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AS and A Level: UK, European & Global Economics
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How to evaluate effectively in economics
- 1 A significant proportion of marks are likely to be for evaluation. Trigger words include ‘assess’, ‘to what extent’ and ‘evaluate’. Evaluation can come during a piece as well as at the end. It includes any critical distance you add to your points.
- 2 Stating both sides of an argument or different points of view e.g. advantages and disadvantages will give you a start. Try to group them rather than a list of each. This will score more evaluation marks as you are linking the two arguments.
- 3 Discussing the long term versus the short term effects is a good method of evaluating. Don’t be frightened to acknowledge that it may even be too early to say with certainty what the outcome will be. An example of this is the impact of the UK not being in the Eurozone.
- 4 If you have made several points, you can gain evaluation marks for prioritising them or just saying which you believe is the most significant and why.
- 5 How significant will a particular point be and will it affect different groups of people in different ways. Discuss these for evaluation marks.
Five things to know about exchange rates
- 1 Most exchange rates are ‘floating’. This means that the value of one currency expressed in terms of another currency varies according to the demand and supply for and of each currency.
- 2 Factors affecting the demand for a country’s currency are the demand for the goods and services of it, the demand of its citizens for imported goods, relative interest rates and speculation. If for example, UK interest rates are relatively high, then people will buy pounds to save in UK banks. This will increase the value of the pound.
- 3 Exchange rates affect the competitiveness of a country’s products. Remember the acronym SPICED – Strong Pound Imports Cheaper Exports Dearer.
- 4 A strong pound will be worse for UK producers as they will struggle to compete with cheaper imports and UK exports will look relatively more expensive abroad. It will however be useful to reduce domestic inflation.
- 5 A weak pound will help UK producers for the opposite reason but may lead to inflation. It will help the balance of payments subject to the Marshall Lerner condition (learn this and use it for evaluation).
What is globalisation?
- 1 Globalisation refers to the increasing integration of the world’s economies meaning more international trade, increased international flows of capital, shifting patterns of consumption and production across countries e.g. outsourcing production.
- 2 Many reasons are put forward for its growth and it is hard to differentiate between its causes and effects. Is the growth of multinational companies and their desire for greater profits a cause of globalisation or its effect?
- 3 Other reasons put forward for globalisation are the reduction in trade restrictions, growth of the internet, cheaper international transport costs, opening up of China and the old communist countries. Again they could be cause or effect.
- 4 The effects of globalisation are debatable (more evaluation opportunities). Generally it is seen as increasing the level of wealth as countries specialise more in the products in which they have a comparative advantage.
- 5 Recent economic uncertainty has lead to some talk of de-globalisation where international trade declines due to increased protectionism (tariffs and quotas).
Promoting growth and fighting poverty should be the priority in the developing world, not reducing greenhouse gases do you agree?
We live in the 21st century which is a modern era, where the world is developing at faster speed than ever before and new inventions and technologies are being made every day to increase our standard of living. However there is still one problem that remains unresolved, and that is poverty. How can we be so promising to create a higher standard of living and a better life when poverty is still present and people are dying and struggling every day in order to survive.
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