Role Of Financial Markets

Financial markets - buyers and sellers can buy and trade a range of services or assets that are fundamentally monetary in nature.

Financial markets exist:
1) To meet the demand for services (such as saving/borrowing, from individuals, businesses and the government)
2) To allow speculation and financial gains

Roles of the financial market include:
1) To facilitate savings - providing somewhere for consumers/firms to store their funds. Savings are rewarded with interest payments from the bank.

2) To lend to businesses and individuals - allows for consumption and investment. The transfer of funds between agents is aided by financial markets. The funds can be used for investment or consumption.

3) To facilitate the exchange of goods and services - the transfer of real economic resources is facilitated in a financial market. Financial markets can make it easier to exchange goods and services from the physical market, by providing a way that buyers and sellers can interact and transfer funds.

4) To provide forward markets in currencies and commodities - in currency markets, speculative attacks can occur which can affect the value of the exchange rate. In commodity markets, investors trade primary products (such as wheat, gold and oil). Future contracts are a method for investing in commodities and involves buying/selling an asset with an agreed price in the present, but a delivery and payment in the future. A forward market is an informal financial market where these contracts for future delivery are made.

5) To provide a market for equities - Equity markets (also known as stock markets) involve the trade of shares. Issuing shares allows companies to finance expansion but people would be unlikely to buy shares if they were unable to sell them on in the future. Returns on the investment, usually in the form of dividends, are based on future performance. A dividend is a share of the firm’s profits.  Financial markets provide the ability for shares to be sold on in the future, making the asset more appealing.

Crime & Deviance Exemplars

Outline two ways in which gender may influence the risk of being a victim of crime. (4 Marks)
Females are more often at risk of domestic violence since they are financially dependent on their partner and for transgender people they are more likely to be victims of violence due to transphobia.

Outline three criticisms of the labelling theory of crime and deviance. (6 Marks)
It ignores the possibility that labelling can reduce crime as reintegrative shaming avoids stigmatising the offender by condemning the deviant act performed instead of the offender.

Applying material from Item B and your knowledge, evaluate sociological contributions to our understanding of the relationship between crime and the media. (30 Marks) 

Item B: Much media output is devoted to crime but the media offer a distorted portrayal of crime and criminals. The media are also often seen as causing crime, for example by creating a sense of relative deprivation or causing moral panics. The new media also provide opportunities both for committing crime and for policing it.

Applying material from Item B and your knowledge, evaluate sociological contributions to our understanding of the relationship between crime and the media. (30 Marks) 

Item B: Much media output is devoted to crime but the media offer a distorted portrayal of crime and criminals. The media are also often seen as causing crime, for example by creating a sense of relative deprivation or causing moral panics. The new media also provide opportunities both for committing crime and for policing it.

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Paper

Click To Download PDF Version

1A) Which one of the following would be most likely to cause an increase in credit card lending? (1 Mark)

A) A fall in interest rates
B) A fall in investment
C) An increase in the deficit on the current account of the balance of payments
D) An increase in savings

1B) Using the chart, calculate an index number for additions to credit card lending in March 2017, using January 2016 as the base. You are advised to show your working. (2 Marks)

1C) Explain one possible link between an increase in credit card lending and the rate of inflation. (2 Marks)

2) The International Monetary Fund has called on the G20 group of large industrialised countries to boost government spending on infrastructure.

A) Draw an aggregate demand and aggregate supply diagram to show the likely impact of n increase in government spending on infrastructure on a country's price level and real output. (2 Marks)

B) Which one of the following would be an example of government spending on infrastructure. (1 Mark)

A) Construction work on new railway lines
B) Interest payments on the national debt
C) Salaries for teachers
D) Unemployment benefit payments

3) Unit labour costs for selected European countries

A) Explain one likely reason for Estonia's unit labour costs rising faster than in other European countries. (2 Marks)

B) Explain the impact of rising unit labour costs on Estonia's economy. (2 Marks)

C) The increase in Austria's unit labour costs between 2010 and 2017 is: (1 Mark)

A) 3%
B) 11.3%
C) 13%
D) 113%

4) The UK Government is planning to cut the rate of corporation tax on all pre-tax profits of companies to 17% by 2020.

A) This would be an example of: (1 Mark)

A) A contractionary monetary policy
B) An exchange rate policy
C) An expansionary monetary policy
D) A supply-side policy

B) If a company makes £500,000 pre-tax profit in 2020, calculate how much corporation tax it will pay. Assume that the government cuts the rate of corporation tax as planned (2 Marks)

C) Explain one possible reason why the revenue from corporation tax could increase if the government cuts the rate of tax. (2 Marks)

5) According to the charity Oxfam, the combined wealth of the 62 richest people in the world is the same as the wealth of the poorest half of the world's population. The value of the combined wealth of the poorest half of the world's population has fallen by 38% between 2010 and 2016.

A) Explain the distinction between income and wealth. (2 Marks)

B) Explain one likely reason why global wealth inequality has increased. (2 Marks)

C) Which one of the following would be most likely to reduce the level of inequality in the country? (1 Mark)

An increase in:
A) Import tariffs
B) Progressive taxes
C) Regressive taxes
D) Value added tax

6) The International Monetary Fund has called on the G20 group of large industrialised countries to boost government spending on infrastructure.

A) With reference to Extract A, explain the role of forward markets in currencies. (5 Marks)

B) With reference to Extract A and Figure 1, examine the likely impact of the change in the sterling exchange rate on the UK economy. (8 Marks)

C) With reference to the last paragraph in Extract C, assess the impact of a fall in real incomes on subjective happiness. (10 Marks)

D) With reference to Extract C, discuss the potential conflicts between macroeconomic objectives when the central bank attempts to control inflation. (12 Marks)

E) Discuss whether providing substantial government financial support to banks is the best policy response during a financial crisis. (12 Marks)

English Literature Papers/Exemplars/Mark Schemes

Past AQA English Literature A-Level Papers:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Past AQA English Literature A-Level Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Past AQA English Literature A-Level Mark Schemes:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Past AQA English Literature A-Level Papers:

Past AQA English Literature A-Level Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Othello Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

A Streetcar Named Desire Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Mrs Dalloway Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Wuthering Heights Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Poems Of The Decade Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

The Romantics Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Economics Papers/Exemplars/Mark Schemes

Past Edexcel Economics A-Level Papers:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Paper

Past Edexcel Economics A-Level Exemplars:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Past Edexcel Economics A-Level Mark Schemes:

2019 Edexcel Economics A: Paper 2 (The National & Global Economy) Exemplar

Click To Download PDF Version

1A) Which one of the following would be most likely to cause an increase in credit card lending? (1 Mark)

A) A fall in interest rates
B) A fall in investment
C) An increase in the deficit on the current account of the balance of payments
D) An increase in savings

An increase in the deficit on the current account of the balance of payments (B) would be most likely to cause an increase in credit card lending?

1B) Using the chart, calculate an index number for additions to credit card lending in March 2017, using January 2016 as the base. You are advised to show your working. (2 Marks)

(15,000 ÷ 13,000) X 100 = 115

1C) Explain one possible link between an increase in credit card lending and the rate of inflation. (2 Marks)

(15,000 ÷ 13,000) X 100 = 115

2) The International Monetary Fund has called on the G20 group of large industrialised countries to boost government spending on infrastructure.

A) Draw an aggregate demand and aggregate supply diagram to show the likely impact of n increase in government spending on infrastructure on a country's price level and real output. (2 Marks)















B) Which one of the following would be an example of government spending on infrastructure. (1 Mark)

A) Construction work on new railway lines
B) Interest payments on the national debt
C) Salaries for teachers
D) Unemployment benefit payments

An example of government spending on infrastructure would be (A) construction work on new railway lines

3) Unit labour costs for selected European countries

A) Explain one likely reason for Estonia's unit labour costs rising faster than in other European countries. (2 Marks)

(15,000 ÷ 13,000) X 100 = 115

B) Explain the impact of rising unit labour costs on Estonia's economy. (2 Marks)

(15,000 ÷ 13,000) X 100 = 115

C) The increase in Austria's unit labour costs between 2010 and 2017 is: (1 Mark)

A) 3%
B) 11.3%
C) 13%
D) 113%

The increase in Austria's unit labour costs between 2010 and 2017 is (C) 13%.

4) The UK Government is planning to cut the rate of corporation tax on all pre-tax profits of companies to 17% by 2020.

A) This would be an example of: (1 Mark)

A) A contractionary monetary policy
B) An exchange rate policy
C) An expansionary monetary policy
D) A supply-side policy

The increase in Austria's unit labour costs between 2010 and 2017 is () a policy.

B) If a company makes £500,000 pre-tax profit in 2020, calculate how much corporation tax it will pay. Assume that the government cuts the rate of corporation tax as planned (2 Marks)

(£500,000 ÷ 100) X 17 = £85,000

C) Explain one possible reason why the revenue from corporation tax could increase if the government cuts the rate of tax. (2 Marks)

Still in progress

5) According to the charity Oxfam, the combined wealth of the 62 richest people in the world is the same as the wealth of the poorest half of the world's population. The value of the combined wealth of the poorest half of the world's population has fallen by 38% between 2010 and 2016.

A) Explain the distinction between income and wealth. (2 Marks)

Still in progress

B) Explain one likely reason why global wealth inequality has increased. (2 Marks)

Still in progress

C) Which one of the following would be most likely to reduce the level of inequality in the country? (1 Mark)

An increase in:
A) Import tariffs
B) Progressive taxes
C) Regressive taxes
D) Value added tax

The most likely to reduce the level of inequality in the country is () a policy.

6) The International Monetary Fund has called on the G20 group of large industrialised countries to boost government spending on infrastructure.

A) With reference to Extract A, explain the role of forward markets in currencies. (5 Marks)

Still in progress

B) With reference to Extract A and Figure 1, examine the likely impact of the change in the sterling exchange rate on the UK economy. (8 Marks)

Still in progress

C) With reference to the last paragraph in Extract C, assess the impact of a fall in real incomes on subjective happiness. (10 Marks)

Still in progress

D) With reference to Extract C, discuss the potential conflicts between macroeconomic objectives when the central bank attempts to control inflation. (12 Marks)

Still in progress

E) Discuss whether providing substantial government financial support to banks is the best policy response during a financial crisis. (12 Marks)

Still in progress

Right Realism

Right realism believes that crime is a real problem which requires even minor crimes to be dealt with rigorously through policies such as zero tolerance in order to maintain social order.

Zero tolerance policy.

Causes of crime:

2017 AQA Crime & Deviance With Theory & Methods

) Outline three functions that crime and deviance may perform (6 Marks)
One function that crime and deviance may perform is boundary maintenance. It allows the moral values of society to be reinforced

1) Adam Smith famously described the concept of the division of labour using the example of a pin factory in Glasgow, in which the division of labour allowed production of pins per person to rise 24,000%.

A) Explain the term “division of labour”. (3 Marks)
Division of labour is the production process being broken down into a number of tasks, with each task being performed by a different worker. In the pin factory, quality control and packaging would be done in different stages by different workers who are specialised at that particular job, henceforth increasing productivity through higher specialist skill.

B) The division of labour in an economy requires the use of money so that goods and service can be traded. Which of the following is not a function of money? (1 Mark)

A: A store of value
B: A standard of deferred payment
C: A method of barter
D: A measure of value

One of the functions of money does not include C (a method of barter)

2) The diagram below shows a production possibility frontier for an economy.

A) Define the term “opportunity cost”. (2 Marks)

B) The opportunity cost of a movement from point X to point Y is: (1 Mark)

A: 60 units of capital goods
B: 70 units of consumer goods
C: 20 units of consumer goods
D: 100 units of capital goods

The opportunity cost of a movement from point X to point Y is C (20 units of consumer goods)

C) Indicate an inefficient point of production on Diagram A above, using the letter Z. (1 Mark)
Any point marked Z inside the PPF is correct

3. In April 2015, Barack Obama (President of the USA) and Raul Castro (President of Cuba) shook hands at a meeting, the first hand-shaking between an American president and a Cuban president since the early 1960s, when Cuba became a command economy.

A) Explain the term “command economy”. (3 Marks)

B) Which of the following is not a characteristic of a free market economy? (1 Mark)

A: 60 units of capital goods
B: 70 units of consumer goods
C: 20 units of consumer goods
D: 100 units of capital goods

The opportunity cost of a movement from point X to point Y is C (20 units of consumer goods)

Contestability

1) Using examples, explain the term 'sunk cost'. (3 Marks)

2) With reference to the pharmaceutical industry analyse why the following are significant barriers to entry:

A) Economies of scale (3 Marks)

B) Brand loyalty (3 Marks)

C) Patents (3 Marks)

3) Explain the likely impact on a firm's pricing of its market becoming more contestable (4 Marks)

4) Read the following

Extract A
Mobile phone apps
It is estimated that in 2015, over 180 billion smartphone apps will be downloaded, with over 1.5 million apps available on both the Apple App Store and Google Play. Every week over 15,000 new apps are launched, as firms take advantage of the relatively low entry costs. Apps make programs that were once only available on PCs available to smartphone users too. They include programs such as Facebook, streaming radio and, of course, the game Angry Birds.

However, revenue gained from apps is concentrated among a few developers. In the USA, for example, 25 developers accounted for half of all app revenue, most of these being gaming apps from well-known brands such as Electronic Arts and Disney.

A) Define the term 'contestable market'. (2 Marks)

B) To what extent is the mobile app industry contestable? (10 Marks)

Monopsony Markets

1) What is the difference between a 'pure monopsony' and a 'pure monopoly'? (2 Marks)
A pure monopsony is a single buyer in a market place whilst a pure monopoly is a single seller in a market place.

2) A computer manufacturer has significant monopsony power over its component suppliers. Explain the effect on the manufacturer's monopoly power of:

A) Component suppliers integrating horizontally (3 Marks)
sdf

B) Lower market concentration among component suppliers (3 Marks)


3) Read the following

Extract A
Mega-dairies aim to challenge supermarkets
Complaints from dairy farmers against powerful supermarkets are nothing. In 2007 - 2008 it as reported that farmers on average made a loss of 1p on every pint sold and now many farmers are paid below the cost of production. Supermarkets can use their considerable buying power to keep the cost of milk low, in order to keep prices competitive for consumers. Morrisons has responded to critics by offering a new milk brand that will mean farmers are paid 10p more per litre.

However, some dairy farmers have decided to increase their scale in order to survive and therefore created mega-dairies. Nocton in Lincolnshire is the site of the UK's first mega-dairy, a concept that has been operating in the USA for many years. A mega-dairy is typically 30 times bigger than a normal dairy farm, with cows housed indoors in massive warehouses. The hope is that mega-dairies will allow dairy farmers to survive as they can achieve lower costs through economies of scale, as well as giving them more power at the bargaining table when negotiating with the supermarkets

3) Define the term 'monopsony power'. (2 Marks)

4) Analyse two benefits to customers of supermarkets' monopsony power. (6 Marks)

5) Examine the likely negative impacts on UK dairy farmers of supermarkets monopsony power (2 Marks)