paper 3 econ

Question 1

Trade unions - Macro effects

Answer 1

-unemployment
-inflation
-International competitiveness and CA
-Growth(strikes and LRAS)
-Gov.finances

Question 2

Trade unions - Micro effects

Answer 2

-Wages and employment (competitive labour market)
-wages and employment (Monopsony)
-non-wage benefits
-higher costs for firms (higher prices and lower profits)

Question 3

Strike Action -macro effects

Answer 3

-growth and living standards
-gov. finances
-inflation

Question 4

Strike Action -micro effects

Answer 4

-wages
-non-wage benefits
-lower revenue/profits for firms

Question 5

Immigration - micro effects

Answer 5

-Wages and employment
-efficiency and productivity
-house prices

Question 6

Immigration - macro effects

Answer 6

-growth
-inflation
-Gov. finances
-living standards (public services)

Question 7

free trade -micro effects

Answer 7

-EOS
-Lower prices (surplus)
-higher quantity/choice
-tech diffusion
-higher profits

Question 8

free trade -macro effects

Answer 8

-growth
-unemployment
-inflation
-CA
-FDI

Question 9

Reasons for protectionism -micro reasons

Answer 9

-infant industry
-dumping
-standards/regulations

Question 10

Reasons for protectionism -macro reasons

Answer 10

-unemployment
-Gov.finances
-CA
-Growth

Question 11

Protectionism - Micro effects

Answer 11

-Higher prices(surplus)
-lower quantity
-domestic producer revenue
-foreign producer revenue
-inefficiency

Question 12

Weak ER - micro effects

Answer 12

-higher costs for firms and lower profits
-inefficiency
-Foreign debt burdens

Question 13

Weak ER - macro effects

Answer 13

-CA
-Growth
-Unemployment
-inflation
-FDI

Question 14

Factors that weaken a currency - macro factors

Answer 14

-lower export demand
-higher import demand

Question 15

Factors that weaken a currency - micro factors

Answer 15

-CA deficit
-poor macro performance
-lower I.R
-QE
-Outward direct investment
-speculation

Question 16

Causes of income inequality - macro causes

Answer 16

-one sector dominance
-recession
-globalisation
-Gov. policies / corrupt Gov.

Question 17

Causes of income inequality - micro causes

Answer 17

-education
-age
-capital intensive production
-technology
-flexible labour contracts
-inheritance

Question 18

consequences of income inequality - macro consequences

Answer 18

• Gov. Finances
• living standards
• asset bubbles and indebtedness (financial sector instability)
  -growth

Question 19

consequences of income inequality - micro consequences

Answer 19

-social costs
-incentive to be educated
-incentive for entrepreneurship
-incentive to work

Question 20

Policies to reduce income inequality- macro policies

Answer 20

-progressive income tax
-G on welfare (transfer payments)
-G on education/health
-universal basic income

Question 21

Policies to reduce income inequality- micro policies

Answer 21

-minimum wage
-maximum wage

Question 22

Strong ER - macro effects

Answer 22

• CA
• growth
• unemployment
  -inflation
  -FDI

Question 23

strong ER - micro effects

Answer 23

-costs and profitability for firms
-domestic producer efficiency
-lower prices
-higher choice

Question 24

interventionist policies for development - macro effects

Answer 24

• Growth
• unemployment/jobs
• LRAS benefits
• income inequality
  -Gov.finances

Question 25

interventionist policies for development - micro effects

Answer 25

- Allocative inefficiency - Gov. failure - x- inefficiency -solving market failures

Question 26

Expansionary monetary policy - macro effects

Answer 26

- growth - unemployment - inflation -trade/ CA position

Question 27

Expansionary monetary policy - micro effects

Answer 27

- impact on savers -house prices -firms costs / profitability - impact on indebted households

Question 28

contractionary monetary policy - macro effects

Answer 28

- growth -unemployment -inflation -trade/CA position - reducing systemic risk - reducing chance of credit/ asset bubbles

Question 29

contractionary monetary policy - micro effects

Answer 29

- impact on savers -house prices -firms costs /profitability -impact on indebted households

Question 30

Expansionary Fiscal policy - macro effects

Answer 30

- growth - unemployment -inflation -trade/CA position - Gov. finances

Question 31

Expansionary Fiscal policy - micro effects

Answer 31

- crowding out -solve market failures - public services impact - X -inefficiency - profits for firms

Question 32

contractionary Fiscal policy - macro effects

Answer 32

- Gov. finances (confidence/ Fiscal space) - inflation -trade -growth -unemployment -productive capacity constraints

Question 33

contractionary Fiscal policy - micro effects

Answer 33

- crowding out - public services impact - X -inefficiency - inequality