When demand is price inelastic, the tax causes only a small fall in demand. This is what we mean by evaluation. What is the impact of higher interest rates? Answer the question Quite frequently, when marking economic essays, you see a candidate who has a reasonable knowledge of economics, but unfortunately does not answer the question.
It helps to keep reminding yourself of the question as you answer. Nothing is wasted in the above example. Time lags — it may take 18 months for interest rates to have an effect Depends on other variables in the economy.
Also, consumers have less incentive to borrow and spend on credit cards. The main thing is to avoid combining too many ideas into one sentence. Higher investment could be offset by fall in consumer spending.
Depends on market structure If markets are competitive, then we can expect prices to remain low. However, if a firm has monopoly power, then we can expect higher prices.
AD3 to AD3 Micro-evaluation 1. Behavioural economics In economics, we usually assume individuals are rational and seeking to maximise their utility. Examine the macroeconomic implications of a significant fall in UK House prices, combined with a simultaneous loosening of Monetary Policy.
AD falls from AD1 to AD2 However, if there is already a slowdown in the economy, rising interest rates may cause a recession. Most students will have revised a question on: For example, expansionary fiscal policy can help to reduce demand-deficient unemployment, however, it will be ineffective in solving demand-side unemployment e.
The impact depends on elasticity of demand In both diagrams, we place the same tax on the good, causing supply to shift to the left. If the economy is close to full capacity a rise in interest rates may reduce inflation but not reduce growth. Write in simple sentences For clarity of thought, it is usually best for students to write short sentences.
If necessary, you can write a one-sentence summary, which directly answers the question. If you write in short sentences, it may sound a little stilted; but it is worth remembering that there are no extra marks for a Shakespearian grasp of English.
However, if a firm is seeking to maximise market share, it may seek to cut prices — even if it means less profit. I could have combined 1 or 2 sentences together, but here I wanted to show that short sentences can aid clarity of thought. As a result, those with mortgages will have lower disposable income.
If demand is price elastic, the tax causes a bigger percentage fall in demand. Therefore, as a result, they can get zero for a question. A fall in AD will also reduce inflation. However, if confidence is high, higher interest rates may not actually discourage consumer spending.
Depends on business objectives If a firm is seeking to maximise profits, we can expect prices to rise. This may explain over-consumption of demerit goods and under-consumption of merit goods. Discuss the impact of Euro membership on UK fiscal and monetary policy? Consider the impact on all macroeconomic objectives.
This fall in consumption will cause a fall in Aggregate Demand and therefore lead to lower economic growth. Bear in mind, failure to answer the question can lead to a very low mark. It is important that we always consider other points of view, and discuss various different, potential outcomes.
However, this question is quite specific; it only wishes to know the impact on fiscal and monetary policy. The significance of factors.GCE A Level Economics Essay Library [Redspot Publishing] on polkadottrail.com *FREE* shipping on qualifying offers.
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SKU: n/a ৳ Add to cart. Economics, Economics, Redspot Redspot GCE A Level Economics Hotspots. Economics, Economics, Redspot. In the Singapore-Cambridge GCE ‘A’ Level Economics (H2), the essay paper accounts for 60 per cent of the total marks.
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A university-level paper is usually evaluated in terms of several key characteristics. If it fulfills all of these characteristics, it will receive an “A”; if it falls short in one or more areas, the grade drops accordingly.Download