In this video I develop Revision video: using AD-AS diagrams to analyse economic performance to see how to use AD-AS diagrams to answer extended questions set by OCR in Macroeconomics F582.
OCR typically set three types of last question
·
Discuss
whether a policy (SS) or policy instrument (R, $/£) can affect: a component
of AD (C & I) | an economic indicator eg economic growth | an economic
objective eg low and stable prices | economic performance eg GDP and inflation
·
Discuss whether
a change in a factor influencing a component of AD can affect a performance
indicator eg inflation
·
Discuss
whether a change in an indicator of economic performance (economic growth,
inflation) is beneficial (do
benefits outweigh costs)
NB: R affects I; I affects both AD and AS | G on
infrastructure and education affects both AD and AS
Evaluation: L3
assumes cet par – what if there is an unexpected event| is a variable eg R the
most important | depends on starting position ie capacity | impacts vary between
time periods
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