Micro & Macro Aspects of Exchange Rates | Smash A-Level Economics Paper 3 in 2024!

[@tutor2u-official]

SESSION TIMESTAMPS 00:00 Introduction 04:22 Revision MCQs 09:39 Remittances & exchange rates 12:42 Managed floating exchange rates 16:45 Micro & macro effects of a currency depreciation 24:45 China & its exchange rate

[@pigeonspagett7897]

Hi Geoff, wanted to say thank you so much for all the livestreams and helpful content. I got my results the other day and I got the grades I was hoping for, thanks for helping me get there 🙌

[@sparkyt2]

Can’t believe I missed this! Had no idea :(

[@CornG4397]

I was eating dinner when I saw the livestream 😭

[@LLLL00001]

Cavemen discover KZbin replay remastered 4K HD

[@ella_mcgov2013]

Really sad I missed the last stream thanks so much for your help!

[@tutor2u-official]

No worries!

[@sparkyt2]

Please can you explain why, other than process of elimination, the answer is A in MCQ QUESTION 4?

[@danielcomley1299]

Hi Geoff just wanted to say thank you immensely for the work you and everyone else in the team put into these streams. Very rarely joined live but watched every single one on catch up, and they've helped me so much. Will be going to sleep shortly before the big paper 3 tomorrow. You may just have saved my grade 🙏🙏

[@tutor2u-official]

Much appreciated - good luck in Paper 3

[@CornG4397]

Micro point, currency deprication creates lower barriers to entry for foreign firms who have high purchasing power within said countreis economy this could increase employment and contestability on micro level, macro level it could lead to increased LRAS due to investment

[@tutor2u-official]

Yes, but be slightly cautious of mixing macro and micro points in a KAA paragraph

[@jamiecull9097]

Could you say there is an opportunity cost for China of holding significant foreign currency reserves?

[@tutor2u-official]

Indeed - foregone interest for example

[@lisa.lin.]

In the multiple choice Q3, could you explain why it wouldn't be B please? I thought that lowering exchange rate would cause imports to be more expensive which would reduce demand hence inflation lowered. And, reducing productivity would mean wages are unlikely to increase therefore there's an unlikey chance wage spiralling to cause inflation? thank you

[@tutor2u-official]

A weaker exchange rate causes imported cost-push inflation. Lower productivity increases the unit costs of production.

[@CornG4397]

A note on china is that china is increasinly a consumer of goods aswell as a producer due to growing middle class. Which would affect the government's decisions

[@tutor2u-official]

Yes, internal demand now increasingly important as per capita incomes rises

[@CornG4397]

Geoff can you explain Q4

[@tutor2u-official]

PPP exchange rate is a measure of whether a currency is above (over valued) or below (under-valued) against another currency