Qualification > Commerce
economics pastpaper doubts!
Tohru Kyo Sohma:
--- Quote from: Dasith on May 12, 2011, 01:02:09 pm ---
There are different ways of showing it , but i think the marking scheme took it this way
Total exports in 2002 = 18 (approx)
total copper exports = 7
7/ 18 x 100 = 38.8%
total exports in 2005 = 40
total coppoe xpots = 23
23/40 =57.5%
it dosent matter about the % u just hav to show how u got it !!
so as u can see its obviously from under 50% to over 50% by 2005 :D got it?
--- End quote ---
wow...i didnt think of that :-[.....thank alot :D
Dasith:
--- Quote from: mimiswift on May 12, 2011, 02:24:32 pm ---wow...i didnt think of that :-[.....thank alot :D
--- End quote ---
u r welcme :)
Tohru Kyo Sohma:
--- Quote from: Dasith on May 12, 2011, 01:35:14 pm ---k i totally suck @ writing :S , By the way heres hw i would ans the question, u might just get some points out of it...
a) i would define wat exchange rate is then ; wat floating exchange rate is how it works i.e Demand & supply for our currency in world market .(i'd jump straight to diagram because i ha8 wrting :P )
draw a diagram with elastic supply & demand for currency, explain wat is likely to happen when demand falls.
i.e to the value of our currency.Give reasons as to why it is likely to depreciate , eg reduction in tarriff or govenment encouragement to export.& explain y a elastic demand is likely to depreciate it more than an inelastic demand
Draw an exchange rate with inelastic demand.explain how a reduction in demand / supply effects exchange rate. next i might describe how demand for our currency would be reduced / supply increased .
& that might be it !!
--- End quote ---
thanx :)
Tohru Kyo Sohma:
can i have the answer to part b too
Dasith:
--- Quote from: mimiswift on May 12, 2011, 04:11:21 pm ---can i have the answer to part b too
--- End quote ---
k ,
current a/c includes visible + invisible trade( i.e services + physical goods) any factor earning or income
A current account deficit might obviously mean bad for a country as the countries exchange rate may depreciate i.e if it has floating exchange rate. This would be bad for country as the countries exports loose their value. If the country has a fixed exchange rate the government may have to finance the deficit.
It would mean a rise in government expenditure / use of foreign currency reserves/ borrowing from IMF(international monetary fund) or possible long term loans if the deficit is very large. This would be bad 4 a country because they hav to pay intrest & the loan back to borrowed country (again a outflow in long run).
However it shuld be noted that Current account is not the only part in BOP, therefore a deficit in current account might be offset by the other accounts such as capital & financial a/c.
A deficit in a current account account might not be a big problem to a country which has a high currency reserves possibly accumulated from previous surpluses in BOP. so a deficit in one year might may damage thier economy in a miour way or not damage @ all.It also depends for how long the deficit continues if its for a short period of time it might not take the attention of the government as its not such a big problem. Thaugh the BOP is one of the main objectives of the government if a country is expected to face a bop deficit , i.e if the economy is experiencing growth & there is high demand for capital goods/ better technology they may be imported causing a deficit .but they are not bad for the economy in long run.It should alos be noted that consumers may enjoy better living standerds with more imports .
Therefore it could be said that currrent a/c deficit is not a serious problem for the economy as they hav both benifits & disadvantages. It all depends on how much the deficit is & why the deficit occured.
Navigation
[0] Message Index
[#] Next page
[*] Previous page
Go to full version