No doubt you have found in your revision that many factors can influence the direction of a single economic variable. For most key issues there are many short-term and longer-term contributing factors and strong students are aware of these multiple reasons and can bring this explicitly into their answers. For example:
Unit 2: The causes of unemployment (demand and supply side causes): Click here for presentation.
Unit 2: The causes of inflation (cost push and demand pull, domestic and external): Click here for presentation.
Unit 2: Reasons behind changes in the exchange rate (trade, foreign direct investment, other capital flows, central bank intervention): Click here for presentation.
Unit 2: The many factors that the Bank of England and other central banks take into account when setting policy interest rates: Click here for presentation.
Unit 2: Causes of economic growth in both the short run and the long run (AD and LRAS causes): Click here for presentation.
Unit 1: Multiple causes of market failure and of government failure: Click here for presentation.
Unit 3: The reasons why producer cartels are often unstable: Click here for presentation.
Unit 4: The factors driving globalisation (and more recently de-globalisation): Globalisation blogs here
Examiners will always reward students who make an attempt to use relevant economic analysis and make it clear that several factors affect a particular economic variable (eg, inflation, investment spending). Often we make use of the ceteris paribus assumption to isolate in theory the effects of one variable – but the real world does not allow this to happen! Challenging the ceteris paribus assumption can also add weight and value to your answer.
We will discuss this in class....
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