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A2 ECONOMICS: Guess Paper-4

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2pac

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MnMz said:
Use quantity theory of money ...
where money supply is directly related to average price level...
And that V & Y are directly related to the money supply
Hence the output will be the difference between them
Keynesians believe that and increase in money supply causes and increase in output (hence it shld be a positive output)
Click to expand...
thanks,really appreciate the effort.Didn't understand much though,will practice some more to get the hang of it.
 
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MnMz

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memyself said:
Thats a relief :D

Sir could u summarise on the basic keynasian/monetarist beliefs of how the economy works, please? Qamar Baloch

Or somebody else?
Click to expand...

Well that's what I know
Keynesians believe that:
- Markets do not clear and are slow to adjust, eg. labour market. This means the economy can settle in equilibrium below full employment, so cyclical or involuntary unemployment exists.
- the Government should intervene to stabilise the economy
-fiscal policy is more effective than monetary policy
- inflation is often cause by cost push factors

Monetarists believe that:
- that inflations is due to the money supply growing faster than output growth. Reducing the rate of growth of the money supply will lead to less inflation without more unemployment (in the long run)
- prices and wages change quite quickly. so the economy tends to move towards full employment
- inflation makes firms incompetitive, discourages investment, and so governments must control inflation. To do this they must control the money supply. Apart from this, the government should intervene very little.
- Markets adjust fairly quickly. An increase in the money supply amd therefore demand will lead to some fall in unemployment in the short run. Similarly, a sharp reduction in the money supply may cause unemployment in the short run.
 
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sonamali

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h
MnMz said:
2. question .... for $6 there wld be a marginal utility of 12...Hence...then u need to find the units with the difference of 12
Hence D...5 units...because it gave rise to 12 more units :D
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thank u. how about no. 23?
 
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MnMz

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sonamali said:
h
thank u. how about no. 23?
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use the concept of credit multiplier here. Just divide 200 by 20% this will give you the total bank deposits. Out of the 1000 bank will be able to generate loans from 800 since 200 was provided by u. So deposit as a whole increase by 1000 and bank loan by 800.
 
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2pac

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sonamali said:
may june 10/31 no. 20! help someone!
http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Economics (9708)/9708_s10_qp_31.pdf
Click to expand...
I am not sure if I am correct but this method helped me get the correct answer.The economy wants to reach 50k million and at the moment is operating at 40k m.This means it requires another 10k m to reach the 50k m.The multiplier formula is 1/mpc,so add all the leakages,it comes up to 0.5.
1/0.5=2. Now divide the required value for increment to 50k m which is 10k m and divide by it 2.The answer will be 5k m and so therefore since the govt spending was 15k m,it will increase by 5k m and therefore be 20k m.
Not sure about this method but I hope you understood it.
 
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sonamali

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2pac said:
I am not sure if I am correct but this method helped me get the correct answer.The economy wants to reach 50k million and at the moment is operating at 40k m.This means it requires another 10k m to reach the 50k m.The multiplier formula is 1/mpc,so add all the leakages,it comes up to 0.5.
1/0.5=2. Now divide the required value for increment to 50k m which is 10k m and divide by it 2.The answer will be 5k m and so therefore since the govt spending was 15k m,it will increase by 5k m and therefore be 20k m.
Not sure about this method but I hope you understood it.
Click to expand...
thanks!
 
memyself

memyself

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sonamali said: ↑
I am not sure if I am correct but this method helped me get the correct answer.The economy wants to reach 50k million and at the moment is operating at 40k m.This means it requires another 10k m to reach the 50k m.The multiplier formula is 1/mpc,so add all the leakages,it comes up to 0.5.
1/0.5=2. Now divide the required value for increment to 50k m which is 10k m and divide by it 2.The answer will be 5k m and so therefore since the govt spending was 15k m,it will increase by 5k m and therefore be 20k m.
Not sure about this method but I hope you understood it.
Click to expand...

Check this out, naheelnisar, its a similar question
 
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Fazila

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Can some one send me a link of 2002 oct/nov ppr3 marking scheme plzzz !
And is there mauy/june ppr3 anywhere ?
 
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Sir Please explain this question
Q)To increase its labour force from 50 to 51 workers, a firm has to increase the daily wage rate from
$600 to $610.
What is the marginal cost of labour per day?
A $10 B $510 C $610 D $1110
 
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MnMz

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mariam_anwar said:
Sir Please explain this question
Q)To increase its labour force from 50 to 51 workers, a firm has to increase the daily wage rate from
$600 to $610.
What is the marginal cost of labour per day?
A $10 B $510 C $610 D $1110
Click to expand...

It will be the difference between the old wage paid and the new wage paid

(51*610) - (50*600) = 1110
 
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