Brief Hints on OCR F585 Exam Technique

Advice on Exam Technique

1. The F585 exam paper last two hours2. There are sixty marks available. 3. You have approximately 2 minutes per mark4. You may be eligible to receive extra time in the exam5. Read each question carefully and do not start answering

until you are clear what the question requires! This will help you target a response

6. Make clear reference to the case study extracts and figures in your answers especially when given a steer to do so in the question!

7. Keep in mind that the higher marks are reserved for analysis and evaluation, so please do not spend too long on the shorter questions

Advice on Exam Technique

7. All questions are compulsory8. Good quality diagrams can make a big difference to your

answers and marks – examiners like a clear analytical framework such as AD/AS analysis, trade analysis

9. Recent examiners’ reports are worth reading – they say in clear terms that they are looking for students to show an ability to recognise how theoretical frameworks and the toolkit of concepts can be applied to the case study context. Examiners want students to make reasoned judgements on the issues raised.

10. In the final evaluation questions, always try to include a final reasoned conclusion to support the evaluation “it is the ability to reason through a judgement, rather than simply paraphrase what has gone before, which makes the best conclusions stand out.”

Mark Allocation on the F585 Paper

• The questions follow the order of the extract• Here is the mark allocation for individual questions on the

paper (part and sub part)• 1 / a 4 marks - e.g. define, describe what is meant by /

distinguish between / state and explain• 1 / b 6 marks – e.g. using a diagram, analyse why• 1 / c 10 marks – e.g. comment on the case for• 2 / a 4 marks – e.g. explain two possible reasons for• 2 / b 6 marks – e.g. analyse the impact of• 2 / c 10 marks – e.g. comment on the extent to which• 3 / 20 marks – discuss / assess the view

The 4 Mark Questions

• Learn key definitions really well• Provide precise, accurate but full definitions• E.g. distinguish between absolute and comparative

advantage

The Analysis Questions (6 marks)

• Analysis questions on this paper carry 6 marks• Best ways to claim these six marks1. Define key term(s) in the question2. You must refer to the charts/tables in the pre-release if

asked to do so by the question! (Make this clear!)3. Apply these terms to the question being asked4. Lay out the economic theory e.g. analyse two reasons,

two costs, two benefits5. Make two points and then analyse the cause and effect

for each point6. Where possible, always make use of an analysis diagram

+ explain it!

The Comment Questions (10 marks)

• Comment means you need to evaluate!• 1st - Build your analysis as for the 6 mark question• 2nd - Then add in some evaluation / discussion based on

evidence rather than opinion• Perhaps challenge the economic theory• Evaluate using the phrase “it depends on”

The F585 Discussion Essay Question (20 marks)

• Build your answer through the OCR levels of response – progressing through each level in term

1. Level 1: Definitions of key terms in the question2. Level 2: Analysis and Application of the basic theory, + use of data

from the extracts3. Level 3: Depth Analysis – including use of diagrams + associated

explanations. Aim for two main analysis points – focusing on a key point, cause and consequence

4. Level 4: Evaluation – a two sided discussion required with two main evaluation arguments made. Evaluation can focus on limitations of the theory and/or it depends on arguments

• The essay must have a balanced reasoned final judgement to get full marks i.e. to get into the 18-20 range of marks. • In the final judgement make explicit reference to the question again and

develop a clear case for or against the question. • Use evidence from the extracts and your own knowledge

Preparing for the OCR June 2016 F585 Paper

• Read through the case study paper and underline the key economic concepts – remember the OCR favours the toolbox of concepts – define, explain, analyse and evaluate using them!• Create a folder on your computer for useful online resources for

each of the main extracts• Print off a copy of the OCR specification and pay very close

attention to the detail of the F585 syllabus. • In particular look in detail at the right hand column that says

“candidates should be able to”. These are the skills that you will be tested on in the exam• Check through the OCR specification and the June 2016 case study

and map out the main areas of commonality. • Well ahead of the exam, start practicing exam questions for all of

the different components, e.g. the 2, 4, 6, 10 and 20 mark questions. Feedback from your teachers will be invaluable!

Extract 1: Key Term Glossary

Key term Brief definition

Globalisation Globalisation is a process of deeper economic integration and inter-dependence between countries shown by a rise in the ratio of trade to GDP

Capital markets These are markets for bonds (debt) and equities (shares)

Foreign direct investment Inflows of capital from foreign multinationals (TNCs) including takeovers and investment in new factories

Specialisation Specializing factor inputs in a certain task in order to increase productivity

Trade barriers Trade barriers are ways in which international trade is controlled for example an import tariff, quota or embargo

Division of labour Breaking down production into smaller individual tasks

Comparative advantage Comparative advantage refers to the relative cost advantage that one country has over another, trade is often based on comparative advantage

Economic efficiency Efficiency means making optimum use of scarce factor inputs

Import tariffs Ad valorem taxes on the value of imported products

Absolute advantage Absolute advantage is the ability to produce a product (good or service) at a lower absolute unit cost than in another country.

Extract 2: Key Term Glossary

Key term Brief definition

Balance of Payments imbalances Persistent deficits or surpluses mainly on the current account

Current account balanceThe current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)

Current account surplus When net external trade and income is positive

Current account deficit When net external trade and income is negative leading to a net outflow of demand from the circular flow

Effective exchange rate index The trade-weighted external value of a currency

Financial flows Flows of capital across national borders including debt and equity

Excess savings When gross national savings > gross capital investment

Capital (financial) account (BoP) Balance of investment flows into and out of a country

Depreciation Fall in the external value of one currency against another

Marshall Lerner ConditionA devaluation of a currency improves the BoP only if the combined (or sum of) price elasticities of demand for imports & exports are greater than one.

F585 Extract 3: Key Term GlossaryKey Term Brief Definition

Human Development Index (HDI)Human Development Index captures the level of income and measures of health (life expectancy) and education (school enrolment and literacy rate) to show progress in people’s well-being and basic quality of life

Terms of Trade (ToT) The terms of trade is the ratio of prices that a country receives for its exports of goods and services compared to prices it pays for its imports

Capital accumulation Using investment to build capital assets such as roads, ports, buildings

Creeping protectionism Where import tariffs rise + there is more use of import quotas and barriers to the mobility (free movement) of labour and capital

Deindustrialization A decline in the share of national income and jobs from manufacturing industries

Purchasing Power Parity (PPP) Purchasing Power Parity (PPP) is the exchange rate needed for say $100 to buy the same quantity of products in each country.

Prebisch Singer Hypothesis States that the terms of trade between primary and manufactured products deteriorate over time threatening growth for poorer countries

External economic shocks Unpredictable outside events such as volatile prices for commodities which have a significant effect on economic growth, jobs & real incomes

Extract 4: Key Term Glossary

Key Term Brief Definition

Remittances Money sent by people living and working overseas back to their country of origin – usually sent back to their families

Foreign savings Foreign savings can flow into countries and provide a supplement to domestic savings. They include aid, private FDI and capital flows

Overseas development assistance Development aid from one government to another for example in the form of humanitarian assistance

Portfolio investment Financial capital flowing from one country into another into bonds and equities (shares)

Brain drain The movement of highly skilled or professional people from their own country to another country where they can earn more money

Human capital The value of the human input into production

Foreign Direct Investment (FDI)Cross-border investments made by multinational businesses from one country into another, with the aim of a establishing a lasting interest in the company receiving the investment

Capital flightThe rapid movement of large sums of money out of a country. Reasons include a lack of confidence in a country's economy and/or its currency and political turmoil.

Extract 5: Key Term Glossary

Key Term Brief Definition

Foreign direct investment (FDI)

Long term participation by country A into country B. such as participation in management, joint-venture, transfers of technology

Financial inclusion The ability of a household to access credit, insurance and savings facilities for example to allow them borrow and save at different times

Harrod-Domar Model An idea that GDP is directly linked to the stock of physical capital but that there are diminishing returns from additions to the capital stock

Inclusive growth Growth where the benefits are spread across all sections of society – i.e. broad based growth, shared growth, and pro-poor growth

Inward oriented development Policy that attempts to achieve development by stimulating domestic industry and import substitution behind trade barriers

Revealed comparative advantage

Calculated as the share of industry X in the economy’s exports divided by the share of industry X in global exports. The comparative advantage of a particular economy is ‘revealed’ when this ratio is greater than 1

Unbalanced economyAn increasingly common feature of most modern economies. E.g. imbalances between: (i) savings & investment (ii) domestic & external demand (iii) public & private sectors (iv) formal & informal economic activity (v) Balance of payments deficits and surpluses (current account)