Wednesday, October 7, 2015

Basic Examination Techniques for 9708/02 (CIE Economics)

Basic Examination Techniques for 9708/02

Section A-Data Response

What do you need to know?
11. Usually have 5-7 questions

22. The last question will always be 6 marks and the instruction is ‘Discuss’. This implies that candidates will have to provide analysis points, evaluations and finally a conclusion

33. Recommended time is not more than 45 minutes

44. More inclined to macroeconomic issues rather than microeconomic

55. Will most likely have ‘Table’ and ‘Figure’

66. 1 mark per explained element, unless stated otherwise
What do you need to do?
11. Invest a quality 3 or 4 minutes to run through the extract. Read analytically from line to line and from one paragraph to another. Ask more of ‘how’, ‘why’ and ‘what’ questions. Relate/ string all the information together to see if they are interconnected

22. Analyse the ‘Table’ or/ and ‘Figure’ carefully. Watch out for any trend (before and after), the direction (increase or decrease), rate of changes (faster or slower rate) and years under consideration (from when to when)

33. Provide very short answers if the instruction is:
·         a. Identify
·         b. Outline
·         c. State/ suggest
·         d. Give
      e. What other information

44. Remember TRY (Trend, Rate of change and Year) and DRY (Direction, Rate and Year) if the question requires reference to ‘Table/ Figure’

55. Candidates need to express their views with great clarity if the instruction is ‘Analyse’ and ‘Explain’

66. Provide definition(s) and diagram(s) wherever appropriate, even when the question does not ask for it

77. The’ Discuss’ question will require candidates to provide evaluative comments. A maximum of 4 marks will be awarded if the answer is one-sided. In the event where candidates run out of time, they can choose to list down the answers and if this is correctly done, they are still entitled to a max of 2 marks. Answers do not have to be symmetrical. It can be in the form of (3+3) or (2+4) or (4+2). However, it is compulsory to provide a conclusion. Candidates have three options, either to pick a more dominant side or reject both sides/ policies and suggest an alternative outcome or claim that a conclusion cannot be made unless certain information is made available
88. Popular microeconomic questions:
  a. Reason for an outward shift of PPC and its outcome
bb. Costs and benefits from the division of labour at international level

cc. Factors that can affect demand or supply

dd. Impact on equilibrium price and output when there is a change in demand/ supply condition

ee. Whether a particular good is suitable to be classified as public/ private/ merit good

f f. Economic effects of maximum price/ minimum price policy

  g. Economic effects of an indirect tax/ subsidy

99. Popular macroeconomic questions:
aa. Characteristics of a monetary union

bb. Difference between customs union and free trade area

cc. Costs and benefits of an international trade

dd. Costs and benefits of tariffs

ee. Comparative advantage and reasons why some countries are able to specialise in the production of certain goods

f f. Productivity and how it is calculated

gg    Measurement of inflation and problems involved in the construction of CPI

hh.  Demand-pull, monetary, cost-push and imported inflation

i i.  Importance of having an inflation target/ a low inflation

j j. Factors that can influence the value of an exchange rate in a free market

kk. Costs and benefits of a floating exchange rate system

l. l.   Costs and benefits of a fixed exchange rate system

 m. Information other than those in the extract which will be needed to judge the position of current account/ national economy/ productivity

Section B-Essay

What do you need to know?
11. Candidates will have to choose one pair of essays from a given option of three

22. Essay (a) will be 8 marks while (b) 12 marks. Recommended time is a maximum of 20 minutes for (a) and 30 minutes for (b)

What do you need to do?
11. Upon deciding a particular question, candidates need to be able to identify the structure of both essays:
aa. 8 marks – ‘1 part’
·         Introduction + 2 points (with diagram)/ 3 or 4 points (without diagram)

bb. 8 marks – ‘2 parts’
·         Introduction + 2 points (issue 1) + 2 points (issue 2)

cc. 12 marks – ‘1 part’
·         Introduction + 3 analysis points + 3 evaluation points + conclusion

dd.   12 marks – ‘2 parts’
·         Introduction + 2 analysis points + 2 evaluation points (issue 1) + 2 analysis points + 2 evaluation points (issue 2) + Conclusion

22. Candidates are highly recommended to provide a detailed introduction. Upon defining an economic term, try to look into the key words within each definition. Elaborate on them. Alternatively, one can also make good use of their general knowledge to impress the examiners

33    A good essay is one that has the following features:
aa.  Written in simple English

bb.  Has many short sentences

  c.  Proper use of connectives

dd. Clearly labelled and explained diagrams

ee. Wide economic vocabularies

f f. Impressive application of real world examples into their essay

44. Popular microeconomic essays:
aa.    PPC and how it can be used to illustrate any two economic ideas

bb.   Whether free market/ mixed economy is the most desirable form of economic system

cc. Whether division of labour or money contributes more to an economy

dd.   How PED can be used to determine the total revenue of a set of goods

ee.   How XED can be used to identify a complement and substitute

f f.    How YED can be used to tell whether a good is inferior or normal

gg.   Whether PED can be changed and whether it is beneficial to do so

hh. How equilibrium price and output change when there is a change in demand/ supply condition

i i.    Positive/ negative externalities of production

 jj.    Positive/ negative externalities of consumption

kk.  Costs and benefits of maximum price/ minimum price/ an indirect tax/ subsidies. May be asked to compared any two of them simultaneously

5. Popular macroeconomic essays:
aa. Comparative advantage and the limitations of theories of international trade

bb.    Costs and benefits of an international trade

cc.    Costs and benefits of trade barriers.

dd.    Whether having a current account deficit is always a cause of concern

ee.   Whether an improvement in terms of trade is always beneficial

f f. Measurement of inflation/ unemployment and the problems involved

gg.    Difference between demand-pull and cost-push inflation

hh.    Comparison between domestic and external consequences of inflation

i i. Anticipated and unanticipated inflation and its impacts

 jj.   Advantages and disadvantages of floating/ fixed exchange rate

kk.    Factors that may influence the value of an exchange rate in the money market

l l. How government can maintain a stable/ fixed/ managed-float exchange rate, using the demand and supply analysis

  m.  Interrelatedness between exchange rate, inflation and balance of payments

nn.  Whether expenditure-dampening/ switching policies or currency devaluation/ tariffs is more effective in reducing a current account deficit

Monday, April 13, 2015

Common Errors Found in Paper 1 (9708) of CIE A Level Economics

Common errors for 9708/01

Chapter 1: Basic Economic Ideas

a. Unable to distinguish between the outward shift of a PPC and movement of a point inside the PPC towards boundary
b. Unable to differentiate between a positive and a normative statement
c. Confuse between functions and characteristics of money

Chapter 2: The Price System
a. Unable to tell the difference between price elastic in demand/ high PED and price inelastic in demand/ low PED
b. Always forget the fact that goods/ services with PED = 1/ unitary PED will have the same TR even after price changes
c. Mixing up the positive (+) and negative sign (-) for XED
d. Inability to identify the direction of shifts in both demand and supply curves
e. Forget the fact that value of a subsidy or indirect tax is measured based on the vertical distance of two supply curves

Chapter 3: Government Intervention in the Price System
a. Unable to identify positive and negative externalities from a given case study
b. Unaware that the market price for demerit goods is cheap because negative externalities are not accounted for. Equally market price for merit goods is expensive because positive externalities are not factored in
c. Forget that maximum price policy will be futile if price is set above equilibrium. Likewise, minimum price policy is useless if it set below equilibrium. In both cases, price will eventually settle at original equilibrium level

Chapter 4: International Trade
a. Confuse between the features of a free trade area, custom union and economic union
b. Weak in questions involving terms of trade
c. Do not know how to interpret the tariff diagram e.g. calculating tax revenue and identifying the amount of new imports
d. Unaware that entries into the financial account also have impact onto the current account in the long run

Chapter 5: Theory and Measurement in the Macroeconomy 
a. Always misinterpret falling rate of inflation as falling prices  

Chapter 6: Macroeconomic Problems 
a. Unable to identify factors that cause demand-pull and cost-push inflation 
b. Poor reasoning skills regarding the demand and supply of a country’s currency  
Chapter 7: Macroeconomic Policies 
a. Lack of understanding of how deflationary fiscal and monetary policies actually work to reduce BOP/ current account deficit 
b. Confuse between expenditure-dampening/ reducing and expenditure-switching policies 
c. Always forget that high value of PED for exports and imports is good for the BOP/ current account