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Wednesday, 26 November 2014

Unit 3: Will OPEC cut oil supply - Cartels in action

Thanks to Mr Barfoot for this excellent article on what OPEC (an overt cartel) might do to the supply of oil, to combat the 30% fall in prices since June.

Lots of useful and relevant material for Unit 3 questions. Such as:

Price Leadership - Saudi Arabia
Cartel busters - many OPEC members
Competitive pricing - Saudi Arabia
Limit Pricing - Saudi again.

Important to read and understand........

Monday, 24 November 2014

Unit 4: Current Account - Surplus Vs Deficit

The table below shows the trade balances for eight countries. They are ranked in order from the country whose trade deficit makes up the largest percentage of its GDP  to the country whose trade surplus makes up the largest percentage of its GDP. The blue bars represent the value of the deficit or surplus of each nation. Try and think about the questions that follow this diagram.
Discussion Questions:
  1. Identify and define the four components of a nation’s current account balance.
  2. According to the data, which three countries are the most import dependent? Which three countries are the most export dependent? Which country has the most balance trade in goods and services? Which has the most imbalanced trade?
  3. For one of deficit countries above, answer the following two questions:
    1. Assuming its currencies’ exchange rates is floating, explain how persistent current account deficits will affect a country’s exchange rate over time?
    2. Summarize and explain the likely effects of a current account deficit on the following: a) the financial account balance, b) domestic interest rates, and c) national debt.
  4. For one of the surplus countries above, answer the following two questions:
    1. Assuming its currencies’ exchange rates is floating, explain how persistent current account surpluses will affect a country’s exchange rate over time?
    2. Summarize and explain the likely effects of a current account surplus on the following: a) domestic savings rates, b) the financial account balance.
  5. What are the various methods a country can take to reduce a current account deficit? What is the benefit of having a balanced current account as opposed to a large deficit or surplus?

Thursday, 20 November 2014

Unit 1 & 4: Labour Markets and pay

The ONS published the Annual Survey of Hours and Earnings today, which contains some very useful data.

For the first time, they have produced an interactive tool to help explore some of the new figures. It graphically illustrates the occupations with the highest and lowest earnings, allows the user to see which occupations have similar salaries, and incorporates a couple of quick quizzes comparing. It highlights some of the issues around gender pay gaps, different pay rates for different occupations and elasticity of supply of labour.

For example, which of these would you expect to be the highest earners:
  • Senior Police officers
  • Medical Practitioners
  • Airline pilots
  • IT directors
  • Air traffic controllers
And at the other end of the scale, which of these do you think earn the least:

  • Nursery nurses
  • Hairdressers
  • Retail cashiers
  • Bar staff
  • Cleaners

Wednesday, 19 November 2014

Unit 4: Bi-Lateral trade agreements - Australia & India

Another article from Elliot (Click here) - Useful for questions on free trade/trade blocs and protectionism.

You should think about the arguments in favour of these agreements, the benefits of bi-lateral agreements v's being in a trading bloc (EU, NAFTA, ASEAN etc).

What could the economic impact of this agreement be, both for the two countries involved and others in the area not involved.

Unit 4: Indonesia raise fuel prices by 30%

Thank you to Elliot for this interesting article on how the Indonesian government is trying to achieve certain objectives at the expense of others.

You will no doubt be aware that the main govt objectives are:

Low Inflation (Stable prices)
Low Unemployment
Sustainable Economic Growth
Healthy Balance of Trade
Strong Government fiscal position.

Governments will put certain objectives before others depending on circumstances. It ios clear that the Indonesian government (much like most of the developed world in recent years) are putting stable govt finances as a priority this year.

The question you would be asked to look at could be:

How will this policy affect the economy both in the short and the long run?

Sunday, 16 November 2014

Unit 3 & 4: Oil prices continue to fall.

Once again I am out on a school trip (sorry), so we will put on hold the work on Oligopoly and do something constructive and relevant for Unit 4.

Oil prices are likely to continue falling well into 2015, the International Energy Agency has said. 

Click here to read the article and answer the following questions:

Unit 3 - Why are oil prices falling? (8 marks)

(this could be linked to Unit 3 - supply/demand/cartel issues)

Unit 4 ; Assess the economics effect on both a developed and a developing country of the predicted fall in oil prices. (30 marks)

Wednesday, 12 November 2014

Unit 3: Lesson plan for Economics group

This message is for Luke's group. I am not in class tomorrow (Thursday P6). Please split yourselves into 3 groups.

Group A - Complete question 9 part a & b from Jun 13 paper. (it's about eggs)

Group B - Complete question 9 part a & b from Jun 12 paper. (it's about supermarkets)

Group C - Complete question 10 part a & b from Jun 11 paper. (its about Thorntons chocs)

Please leave you completed packs on my desk.

Thank you.