Encouragement

• All the evidence suggests you already know as much economics as these three clowns.
• They may actually know some introductory macro:
  • Unlike them, be prepared to show it when you get opportunity!

Introduction

• Exam is 2–4pm Tuesday 12 May in Palmer Building.
• Exam is same format as class test/midterm exam was.
  • But two hours long.
• Three sections:
  • Section A: Definitions.
  • Section B: Choose one essay from choice of three.
  • Section C: Compulsory question on exchange rates.

Exchange Rates: How I’d Revise

• Firstly, read the chapters (19–21) in the textbook.
  • Remember, you’re expected to have done 121+39=160 hours of guided independent study.
  • Don’t try and shirk by just reading your notes, or the slides.
• Re-read chapters and take notes whilst reading them.
  • Re-write those notes, reducing them down eventually to one side per chapter.
• Write essays based on past paper questions:
  • At first just write, and go back to notes if need be.
  • After a while, start writing without notes, checking after.
  • Write at least one essay under timed conditions.
• In the process, think about definitions:
  • Be able to write out a definition for every term you come across.
  • Maybe even a Word Cloud…

• Hence:
  • Exchange rate (nominal): Rate at which two currencies are swapped at.
  • Exchange rate (real): Ratio of price levels in two countries.
  • Exchange rate (effective): Average of nominal exchange rates of a country with major trading partners.
  • Currency: A system of money in general use in a country.
  • Balance of payments: System of accounts for financial flows in and out of a country.
  • Current account: All financial flows in and out of a country used for current consumption.
  • Capital account: All financial flows in and out of a country used for investment purposes.
  • Exports: Goods produced in a country sold to buyers from abroad.
  • Imports: Goods produced in another country bought into a country to be sold.
  • Uncovered interest rate parity:
  • Covered interest rate parity:
  • Purchasing power parity:
  • Income:
  • Price:
  • GDP:
  • Liberalisation:
• Reminder: Definitions are not gospel.
  • They are single sentences that characterise essential features of something.
  • Only the first sentence you write will be marked in the exam.

Essays

• You already have plenty of examples of essays and guideline solutions.
  • Midterm exam: http://rpubs.com/jjreade/ec114_midterm_exam
  • Midterm notes: http://rpubs.com/jjreade/ec114_midterm_notes
  • Sample final exam: http://rpubs.com/jjreade/EC114_sample_final_exam
    • Some notes on it: https://www.dropbox.com/s/1hskdcxx278m5lj/sample_final_exam_notes.pdf?dl=0
  • Extra sample questions: http://rpubs.com/jjreade/additional_qs
• There are no answers for essays:
  • There is no single set of words that will get you 100 marks.
• There are basic principles for answering essays:
  • Answer the question set, not what you want to answer.
  • Define the concepts you make use of in your answer. Referring back to Section A not ideal, as the point is you are developing an argument within your essay to answer the question set.
  • Time yourself, and be strict about moving on to parts (b) and (c).

All the best…

• There is no reason why you cannot pass and do well in this exam.
  • Equally, there’s no reason why you will pass if you assume your A-levels will get you through.
• Between now and 12th, my office hours are:
  • Tuesdays and Fridays, 1030–12.
  • If I am not there, I’m sorry, please email me to arrange an alternative time.