Good. And just make through Yeah make sure that's it. Hold done. Nice Yeah and you know labeled that one as well. Okay, perfect. When did you get back to school? In the next year, next year. That sounds like a long time away, doesn't it? When you say it like that next year maybe. Okay okay. See which one of the following factors is most likely to cause an increase in the long run aggregate supply and most likely to cause an increase in the long run aggregates supply. 怎么知道？This one, Yep, because the rest, the rest actually do the opposite, don't they? The rest decrease decreasase investment, decreases aggregate supply, increase in level of unemployment benefits, makes more people like, not work and reduced access to credit for consumers and businesses, or they need money to invest, you know, so they would do the exact opposite. Define the term budget deficit. Can you remember this? To deficit. It's about. I know it's about. Says you clue government spending and tax. That's what it's about. Can you remember? No. Oh, I didn't mean to draw all over it. So the budget deficit is when government spending is higher than the tax revenue. So the money going out. More than coming in for the government. Yeah. So it's when the government don't have enough money coming in for all of the things they're spending money on. Does that make sense? Yeah. Okay. The chancellor announced in 2015 in the 20015 budget that the personal allowance annual income that could be on for starting to pay tax would increase from 10600 to eleven, and this means most consumers will pay less income tax. Annotate the aggregate demand diagram and aggregate spy diagram to show the likely impact of an increase in the personal allowance on the uk's price level and real output. Okay. People are paying less tax, so they will have more money to spend. So what would that do to aggregate supply and demand? Or just it's just one actually just move one of them? Increase the personal allowance on the uk's price level and real output real Yeah so people will be paying less tax. So if you think if people are paying less tax, they have more money to spend. So what does that do to either aggregate supply or aggregate demand? So if that is if that is increase in real output. If that increase in real output and that will increase the consumption. Yeah, Yeah, Yeah real outpuone because people would have more money if I'm not paying tax, if I would buy more stuff with the money I would have spent on tax, I'm paying less tax. So I have more money. So therefore I demand more shoes, bags, clothes, holidays because I don't I'm not paying tax. Yeah they do not pay for tax, but that is real output. So there's more goods. There's not more goods. What we're saying is the aggregate demand for goods, aggregate demand Yeah aggood demand has shifted to the right because remember, it is with the equation is C, C. So it's this one that increased. Consumption consumption increased because normally a person was paying, right? This is the person's money. Okay. Before they get it, say, for example, this much goes to tax. Maybe this much this person will save and the rest they will spend consumption, yet the rest is c. But what we're saying in this new thing is actually this person's going to be paying less tax. Tax is reduced, taxes gone down. Okay, so now this bit is no longer taxed what they would have spent on tax paid in tax. They don't actually now they can spend that on whatever they want, they can consume. So their consumption has gone up. If tax goes up, consumption goes down because you've got that trade off, because a lot of people you know spend all the money they earn. Let me do it in numbers. This for you. So if you if you earn a thousand pounds a month, okay, let's say tax that was 200 pounds doesn't really matter what savings was 100 and you spent consumption. You spent 700 pounds yet, okay? And this is not just you, this is everybody. That's just you know everybody's this sort of amounts, okay? But now what the government have said is the tax is gonna to go down. You're gonna to pay less tax. So that means that this bit will go down. Let's again just keep the numbers simple. So let's just say the tax now has gone down to 150. We'll keep our savings at 100. Now our consumption has gone up to 750, yet that extra 50 pounds that we were paying for tax here has gone into consumption, which means the consumption has gone up, which means aggregate demands gone up. Does that help or not? Well, I said that if that is increase in real output, why that will increase in consumption? Aggregate demand. That's showing the demand that aggregate demand for the whole showing a more or so question. One that will increase in aggregate demand. Why not? Yes. Well, it can shift as as well. What do you think it would do to as you could Shias as well? Okay. I would say the obvious one was to shift aggregate demand, but you can shift as okay. You could say that actually is this. You know less tax, aggregate supply will shift outwards. You could do both. You could do both in these where there's where the question is worth two Marks that only ever wants one shift. Okay. You don't want to shift both of them. I would argue that aggregate demands the more obvious of the two. If tax if taxes go down, aggregate demand increases. I think that's because of the consumption element. I think that's the more obvious one, but you wouldn't get it wrong if you had drawn a shift. This way, aggregate supply. Okay, so it's not that you need to know which one, it's just whichever one sits with you better. Okay. Define the term direct text. So you've got two types of tasorry, some on their consumption, saving and investment. That's indirect. You've got you hang on, you've got direct. Tell me the difference between the two. Indirect tax indirect tax is in. Is is the tax in people's payment other way around? We've got them the wrong way around. Okay, just that way around. On income take directly from. Okay, Yeah direct direct take and die if you remember that's the proper definition. But if you just remember direct tax is taken directly from wages. You know Yeah which one? The following is a direct tax. Now hang on, let me help you. That's fine for a definition, but a direct tax can also tax you can also tax a business directly. So which one of the following takes an example of a direct tax rule out the ones that aren't? Architects. So firstly not a and c because that is wait is c is c is c. Because corporation tax is the tax on. Basically. Okay. Okay, the chart below shows the results from a survey of the ukconsumers confidence in their financial situation. A negative balance means that on average, consumers reported their financial situation got worse. Okay? Positive means they've reported it improved and a zero balance means no change. Okay? So here's zero explain one likely reason for a change in consumer confidence between 2012. In 2015, I see. What sort of things would make consumers more confident. Consumer more confident. Remark. So maybe that is not simple anyway. Well, in this graph. So what want you want an answer I'm so more confident is increasing and the reason and the reason may be because of the tax decreases so they have more money to so president so residents we'll have more money to consume, invest and save you use figures from the chart. You've got two Marks. Use a figure from the chart. Use a number. Yeah. Okay. For example, in 2012, the value is in the value of the consumer confidence is -22 and and in 2015, the value of consumer confidence is in. Yeah, good. So Yeah, just remember to use your sort of numbers of the graphs. Pretty good. Good. Which one the following is most likely to result from an improvement in the uk consumer confidence, a decrease in the marginal propensity too. I choose be text Yeah either that one or that one let me just think one minute which the follow motor so decrease in the marginal propensity too. People are more confident. They're going to want to import more. They're going to consume more. That one's definitely wrong. People are more confident so it's going to be a decrease in that's a bit questionable. That one I think it's what's this one because people save when they're less confident, it's going to be safe. So when there's less confidence, people save, okay? People are worried they're saving, okay? When there's more confidence, people spend, okay? So so there would be a decrease in savings if they're more confident. So say. Right. Which one of the following is most likely is a rightwoshift in the aggregate demand curve? There's aggregate supply curve. Oh sorry, aggregate supply curve. Sorry, sorry, well done. I see an increase in product productivity. Yes. Yes, yes, yes, well done. The chart below shows the price of crude oil from January Oh, seventh to January fourteenth. Okay, that's the oil. We'll come back to it. We'll just see what the question is. The best approximation of the percentage increase in crude oil price per barrel from January 2009. So January 2014 is. Percentage increase from first of January 2009. So from here. So Yeah. And the percentage increase. Oh, my God. What is it, 40 to? 42 to. I mean, we're estimating here. I don't know. I going to do I was going to do 42 to 98, but it did say estimate. So. I wish I'm work. Oh, okay, I've got my answer. Is that as this one? D, that's what I got. I got 133. But Yeah, it's it's that one, isn't it? Because obviously we were reading up a graph, so would have been slightly different. An economy is a net exporter of crude oil. Draw adas diagram to show the effect of an increase in global crude oil price on the equilibrium level of real output of this economy. Okay. So we export crude oil and there's been a increase in the price equilibrium price. Of crude oil. So draw a demand and supply diagram to show that. So there's been a shift in aggregate demand. Doesn't that to increase price? Increase global crude oil. Crude oil, it means raw oil. It's like just oil. Don't worry, I know on the equilibrium equilibrium level of real national output of this economy. There's been in the global markets, there's been something that's increased price. What increases price? Increase. So maybe I should join the graph if there's increase in global crude oil price. There will be less demand and less consumption. So no, no, no. It's talking about it's saying to show the effect of an increasing global pooil price on the equilibrium level. So. What caused it? Increase in effect, but there is effect of an increase in global crude oil price, an economy is a net exporter of crude oil draw demand, this diagram show the effect of an increase in global crude oil price. Yeah, if there's an increase in global crude oil, then this means demand for global crude oil has increased. Or present on the equilibrium level of real national output of this economy. So. Yeah is shift agurate demands shift ting to the right. Drawer. Hang on, not because you don't need to draw it though. We must have one. Assuming the blue linnot there, we've got to reflect this increase in price. Look, so it's going to be a shift of aggregate demand to the right because it's squsaying. Hang on, there's been a global increase in price. You. Global increase in price. It's been a global increase in price for crude oil. Well, the only thing that will increase the price of crude oil is a decrease in supply or an increase in demand. So you've got to draw something that represents that increase in price. Increase in price that will I don't think that will increase that will shift to the right. I think I think maybe it will shift to the left. Okay consumption. Okay. You want to draw it. Draw is. Okay. Okay. Okay uk, government budget and household spending government spending and tax which ones which Oh government spending is this one tax? Okay. Real household consumption. Oh, good, dness, lots of stuff. Hang on, let's see what the question is. With reference to figure one, explain the term balanced government budget. Miss, about the last question. Yeah about this graph, I'm not understand. I'm not understand except this graph. You're not understand what sorry I why you've drawn it. I know I need to draw it because the question says I need to draw an ads diagram, but to show the effect of an increase in global, you haven't drawn your shift. So what what shift you gonna do? What shift are you gonna do on here? Here, that's my question. So how to draw it and how do you say the effect. What if it was me? Okay? We are drawing this diagram shows our economy, our country. Okay, this shows our country because we are drawing the national output of this economy. So this is showing our country. Okay? Now all of a sudden, there's been a big increase in what people internationally, the global crude oil price, the global. Has gone up, right? So the global crude oil price has gone up to here, okay? P let's just do P2 right? Now we as a country are not going to say, Oh, all right, then to get up there, we're not going to supply less, are we? If the price has gone up that we can sell our goods for? We are going to increase. We're going to facilitate that with an increase in the outquate demand. No way we're going to supply less. And that would show our new equilibrium price. So that is formmark. Yes, okay with the ones where all you have to do is draw a diagram. Then you have to just draw a diagram. Sometimes you get two Marks, sometimes you get four Marks. So you tend to get you tend to get one mark for just doing that basically Yeah you get one mark for shifting it in the right direction. And then the rest of the Marks are from all these sort of labels showing the changes. And the axes. If it says draw a diagram, all you have to do is draw a diagram. Okay. Okay, Yeah p. Okay. With reference to figure one, explain the term balanced government budget. So figure one. Yeah what do you think a. Now remember, this was a formmark question. It's asked you to look at the graph or the figure. So what have you got to use in your answer? You've got to use. And remember, I always tell you to use at least two of them off there. Okay. Numbers, percentages, anything. Yep. So what do you think a balanced government budget would be? Should I give you a clue? It's not a budget deficit, and it's not a budget surplus. That's about those points are balanced government Yeah balance of budget Yeah because government spending equal to the tax revenue very nice Yeah okay. Now make it into a full mark. Mark Yeah I see. Sorry for mark with a question down a bit more. Explain the term balance government budget. That's your key it to get your other two Marks. Yeah the figure one, they have four points. There there are four. Points, the two curves connected. Good and use some numbers. So I would say something like like given approximate date, this is quite either to date, possibly be 1991. This one be around, I don't know, 1987. So we're going to answer that question then four Marks go. Oh, maybe we can use the figures in here. For example, in the figure one, in the figure one, this a four point which government spending equal to government tax revenue in. It gets 36% from 1980 to 1990. And 35, 35% and 34% between 1990 to 2000. Moreover, there is one it get 35.5%. Between 2000 and 2010. Good. Yep. So you just need to make sure you add the numbers in which you did very, very well there. So that's good. So so you've got budget surplus where the government get more money in tax than they spend, budget deficit where they spend more than they get in tax and balance government budget where it's the same. Okay. What are we up to? Explain a lot. Sorry. Is that a question? I should use I should use a number and use this connecting point. And I explathe balance of government budget. Yeah, Yeah, Yeah. I mean, you did that first. I would always explain that first, which you did. You said that to me first and then add the numbers in and say so because you you said, didn't you? It's where it attacks. Revenue is the same as spending. So about a balanced budget, government budgets, where tax revenue is the same as spending, you could say whether there is neither a budget deficit nor surplus. So they're not in a deficit and they're not in a surplus. This on figure one. This happened four times in 90, you know. And you could say something like it is more, it is rare. Figure one shows it's uncommon for this to happen. There is usually a budget. What is there? Government spending, usually a budget deficit, anything like that. Just using anything off the graphs, numbers are the easiest way because it shows you've used it. But just making comments about the graph related to your question. Yeah, quite a nice little question. I bet loads people didn't get for do very well on that. Actually. Nice little question now. Okay. Very happy. Explain the likely effect of a fall in the exchange rate of the British pound on aggregate demand referred to extract a in your answer. So there's been a fall in the pound, and we want to know the impact on ad and refer to web extract a. I we've grb four in the pound and we want to know what impact that has on ID and we need to use extract a and it was a five mark, okay. So have a look at extract a. If a pound decrease, a stronger pound, cheaper, cheaper import and dairy exports. So opposite in opposite. So s wins, a pound decreases, exchange decreases, so that will derer import and cheaper exports. So the net port will increase and will and will let 80 curve shito the run. Maybe that will increase A D. Hanon, no, you've said, you've said. Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah, good monyeah. What about. It's a five mark. It was about aggregate demand. The only thing I would say to you, I liked your explanation. The only thing we're missing is something from the passage. And the only other thing I'd have changed on your answer. So we're missing something from in here. We have to find something. And the only other thing is whenever the question has got aggregate demand in, I would always write your formula. I would always give you knowledge, okay? So I would just start with aggregate demand consists consists of and then ad equals c Yeah R plus five plus dj. Just looking at how you're going to answer these questions going forward. If ever you see or get demand and a question enever, you you know start to talk about aggregate demand, make sure you put your formula in, okay? Because you know it put it in. It's good knowledge. It shows you know what you're doing and consists of it's quite I sure. From the part of the consumption. Why? No, no, no. Ad consists of ad equals c. What I'm saying is you should write it like that. Okay? Plus I plus I was just shorting in it. Yeah, I wasn't just writing the whole thing out. Yeah dot, dot, dot. Yeah. So I was just saying at the beginning, because the question is about aggregate demand. Stick the formula in. Okay, start your question with aggregate demand consists of blah, blah, blah, blah, blah in this example, exyou. And then the bit you've said in this question, exchange, you said about exchange rates, you you did that very well. You said what that means. Lovely. Then the only thing we would be missing for that fifth mark is something out of the case study. So now you need to choose something. Out of the case study. Which part is missing the quotes, the application, the using the case study? Okay, right exactly. Okay. Application ext a. So this it's not easy actually because none of it fits that well. You could use this because you said aggregate demand increased in you. Consumers spending rose in 2017, and annual spending per person increased by 589 in 2016. I would put something like that in. So what did you say? You said shifting aggregate demand to the right. This was and then you could have just written after that, this was shown by annual spending per person increasing by 589 pounds. And also house prices rising led to house prices rising to 5.1%. There's not that the problem with a lot of these questions, okay? The problem is they make you put application Marks linked to the case study. And sometimes they're really not easy to put in. It's actually quite hard. So you really need to just drag out anything you can when it's like this. I would always put anything you've used out of the case study in quotation Marks as well. So you could quote out of the case study. Consumer spending rose. The only thing I'll say here to you is you can't get application Marks for any words that are in the question. So let me just show you so you wouldn't be able to. Where's the question? Sorry. British pound on aggregate demand. Okay. I just I was just checking that what was in the case study falling the exchange rate at the British pound on aggregate demand or to change rate on British pound on aggregate demand? See like this bit. That was in the question. So you would not get any Marks for using that as your application. If it's in the question, they usually, not always but usually do not award application Marks for it because that doesn't prove you've looked at the case study that just prove you've read the question. So sometimes you've got to be very careful, which is why I always say try and do you know one more than you think you need application just in case because you could put something in that was in the question. So does this make sense? So if like this was the question, it's not, but you wouldn't get any application Marks if you use this because it's in the question. You would have to use something else from the case study. So it wasn't his case study case study this the extracts the extracts the case studies the information they've given you okay Yeah. But we'll do more of them. We'll do it as you go through. Well, you'll get really good at it and it will become second nature. The it's the hardest, harder bit sort of making sure you pull out the figures. Okay, right. I will see you tomorrow. I think Yeah can't remember I think so. All right, then see you later. Bye, bye, bye.