Exam Advice for OCR F585

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Brief Hints on OCR F585 Exam Technique

Advice on Exam TechniqueThe F585 exam paper last two hoursThere are sixty marks available. You have approximately 2 minutes per markYou may be eligible to receive extra time in the examRead each question carefully and do not start answering until you are clear what the question requires! This will help you target a responseMake clear reference to the case study extracts and figures in your answers especially when given a steer to do so in the question!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 TechniqueAll questions are compulsoryGood quality diagrams can make a big difference to your answers and marks examiners like a clear analytical framework such as AD/AS analysis, trade analysisRecent 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.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 PaperThe questions follow the order of the extractHere 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 explain1 / b 6 marks e.g. using a diagram, analyse why1 / c 10 marks e.g. comment on the case for2 / a 4 marks e.g. explain two possible reasons for2 / b 6 marks e.g. analyse the impact of2 / c 10 marks e.g. comment on the extent to which3 / 20 marks discuss / assess the view

The 4 Mark QuestionsLearn key definitions really wellProvide precise, accurate but full definitionsE.g. distinguish between absolute and comparative advantage

The Analysis Questions (6 marks)Analysis questions on this paper carry 6 marksBest ways to claim these six marksDefine key term(s) in the questionYou must refer to the charts/tables in the pre-release if asked to do so by the question! (Make this clear!)Apply these terms to the question being askedLay out the economic theory e.g. analyse two reasons, two costs, two benefitsMake two points and then analyse the cause and effect for each pointWhere 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 question2nd - Then add in some evaluation / discussion based on evidence rather than opinionPerhaps challenge the economic theoryEvaluate 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 termLevel 1: Definitions of key terms in the questionLevel 2: Analysis and Application of the basic theory, + use of data from the extractsLevel 3: Depth Analysis including use of diagrams + associated explanations. Aim for two main analysis points focusing on a key point, cause and consequenceLevel 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 argumentsThe 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 PaperRead 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 extractsPrint 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 examCheck 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 GlossaryKey termBrief definitionGlobalisationGlobalisation is a process of deeper economic integration and inter-dependence between countries shown by a rise in the ratio of trade to GDPCapital marketsThese are markets for bonds (debt) and equities (shares)Foreign direct investmentInflows of capital from foreign multinationals (TNCs) including takeovers and investment in new factories SpecialisationSpecializing factor inputs in a certain task in order to increase productivityTrade barriersTrade barriers are ways in which international trade is controlled for example an import tariff, quota or embargoDivision of labourBreaking down production into smaller individual tasksComparative advantageComparative advantage refers to the relative cost advantage that one country has over another, trade is often based on comparative advantageEconomic efficiencyEfficiency means making optimum use of scarce factor inputsImport tariffsAd valorem taxes on the value of imported productsAbsolute advantageAbsolute 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 GlossaryKey termBrief definitionBalance of Payments imbalancesPersistent deficits or surpluses mainly on the current accountCurrent 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 surplusWhen net external trade and income is positiveCurrent account deficitWhen net external trade and income is negative leading to a net outflow of demand from the circular flowEffective exchange rate indexThe trade-weighted external value of a currencyFinancial flowsFlows of capital across national borders including debt and equityExcess savingsWhen gross national savings > gross capital investmentCapital (financial) account (BoP)Balance of investment flows into and out of a countryDepreciationFall in the external value of one currency against anotherMarshall 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 TermBrief DefinitionHuman 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 peoples well-being and basic quality of lifeTerms 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 importsCapital accumulationUsing investment to build capital assets such as roads, ports, buildingsCreeping protectionismWhere import tariffs rise + there is more use of import quotas and barriers to the mobility (free movement) of labour and capitalDeindustrializationA decline in the share of national income and jobs from manufacturing industriesPurchasing 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 HypothesisStates that the terms of trade between primary and manufactured products deteriorate over time threatening growth for poorer countriesExternal economic shocksUnpredictable outside events such as volatile prices for commodities which have a significant effect on economic growth, jobs & real incomes

Extract 4: Key Term GlossaryKey TermBrief DefinitionRemittancesMoney sent by people living and working overseas back to their country of origin usually sent back to their familiesForeign savingsForeign savings can flow into countries and provide a supplement to domestic savings. They include aid, private FDI and capital flowsOverseas development assistanceDevelopment aid from one government to another for example in the form of humanitarian assistance Portfolio investmentFinancial capital flowing from one country into another into bonds and equities (shares)Brain drainThe movement of highly skilled or professional people from their own country to another country where they can earn more moneyHuman capitalThe value of the human input into productionForeign 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 investmentCapital 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 GlossaryKey TermBrief DefinitionForeign direct investment (FDI)Long term participation by country A into country B. such as participation in management, joint-venture, transfers of technologyFinancial inclusionThe ability of a household to access credit, insurance and savings facilities for example to allow them borrow and save at different timesHarrod-Domar ModelAn idea that GDP is directly linked to the stock of physical capital but that there are diminishing returns from additions to the capital stockInclusive growthGrowth where the benefits are spread across all sections of society i.e. broad based growth, shared growth, and pro-poor growthInward oriented developmentPolicy that attempts to achieve development by stimulating domestic industry and import substitution behind trade barriersRevealed comparative advantageCalculated as the share of industry X in the economys 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 1Unbalanced 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)