Both in the uk extract one. Okay. What's likely to be the biggest risk to growth in the uk? Let's have a little look. Oh Yeah, extract one. It was a question what's likely to be the biggest risk to growth in the uk six Marks? Biggest to growth, biggest risk to growth, biggest problem like biggest Yeah. Biggest risk Yeah risk that we face is bad news on the world economy and in particular in the aural area, Europe o area Yeah. So Europe. What's that, a notice that more than 60% of uk exports were two eurincluding 72 ilands alone? So what this is saying is that one of the biggest risks to the uk economy is if people they trade with do badly, because they're saying here that they export lots to the eo zone. And if the eo zone stops buying things, then it will impact the uk economy. So if Europe stops buying the uk's products, it will really have a bad impact on the uk economy. That's what this is saying. So it's a case of now like whether you can put that in a in an s, in a sort of six marker. Remember, two Marks will be for your application. Let's just have a look. What is it? It's likely to be the biggest risk to growth in the uk s six Marks, but with reference to extract one, which means there's two Marks for quoting. So tell me. Eurzone, so let me, what's the means of eeuro? Sorry, sing, it just means the heroes. Yeah, I see. Excuse eso, including Ireland alone. Is there something about exchange rates? Yeah, it could be it could impact exchange rates as well. Couldn't it? Think about. Thank up. You can think about yet exchange rates. Yeah, you can think about. Things like that, anything like that. So basically, the question is what happens when if the eo zone stops buying the uk products? Think of these sort of words in there. Employment in the uk exchange rates confidence. Spder. You got a quote here as well. Look, you could add in at the bottom left. Is is. A spice strpound stronger pound a stronger pound import import. Cheaper export area. Okay. So how would that impact everything? Impact that will impact. Import cheaper expexport area A D decrease. Good. If 80 so Yeah, 80 decrees less consumption, higher in higher unemployment. So the exports, yes, if exchange rates increase, that is the best thing over. And this lacks consumer confidence. Good, good. Which leads to with less consumer confidence what happens. Do people buy more? Does the economy go down? You can wait what? Go down the economy to people buy ome if I in the value of steling sterling? Yeah, it is drop down. It is drop pped down now. Good. And what quotes would you use in this question? So you've you've covered enough sort of economics in there. It's a six marker. You don't need that much, but you need at least two quotes in there, don't you? Because it's a six marker, I would say try and put three in. So out of there, what would your quotes be that you would use? So I can use that the exchange rate decreases, so there's more exports, more ad, and the graph shift to the right more. And so there's more consumer confidence, more investment, more sumore consumption, more employment in the uk. And then they will, they will increase ad as more productivity. You're exactly right. But tell me now or underline what bits of extract one you would include in that answer, because you would have to put some quotes in there. Extrtor one Yeah youhave to put some quotes in okay for the act extract one the economy of these trading partners suffer badly demand for exports. Trading partners suffer badly demand for k exports and make it and it will make it difficult for the national to understand a rebcing of its economy. Miss miss no no, no no, no. Is economy the biggest risk is in the in the euro area 60% of of uk exports were to the euro zone. Yep, good. Always the number. However, nearly three years after a 25% drop in the value of sterling sterling, there have been little improvement in breed a Britain's trade balance. Good. So what bits would you use? I mean, if it was me, I would use, let me find a color. I haven't let me, just in your answers, I think I would. In my answer, I would use this one. More than 60% of uk export were to the eo zone. And I'd probably use this quote, trading partners suffer. Could talk about bad news when we talk about confidence. Link that to that quote and you could say about the euro area. Okay. So just think about the things we would pull out of that that we would include in our application side. All right. Yeah. So so Yeah, consumer confidence. Yeah consumer confidence bus on the world economy and in particular in the euro area. Yeah. Ic, Yeah, perfect. Good. Okay. Let's have a look at the next one. So we've done that one. So let's see. With reference to figure two, discuss the significance of investment for economic growth. Illustrate your answer with an aggregate demand and supply diagram. So with reference to figure two, discuss the significant of investment for economic growth. So Oh, figure two, let's have a look. Goodness figure two. Oh, figure two, I need to put our nearly look to extract two. Okay. So once this one. You can move it you can move it a little bit. So figure two, first of all, work out what you're gonna to use as your sort of numbers that you're going to look at. What this figure question is this figure it tells uk growth investment and uk GDP growth and the international labor productivity growth. Figure two though it said though, didn't it? So so we can see that the delta that is 21 to 21United us. It doesn't change the uk change to decreasing. And wasn't it figure two? Hang on A A, wait, wait, wait. I think it was figure two. Wasn't it growth, investment, the youth and local government? I think it was figure two. Yeah figure two. Yeah, this one. You move it. So it's you're much better at this this one. It's this one. Actually which one? What means this one? This one figure two. Okay figure two. Okay, got copy. So this one figure two. Yeah. I uk growth, ss investment and uk growth all for uk GDP growth. Okay for this one, that is gross investment GDP growth, growth, ss investment GDP growth. So we can see from 20, 22001 to 2009. What is it in? Is it in is it percentage change? Hang on, higher percentage change over previous years. Percentage change from 2001 to 2009. So that is from 2.6 to 15 point 15%. Gtp growth 2.5% to -4.9%. So that is so that so Yeah, that is all decreasing investment, decreasing growth, decreasing. High investment, low high investment. Yeah. Look, gross investment 7.8 increase on the previous year, yet GDP only grew by 2.7. So it's not sort of corresponding. Whereas if you look here, look at this year, the GDP increased by the same amount, but the gross investment only went up by 1.1%. You see what I mean? But I know what you've beating like. And then obviously what you've got here is you've got this area where investment fell and GDP fell. So you've got you've got there's no real sort of definite correlation. There's points where it looks like so this one investment investment about GDP growth fell, growth declined. Investment fell, GDP growth declined. It's not the same in every year, is it? Like there isn't a really causational link? Yeah investment field and peoples take line. So maybe I should in two parts. Maybe I should divide it two parts. Yeah agree with the question. Yeah high estitimate are low GDP growth. Estitimate are low GDP growth. So that will increase the that will increase the ad, but however, that is low GDP growth. Less productivity. Maybe I should take part in take this in the micro miceconomic. I mean, the pbf not quite yet. Ad always ad ppf all the things you love. So ppf maybe that is the maximum that maybe that is the maximum maybe that is the point on the curve in an own pbf that is the maximum productivity productive possibility Yeah the possible productivity maximum possible productivity tivity and investment fill in GDP growth declined. Yes, that is reasonable. 80 decrease less consumption, less consumer confidence and then less product less GDP over. Good. What about tell me how this isn't always the case just by doing high, high investment? Will that give you high GDP growth? And use some figures out of this, please. Compare 2007 to 2003, 2007 to 2003. Oh Yeah give the feature figure. Yeah give the figure. Yep. So compare that for me. In 20 in 2003, this 1.1 in percent in growth ss investment and two point percent in that percent. Yeah Yeah its percentage growth Yeah two point 82.8% in 2007 that is 7.8% in investment and 2.7 in GDP growth. Good. Good. So that doesn't mean that just gross investment leads to GDP growth. So talk to me about possibly Oh, possibly other things. Affect GDP growth, not just gross investment. Do you see what I mean? Because it's not it's not a causation relationship with it. So what other things would affect GDP growth, can you think? Why, for example, why in this year guessing was this GDP relagrowth relatively high, yet the gross investment was relatively low? What other things impact GDP growth? Itp growth, not just a growth ss investment. Population growth benefits and employment loss and fact GDP growth, not just the growth ss investment population. Oh my God. Other thing affects GDP growth. The wage the wage yegood working hour is more, but the wage is the same. Yeah. So the GDP doesn't make more, I promise. So population growth benefits. Population growth benefits. Yeah the rate bond rates. The bond rates, low rates, the lower bond rates and higher dense rates. Yeah, birth rates. Yeah birth rates. So that is the also factor. Yeah, I know. Very good. Think about encouraging people to work unemployment benefits. What does that do for GDP growth? If there's low unemployment benefits, what do these people do? Talk to me about ppf. Draw it. Bbf drawing Yeah draw the ppf from the point inside the bronppf inside the curve, inside the curve, I mean, in the left of the curve and shiped to the line to the point on the curve. Yeah good, good big one. I think for GDP growth though the t word technology actually I think and it also it depends what you invest in. So can I just give you a so can I just do a do a like a it depends on so look, you know when we talk about evaluation, so the link between GDP growth. And investment is not certain, and the impact depends on exactly what is being invested in and how quickly. Investment. Link between gtp growth and investment is no third, and the impact depends upon exactly that. It's being investment invested in and how quick this investment will impact the economy being invested and how quickly this investment will impact the economy. This is worth noting that some investment products will have a longer term impact and as such, the growth of Vogwill not be seen in the year. Okay. This is your evaluation. So this is you saying, look, the link between GDP growth and investment is not certain. It's not it's not obvious, is it? And this is your evaluation. The impact of the investment depends upon exactly what is being invested. So if, for example, the uk government decided to invest in, I don't know, robots, it might be five years until it's the impact is seen in the economy. It's a longer term investment for the long term. That is a long term baries. So for the short term, GDP growth doesn't increase. Yeah. Yeah, I know. They're just the one people can do that. Just the one people can do can do this. Ao mask. Yeah. Elmusk you love him? Just him. Everyone mentioned Elon Musk. Everybody mentioned Elon Musk. Elo musk. Oh my God. Mars, the moon, space x, agficial intelligence. Oh my God. Anything about him? Oh my, everything. Yeah. Cars. Yeah. Driverless cars. Yeah. You're right. SpaceX Internet, he's just crazy, isn't he? Crazy? Crazy in a good way, but crazy. Yeah. So you're exactly right. Some of them are longer term, some we won't see the impact straight away. So it's worth noting that some investment sort of products or initiatives will have a longer term impact. And as such, the growth in GDP will not be seen in the year. And the reason I say will not be seen in the year is because this is the GDP growth is measured between years, isn't it? So we don't necessarily know that just because the investment was done this year that it wouldn't impact two years later. Yeah. So if musk did a load of robots here, actually he might have the impact might not come till here because you know they need to be built and rolled out or whatever ever it be. Or if we built some form of nuclear power station, it maybe takes four years to build and we wouldn't see the GDP growth until a bit later down the line. Yeah. Okay. We've made a complete mess of that. Now looks look at all the lines everywhere. I say we, I made a mess of that, right? Good. What's the next one? Oh, look, we've got some other ones. Uk, base rate. Savings ratio. Okay. Oh, okay. With reference to figure four, we'll have to have find figure four, discuss two factors that might enable a country such as China to achieve a rapid dy for economic growth. Watch these questions very carefully when they do something like this. I would split it really obviously. Talk about one factor, do all your quotes and your evaluation and then talk about another factor. Okay? If you stop and remember that each of the factors is going to be worth six Marks, okay? If you don't split it like that, you find it gets a bit messy. Okay. Yeah. So two each mark, each point is six Marks. Yeah Yeah but really split it like that because if you don't, it's it's quite hard. So one factor and then at the start of your next six Marks, you put another factor that enables the country is so with reference figure four, discuss two factors might enable a country such as China to achieve rapid economic growth. Let's have a look at figure four. Here we are. Figure four. You move it to the right place. So what what thing do you think what you're going to use is your thing that could enable a country such as China to achieve rapid economic growth? We're going, say, lumgrowth ss real GDP growth rate in China, 20003 to 2:10. What happened to nine and ten? It's still growth, though. Oh, sorry. Set me that. Did that. Can tell me what happened. I don't know. It's still growth. It's just gone down to like 8% or 9% rather than 12%. Economic mean that's mad. 12% in 2008, that is big economic growth. I think. Yeah. So economic growth economic growth is that the GDP growth rates that were adjusted for the inflation. And. Until from from 2003 to 2008 it it is increasing, and 20009 to 2010 it is decreasing and don't know why. So for for example, in 2003 it was 8.5. That great. Yeah, something like that. Yeah, that's fine. So in 2008, it is 11.9%. In 2009, that is 9% and in 2:10, that is 8.8%. So what's your reasons why a country like China doesn't have to be China is able to achieve sort of high economic growth? Can you think of any? I'll write some down. You can choose. Government government investment and population growth. Oh my God, 100%. Not technology, maybe population growth, whatever. Yeah maybe this technology. There's not improvement in technology. So. So the productivity, the ppf doesn't shift to the right now you're talking about how it can achieve economic growth, not how it can't. You're talking about how can achieve, how I can achieve, how I can achieve. Oh, 哎呀，ok, technology improvement in technology. Talk to me, draw draw a production possibility curve. Tell me. Shift right, shift to the right and population growth that will increase in right. Stop, stop, stop, stop, stop, stop. This is what I mean about this question. Do not mix the two together. Talk about one fully and then talk about the other. Really be because you're doing the classic thing that people do is mix them together, choose one and talk about it, and then choose the other one. So if you're going to do your two are going to be technology and population growth. Tell me six Marks about technology and then six Marks about population growth. Do not mix them in together just for a structure of uessay. Okay? So talk about one first. So technology, if you want to first. Firstly, technology. The improvement in technology will increase in the right shift in the economic growth. And Yeah that will increase in the technology. So that will make more innovation, make more potential jobs and the investment, sorry, the employment will increase. So ad will increase as there more people have wahave money spent on over. So second, one population grows. Maybe it's cacaby higher birth rates or the or the increase in immigration. That will increase in more experience and that will increase the productivity shift to the right side, ppf, moover, it is more consumption. So the GDP will increase. So that is economic growth. Very good. Can you see? I know I sort of like stopped you as you were at the beginning, but it's so much better to just lay it out in two separate bits, talk about one exactly as you spoke about it and then talk about the other. Very good. Excellent, excellent. What we go, what do we got? What's this one? What is meant by a falling gross domestic product at constant prices with reference to figure two. Let's. Okay, what's it showing us? The ban countries in different percentage changing in GDP at constant prices. What do you think? So it's a full marker. So you're going to have to answer the question and use it, use two bits of data. So you're going to have to use you know Oh, was that me? Sorry, two bits of data from there. So any ideas or you want, is that me that keeps moving it? Sorry. Yeah. Sorry, sorry, sorry, sorry. Right, I'm gonna stop. I'm just gonna move my, I think my thing was on the down thing. Do you have any idea? I know person is changing domestic wait. So the question is. What does it mean by what was it? What does it mean by so what's the question with referenced figure two, explain what is meant by a fall in gross domestic product at constant prices? What is mean by a full domestic figure two, German, German, United Kingdom, United States and developing economics. Developing economics that may be including China, I don't know. Very developing economthat is developing, developing. Maybe it's developing economics. Maybe Yeah, maybe it's developing. So domestic GDP at constant prices, constant prices GDP, if that is more GDP, so that means the product be more so that is more consumption. So we can see that Germany, that is 2.5%, 1.2%-5% and focus in 1.2%. United United Kingdom is 2.6, 0.5-4.9. So we can see that in constant price, GDP decreasing in Germany and Germany United kingall it in all of it, all of it. However, the developing economics increase in 2010. Yeah, it's only this one that's actually going to do well, isn't it? And constant prices just means taking into account inflation. Okay. So it's again adjusted for inflation. Why they chose to say at constant prices rather than real GDP I do not know. But don't let it upset you. Good. And you can use any numbers. Gross domestic products is obviously the amount of goods or services a country makes. Good. Nothing too complicated there apart from that constant prices instead of using real, which I am not over keen one. But we just look at every exam question and it's up to them. But so you're not tricked, right? What's this? Discuss two problems of comparing the economic growth, then economic growth for the uk and developing countries. Ck can't speak properly. Discustwo problems of comparing the economic growth of the uk and developing economies using GDP as a measure. Twelve Marks. Have we got any case studies with that? Yeah but I know that maybe I learned it. Yeah, I have a test after half ten, but that's just nine days. Just nine days difference. Just nine days difference. I want to know about it. Is there any difference? Just nine days. Just nine days. Oh, you've got nine days. You've got a nine day in februafter February. And Yeah, but unfortunately, it's very unfortunour. Our holiday is in thirth February. Yeah just by the way, I have a physics test at that day, but however, the the twelfth February is my birthday so I have a test after my birthday. Oh no, that's not a very happy birthday, is it not? It's a very happy birthday. Oh no, not happy. No, I when's your half turn then? Actually I've seen because I think I've been sent for doing some lessons in half term your half terms like. I can't remember now. Are you going back to China? Are you staying in the uk? I said that's just the nine days I want to go back to China because in that holiday there's Chinese New year. However, not just nine days holiday. Hello. How I come back? Oh, I come back. It's a long way for nine days, isn't it? Long flight just to go for nine days. Yeah, Yeah firthe test. Oh my God, the test after my birthday. And and then just 90, I cannot get to. No, China not spend. And and the weather is so bad in England at the moment, it's horrible. So it's not even like you can do fun stuff. I know, I know, I like England in the summer, England in the summer. And when it's like hot is nice. When it's like this, I don't know where if it's like it where you are, but it's just very windy and very wet. Very windy, very wet today. It's horrible but never mind never mind my car horrible just in London days. Oh my God, Chinese I'm only back to China. You I want back to China play to play with my best friend but Oh no. Is he in China? Is he in China or is he in Yeah he's he's China. He hasn't gone to the uk then. He didn't go to the uk for school. He stayed in China. He wants to go to Hong Kong. Oh, wow. Yeah. So you'll be all over the place, all your friends, all over the world. Yeah. Yeah. Yeah. That's nice. That's nice. Yeah, it's horrible. Have it. Like having a test near your birthday and having to revise in the holiday. It's not good. Not good. Okay. I forgotten what the question was. We got distracted by tests and revising okay, two problems of comparing economic growth of the uk and developing countries using GDP as a measure. Maybe. Use these figures again. Okay. What could be the problem of measuring developing countries against basically developed countries to uk using only GDP as a measure? Yep. Yeah, it's GDP. For living standards, of course not. That is annual percentage change in growth ss domestic product, not real GDP. So that may be that that will not adjust for inflation. Good. Good. And what GDP does that actually reflect? Oh, I've I done Oh sorry, I pressed a button and just put my computer to see what does this actually reflect on how like successful a country is, how well it's performing, how you know good a standard of living its citizens have? Yeah GDP does it always just you know actually let's have a quoor may have maybe it is it is an inequality in income. So maybe in developing economics there is some weallsay people and some core people. Because that is not a real GDP per head. That's not GDP per. So so maybe no. So it is not relevant about the living standards. Very good. Okay, so here you go. This is a prime example, the highest GDP growth rate. Hang on, let meet that according to Google. So the 20, 26. GDP growth. Rate is. Guyana. And look at this. Yeah, Yeah. Do you know what Gaza is? Don't you work near Israel, where there was the war? Yeah, Gaza. Where's Gaza? It's new Israel. Can you remember the Gaza Strip where they were bombing? And Israel? Like there was this family. It's really me, donis. There's all the problems, but it's saying there's going to be post war recovery and that's why it's going to have a high GDP growth. But that doesn't mean it's a good place to live or it's having like it's being like really good investment. It's just because it was so low before saying India a's projected to be 6.2%, China 4.2, the United States 2%. China is still growing, not as fast as India though according to this is only a prediction. And then the us is half of China. The growth rate is half of China. And Italy and Germany are expected to be less than 1%. And it says because of aging populations. Okay, so talk to me about that. Why would aging populations mean that places like Germany, population in German would have low with no what is that? Retirement? Yeah. Yeah. Aging populations means that everyone's just getting a bit older. Yeah. Go on, tilt me repeople. They cannot get a job again. So these people, that was a wage. Yeah they're not productive, are they? Like as nice as old people are as we as economists are not like they're they're a burden to us as an economy, aren't they? Because they don't produce anything and they need looked after. So economic wise, they don't add to GDP growth, do they? Because they're not productive, they're not economically active, which is a problem for us. Okay. So it doesn't. So GDP growth comparing between sort of developed and developing countries doesn't give us a representation of actually what it's like to live there or living standards, doesn't take into account sort of populations. What else it's it would be would it be possible for somewhere like the United Kingdom to grow as fast as developing countries? Would ever be possible for that this days. So that is -2000 and that is minus GDP, minus what happened inflation. Possibly or just lack of lack of. 2009 was 2008. 2009 was the housing crash, the building and housing crash. So a lot of builders and houthe housing market fell. That was around that time as well. So a lot of people like would have lost their jobs or lost their sort of houses. So that would have kind of been part of it as well. Yeah. Do you think GDP is a good way of measuring sort of country against a country? Do you think it's a good sort of well, gdif just before GDP? That's not as that's not as a good way to calculate the living standards because we should calculate to GDP per caita because some people, some country, especially especially for India has lots of popuas, a huge population. So that is very of fair for some country like Iceland. Very good. And then so Yeah calculates calculates that GDP had okay. And also the wealth disparity. I really liked the point you made about that, about the divide as well between where the where the sort of growth or the economic benefit goes in a country. So, you know you talked about the very rich and the very poor. Brazil, Russia, India, you know, especially India. India. There's very, very poor people live in India, aren't there? You know, very, very poor. And there's a few in country very very poor but some people but Yeah they have a huge population Yeah except Yeah especially for India an for example, Yeah I know I know India are very unfair for the wealth and poor poor they very different and I also know. Is there ganjas? Ganjas, Yeah Yeah. Ganges, Yeah that that river in India. Yeah, it's very famous. Yes. Yeah, it is very famous. Ganges, very famous. So Yeah, so we can see that it is it is poor. It is poor. It's very famous and very dirty, isn't it? Very, very dirty river though. The river, the river. Yeah Yeah. So there's a choke for there's a choke for this Ganges is that they said that this river is clean and healthy. Oh, it's one of the most polluted rivers, isn't it? You know it's really, really quite dangerous to drink out of or bathe in. You know you shouldn't go in it or anything like that. So Yeah, even if their GDP was growing amazingly, it doesn't mean that's a nice place to live that the environment's t's good, that the wealth being accurately shared, that you know it's sustainable. It could just be that one or two years theygrovery fast and then there would be no growth. It's not fair to measure something that's growing at the beginning to something like the uk, the or the United States that's you know already gone through its growth pace. So there's lots of different things we could say. Good, good, good, good. Let's relaso we can squeeze one last question in. Let's have see what we got. Is that one. Analyse two possible implications for macroeconomic policy of inaccurate forecasts for GDP growth data. So if we guessed or if we forecast our GDP growth wrong, what could be the impact when we're coming up with macroeconomic policies? So macroeconomic policies, think about things like interest rates or you know go just spending things like that. So what would be the problems if. If we didn't forecast GDP correctly. Implications of macro policy accurate forecast. How to do that. Okay. So what do we use GDP growth for? So we use GDP growth for everything to kind of work out what policies we're going to put in place. So if we get GDP wrong, what impact would it have on, for example, what we choose our interest rates to be? Interest rate. Inof lending. Wrong. Interest rates. Is it high? If interest rates be high, that, that will be more there will be less borrowing. Yep, keep going. What would? Yep. Which means what happens to aggregate demand and GDP. Aggregate GDP, aggregate moungdp. So less 80 as less consumption and GDP, less product, less productivity, less G D P. Right now tell me, if we had predicted, if we had got the prediction for GDP wrong and we had put high interest rates, what would happen? It could be terrible for the economy, couldn't it? If we've decided we need, say, for example, we had high inflation. And we predicted. High GDP, we may. We may use the lower interest rate. Good. Good. We may choose Yeah and if we have predicted wrong, we could choose the wrong ignite policy to use, couldn't we? Yep. Which could make the economy worse, could make it go into recession, could mean that it wouldn't be effective. Also, it could lead to you know making false promises to people, which could impact sort of their confidence, consumer confidence. And then you could talk all about consumer confidence, about how that impacts the economy. Yeah so the prediction of gep dp is really, really important for sort of making decisions because we use aggregate to expected aggregate demand, expected GDP to make our economic choices. Okay. All right. Have you got any questions or anything? No, no. All right, then will you have a lovely evening and I will speak to you soon. Okay, that is all right then see you later. Take care. Bye bye.