Economics . .

ray2012

Have started economics around a month ago. It's going well, just got the Less Stress More Success book there the other day, just wondering if it'd be necessary going through the whole book (350 pages), or would I be as well of to just do the revise book (aprox. 170 pages) ? The book seems to contain a lot of unnecessary and unneeded info, and I don't want to bog myself down more than I already am. :P

So, do you think I would get everything on the course covered by just doing the less stress more success book ? I'd obviously still use the book for Q's or whatever.

Would love to hear what ye think :cool:

decisions

If I were you, I would:
- download syllabus
-download all marking schemes

pick one section at a time:
-look at every question that has ever come up on it
-go through the section in rapid revision with that in mind. Do you understand it?
-if not reference your book. Do you understand it now?
-if not ask.

When you understand it:
- See what exactly they look for in the marking scheme
- learn it OBH

And repeat.

decisions

Oh and rapid revision >>> any other economics revision book.

ray2012

alright thanks a million, it's what i'm planning to do. :P

LostBoy101

Or you can get a copy of Positive Economics which is the up to date edition and it focuses more on the exam rather than waffling the way through the chapters.

billyknowsbest

I am studying the Keynesian multiplier and I get the idea behind it. I also understand the meaning of the different acronyms but my query is to do with the formulae.
I have two 1. 1/1-MPC
2 1/1-mpc+mpm+mpt
I can do the calculations no bother but I don't see why in formula 1 you subtract MPC? Surely, MPC should be added as it is an injection into the circular flow of income. Similarly, in formula 2 why do we add mpm and mpt- taxes and imports are a withdrawal from the circular flow. Help :-)

dalta5billion

billyknowsbest wrote: »

I am studying the Keynesian multiplier and I get the idea behind it. I also understand the meaning of the different acronyms but my query is to do with the formulae.
I have two 1. 1/1-MPC
2 1/1-mpc+mpm+mpt
I can do the calculations no bother but I don't see why in formula 1 you subtract MPC? Surely, MPC should be added as it is an injection into the circular flow of income. Similarly, in formula 2 why do we add mpm and mpt- taxes and imports are a withdrawal from the circular flow. Help :-)

MPS (marginal propensity to save) = 1-MPC based on the logic that we save whatever we don't spend on consumption

Therefore multiplier is the inverse of leakages (MPM, MPT, MPS)

billyknowsbest

Cheers Dalta billion,
I get the rationale behind mps but why do we then subtract mpc in the first formula?
I still don't see this. neither do I see why we add the other ones! Can you simplify it?

dalta5billion

billyknowsbest wrote: »

Cheers Dalta billion,
I get the rationale behind mps but why do we then subtract mpc in the first formula?
I still don't see this. neither do I see why we add the other ones! Can you simplify it?

The multiplier is all about what will happen if money is injected into the economy. The marginal propensity values indicate what will happen if income increases.

I.e. if I get 1 additional euro in my paycheck next month, I might spend €0.80 cents of it on goods and services. Looking at it simply, for every €1 I get in additional income, I save (don't spend) €0.20 of it. Therefore my Marginal Propensity to Save is 0.2. This is a leakage from the economy, and a bad thing. If the government gives me 1€, I'm going to leak €0.2 from it.

Note that if we know MPC, we can find MPS

MPS = 1 - MPC

MPS = (1 - 0.80)

MPS = 0.2

MPT (tax) describes government actions when people's incomes increase. If the government is quick to tax any rise in income, MPT will be high. Taxation is a leakage from the economy. Same thing for Imports. If consumer income increases, we may be inclined to import more luxury goods from abroad. This is a leakage.

The multiplier looks at how effective an injection (I.e. measure taken to increase consumer income) is at increasing the circular flow of income.

We know the leakages (MPS, MPM, MPT), therefore the "multiplier effect" or injective effect is the opposite or "inverse" of the sum of the leakage effects. In maths we find the inverse by putting one over it.

E.g. if the government gives us all 1 extra euro, what will happen if

MPM = 0.1
MPT = 0.3
MPS = 0.1

10 cents of that 1 euro will be spent on imports, 30 cents taken by government in tax (for whatever reason) and 10 cents are saved by the consumer. Therefore 50 cents in total will "disappear" as leakages. But 50 cents will go around the chain again. Therefore the multiplier effect is

1/(0.5) = 2

billyknowsbest

Many thanks for that Dalta :-)

RoRo979

economics is the most pedictable exam i have ever come across, here is what im doing and all you need to do
q1) deman dupply consumer and elasticity ( could possibly come in 2 questions)
q2) market structures
q3) factors of production
q4) know national income and international trade. one or both will come up

there you are, now just go thrugh shorts q's for all previous years and your done