of one year’s document should be avoided; whilst the guiding principles of assessment remain constant, details will change, depending...
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...his advisors urged Johnson to increase taxes, he didn’t think he could get the votes to support it. While Johnson avowed to create a Great Society and eliminate poverty in American, the biggest item in the federal budget was not war on poverty…it was the war in Vietnam. Because Vietnam was unpopular, he wanted a silent, invisible war and so, therefore, he did not want to raise taxes. He wanted to have the domestic programs and he wanted to be able to run the war as well. The stage was set for the surge of inflation. In the absence of a tax increase or any other effective restraint, consumers and businesses kept spending. At the same time the government kept spending, so businesses operated close to capacity and labor approached full-employment. To meet the demands of the marketplace, expensive new factories had to be built and competition for workers bid up wages. In short, the demand exceeded the economy’s ability to supply and everything began to cost more. Comment & Analysis by Richard Gill In the 1960’s we had a classic go-go economy. Consumer demand ran at a feverish pitch as did government spending. The "Great Society" programs of Lyndon Johnson had been launched, as was the Vietnam War. Suddenly demand was given a big shot in the arm and the aggregate demand curve shifted up. The total effect of the increasing demand went into higher prices. Americans were...
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...resources. | c. | most people in poorer countries do not have enough goods. | d. | goods are so expensive that only the rich can afford it. | ANS: B PTS: 1 DIF: Easy REF: Full: 3 | Mic: 3 TOP: Scarcity TYP: RE 2. When economists say goods are scarce, they mean: a. | consumers are too poor to afford the goods and services available. | b. | consumers are unwilling to buy goods unless they have very low prices. | c. | goods are generally freely available from nature in most countries. | d. | the desire for goods and services exceeds our ability to produce them with the limited resources available. | ANS: D PTS: 1 DIF: Medium REF: Full: 3 | Mic: 3 TOP: Scarcity TYP: SA 3. Scarcity is a problem: a. | measured by the amount of goods available. | b. | of the poor, but not the rich. | c. | because human wants are unlimited while resources are limited. | d. | only in industrialized economies. | ANS: C PTS: 1 DIF: Easy REF: Full: 3 | Mic: 3 TOP: Scarcity TYP: RE 4. Scarcity can be eliminated if: a. | people satisfy needs rather than wants. | b. | sufficient new resources were discovered. | c. | output of goods and services were increased. | d. | none of these. | ANS: D PTS: 1 DIF: Easy REF: Full: 3 | Mic: 3 TOP: Scarcity TYP: RE 5. Scarcity is a(n): a. | problem only in industrialized economies. | b. | condition measured by the quantity of goods available....
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...The Impact of Monetary Policy on Economic Growth and Inflation in Sri Lanka C.Amarasekara 1 Abstract Based on a vector autoregressive (VAR) framework and utilising both recursive and structural specifications, this study analyses the effects of interest rate, money growth and the movements in nominal exchange rate on real GDP growth and inflation in Sri Lanka for the period from 1978 to 2005. The results of the recursive VARs are broadly in line with the established empirical findings, especially when the interest rate is considered the monetary policy variable. Following a positive innovation in interest rate, GDP growth and inflation decrease while the exchange rate appreciates. When money growth and exchange rate are used as policy indicators, the impact on GDP growth contrasts with established findings. However, as expected, an exchange rate appreciation has an immediate impact on the reduction of inflation. Interest rate innovations are persistent, supporting the view that the monetary authority adjusts interest rates gradually, while innovations in money growth and exchange rate appreciation are not persistent. Several puzzling results emerge from the study: for most sub-samples, inflation does not decline following a contractionary policy shock; innovations to money growth raises the interest rate; when inflation does respond, it reacts to monetary innovations faster than GDP growth does; and exchange rate appreciations almost always lead to an increase in GDP growth. The...
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...ECON 1020-06 November 02, 2010 The Macroeconomic Goals The macroeconomic goals are very important to be met in order to have a stable economy. The main goals are full employment, low inflation, economic growth, and international trade. These are the most significant goals that need to be achieved to make the economy in a good condition. Full employment is very essential factor in macroeconomic goals. The population is divided into people who are in the labor force and people who are not. The labor force is simply means the employed people, who are currently working to get paid, and the unemployed people, who are actively seeking for a work recently. As long as the unemployed rate increases, we waste resources. The people who are not in the labor force are for example people who are in the jail, hospital, military, full time students, elderly, or discouraged workers. On The U.S. Bureau of Labor Statistics website, it states that the unemployment rate is 9.6 percent. This percent is high and it causes high waste in the resources because people are trying to find a work, however, they do not find it. Therefore, we are not meeting full employment goal because the unemployment rate is high. The rate of women who are unemployed is 8 percent because women take care of the children and house. Unemployment can be caused because seasonal, frictional, structural, or cyclical reasons. For instance, the stores that sell Christmas goods employ more workers in this season...
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...annual Growth Domestic Product (GDP) growth of 9.10%. China has been an economic power house since the 70s, and ranked the 2nd largest economy in the world ever since. Presently, the Central Bank of China has adopted a Long Term Economic Policy, designed to reduce rural-urban income inequality, reduce centralized planning and to attract Foreign Direct Investments (FDIs) to boost their economy growth. China has also adopted several trade policies to liberalize their economy to encourage global trade. This will not only benefit the country, but the rest of the world consequently. This essay will attempt to analyze the performance trend of China’s economy with the consideration of the Production output performance analysis, Labour market analysis and Price level analysis. GDP growth rate Fig 1a) China’s annual GDP growth rate from 2004 – 2014 (Tradingeconomics.com, 2014). As shown in Fig 1a), China is seen to have a positive economic growth from 2004-2014 and a spike in it’s growth rate in 2007 before the global financial crisis in 2008. China then took a steep fall in 2008-2009 to 6.3% GDP per annual. The reason behind the plummet is due to capital flight of American Multinational Co-operations from the Chinese Economy due to the lost in investor confidence and the instability of their home country The cause of China stock market crashing was due to the sudden pull out of western partners (Bank of America, UBS, RBS, etc) , by selling their minority stocks to retrieve capital...
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...Topics 1. tax, ceiling/floor price ⁃ describe and make short analysis + preposition(s) about the impact of tax on cigarretes product (don’t forget to use elasticity in your analysis). 2. national income/economic growth, employment/unemployment, price/inflation ⁃ pick any developing country as the object of observation and describe + analise it’s condition using its national income, employment/unemployment, & its price index/inflation from time to time. It is better if you compare this country’s economic condition with a realtively developed country. Hint: visit World Bank website to access these data. 3. money & inflation ⁃ collect the M1 and inflation data for a country (any country), and analyse the periodes where it had relatively high rate of inflation and compare it with the periodes when it had relatively low and stable inflation rate. Explain those periods using comparison of V, M1 growth and inflation. 4. financial institution: saving & investment ⁃ Collect these data for any country: GDP , Investment, Saving, Tax Revenue, Government Spending. Assume it has a close economy system. Describe and analyse shortly about those data. Does that country has surplus of private and public saviing? What are your prepositions? Note: you should also check the country’s official budget (it’s called APBN for Indonesia). 5. open economy: exchange rate system, government policy (tax imports/exports, quota) ⁃ Describe and analyse how an exchange rate system...
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... It is said that people have unlimited wants, but limited resources NEED Is something that is necessary for survival (such as food and shelter) SCOPE OF ECONOMICS TWO MAJOR BRANCHES OF ECONOMICS MACROECONOMICS Examines either the economy as a whole or its basic subdivisions or aggregates, such as the government, household, and business sectors MICROECONOMICS Looks at specific economics units. At this level of analysis, the economist observes details of an economics unit, or very small segment of the economy ANALYTICAL TOOLS AND M ETHODOLOGY USED IN ECONOMICS rational self-interest means that given a certain condition, individuals try to minimize the expected cost for a benefit or maximize the expected benefit with a cost. Opportunity cost It is cost associated with opportunities that are foregone when a firms resources are not put to their best alternative is one of the most frequently used tools for modern economic analysis, deriving many important economic theories and models. It is also a powerful tool in analyzing individual decision-making process. Whoever you are, an individual, a company or a nation, you face opportunity cost when making decisions. A second key...
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...1 to 9 Class, you have been assigned into teams of 4 or 5. You need to discuss amongst yourselves how the duties of the assignment will be divided and the manner in which it will be presented to me. Working together will ensure that all parts will be done well and on time. Question 1: Overview of the Macroeconomy: Interpretation (25 marks) Please discuss the current state of the macroeconomy in Canada. In particular please discuss the growth rates and gross domestic product, the unemployment rate and lastly inflation. Please discuss how these variables compare to both the short and long run averages. In providing answers, please provide where data was obtained. You can use the internet or more authorative sources such as the Bank of Canada, Statistical Canada (Cansim) dataset or the IMF/World Bank websites. After you have ascertained this information, please make a determination as to whether the economy is at its long run equilibrium level (full employment), or whether it is in a recessionary or expansionary gap. (Hint: the economy is rarely at its long run level). Question 2: Legislative Overview (15 Marks) Please discuss 2 important institutions in Canada responsible for conducting fiscal and monetary policy, name the Department of Finance and the Bank of Canada. What are the roles of each and what are each responsible for obtaining? What are the responsibilities of each institution and what tools do they have at their disposable to impact the economy...
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...Lessons 1 to 9 Class, you have been assigned into teams of 4 or 5. You need to discuss amongst yourselves how the duties of the assignment will be divided and the manner in which it will be presented to me. Working together will ensure that all parts will be done well and on time. Question 1: Overview of the Macroeconomy: Interpretation (25 marks) Please discuss the current state of the macroeconomy in Canada. In particular please discuss the growth rates and gross domestic product, the unemployment rate and lastly inflation. Please discuss how these variables compare to both the short and long run averages. In providing answers, please provide where data was obtained. You can use the internet or more authorative sources such as the Bank of Canada, Statistical Canada (Cansim) dataset or the IMF/World Bank websites. After you have ascertained this information, please make a determination as to whether the economy is at its long run equilibrium level (full employment), or whether it is in a recessionary or expansionary gap. (Hint: the economy is rarely at its long run level). Question 2: Legislative Overview (15 Marks) Please discuss 2 important institutions in Canada responsible for conducting fiscal and monetary policy, name the Department of Finance and the Bank of Canada. What are the roles of each and what are each responsible for obtaining? What are the responsibilities of each institution and what tools do they have at their disposable to impact the economy...
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...article, project or month - Get started for free Full Version unlimited access with print and download $ 37 00 Trial Access read full document, no print or download, expires after 72 hours $ 4 99 More infoBuy Share Share with Twitter Share with Facebook Share with LinkedIn Search 150 million articles from 12,000 publications Social Sciences > Economics Essays on monetary policy and currency unions: The case of the East African Community ProQuest Dissertations and Theses, 2011 Dissertation Author: John M. M Ssozi Abstract: Efficient conduct of monetary policy in a currency union demands that partner states have similar business cycles, inflation convergence and strong economic ties. The first essay investigates inflation convergence, which is important for a number of reasons: avoiding inflation bias and is an indicator of structural similarities. The essay goes beyond the traditional pairwise unit root tests and applies an unobserved dynamic factor model to test asymmetry in inflation variation. Convergence is measured by the percentage of variation in inflation that is common across countries. The results suggest inflation convergence in the EAC. The main contribution of this essay is the use of an unobserved component model to estimate the degree of inflation convergence in the EAC. The second essay investigates the degree of business cycle synchronization and the evolution of synchronization over time. Inflation divergence is an indicator of structural differences...
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...Introduction Singapore is an economically well-developed country; it enjoys a remarkably open and corruption free environment, stable price and a GDP per capita that is higher than most developed countries. Singapore depends heavily on exports, particularly in technology and biomedical, and services provide the main source of revenue for its economy. Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue to establish itself as Southeast Asia’s financial and high tech hub. A Production Output Performance Analysis, Labour Market Analysis and Price Level Analysis will be provided from the viewpoint of Singapore’s economy to assess the performance trends over the past 10 years and what measures Singapore government has taken to achieve such performance. Production Output Performance Analysis The graph above shows Singapore GPD at constant prices The graph above shows Singapore GDP annual growth rate The graph above shows Singapore GDP per capita based on PPP Singapore has strong economic growth since 2004 after adapting to several shocks which include the global economic slowdown in 2001, the outbreak of SARS and the Iraq war in 2003, which affect tourism badly Singapore has a GDP growth of average 8.6% from 2004-2007. The economy contracted 0.6% in 2009 due to financial crisis, but rebounded 15.2% in 2010 on the strength of renewed exports, before slowing to 6.0% in 2011, 2.5% in 2013 and 3.8% in 2013, largely due...
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...to rehabilitate the plant be included in the analysis? Question 3 Suppose another citrus producer had expressed an interest in leasing the lite orange juice production site for $25,000 a year. If this were true (in fact, it was not), how would that information be incorporated into the analysis? Question 4 What is Indian River's Year 0 net investment outlay on this project? What is the expected non-operating cash flow when the project is terminated at Year 4? Question 5 Estimate the project's operating cash flows. What are the project's NPV, IRR, modified IRR (MIRR), and payback? Should the project be undertaken? Question 6 Now suppose the project had involved replacement rather than expansion of existing facilities. Describe briefly how the analysis would have to be changed to deal with a replacement project. Question 7 Assume that inflation is expected to average 5 percent per year over the next four years. a. Does it appear that the project's cash flow estimates are real or nominal? That is, are the cash flows stated in constant (current year) dollars, or has inflation been built into the cash flow estimates? (Hint: Nominal cash flows include the effects of inflation, but real cash flows do not.) b. Is the 10 percent cost of capital a nominal or a real rate? c. Is the current NPV biased, and, if so, in what direction? Question 8 Now assume that the sales price will increase by the 5 percent inflation rate beginning after Year 0. However, assume that...
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...HAIGAZIAN UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION & ECONOMICS FIN 233 : Commercial Banking Mr. Garabed Boghossian Article Report – 30/10/2013 “Draghi’s Next Move Seen Easing Liquidity as Rates on Hold”-By Jana Randow & Andre Tartar – October 10, 2013 Prepared By: Varanth Boyadjian • Sahag-Grag Pailian • Shant Kupjian • Outline: * Introduction * The European Central Bank (ECB) * Body * Summary of the Article * Analysis * Monetary Policy of the ECB * Interest Rate * The Impact of Interest Rate on: * Inflation * Liquidity * Gross Domestic Product (GDP) * Unemployment * How to Ease the Liquidity * Print more Euros (€) * ECB Buying of Government Bonds * New Governmental Institutions * Decrease of Reserve Requirements * ECB Buying Corporate Bonds * Recommendations * Bibliography Introduction: The European Central Bank (ECB): The European central bank was formed in Frankfurt, Germany in 1988. The ECB is responsible for the monetary system of the euro currency and it consists of 17 European countries. The European central bank works with the other national banks of each of the European Union members to formulate monetary policy that helps maintain the euro’s purchasing power. The responsibilities of the ECB are to formulate monetary policy, conduct foreign...
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