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DD209 Running The Economy : Exam Paper Available Online - the dust has settled.

The exam paper is now available on the website, so what can you do but look at it.

I think it was an odd exam in that some of the questions were similar or bang on the questions from the example exam ?

Part 1:

Q4 - IS Curve, not an identical question but the theory is all there in the example exam's explanation.

Q7 - Long Run cost curves - not an identical question but the theory is all there in the example exam's explanation.

Q9 - Absolute and Comparative Advantage - bar the numbers was pretty much identical.

Q10 - Game theory, bar the specifics of the game was pretty much identical.


Part 2 A:

Q11 Aggregate Demand and equilibrium - not an identical question but the theory is all there in the example exam's explanation to get some points.

Q14 Inflation Targeting Model - pretty similar.


Part 2 B:

Q16, Market supply and demand - pretty much the same theory and answer as the example.


I think anyone given a week or so to really study the example exam answers could have sat yesterday's exam and chosen Qs 4,7,9,10, 14 and 16 and come away with a pass.


I on the other hand.........

Q10. Apples and Hats. This was the first question I attempted, as I was most confident with this part of the course. I rushed to find the answers, struggled with the arithmetic, panicked, struggled again, became confused, found an answer and omitted to add much of what I knew about the answer as a written narrative which I should have done. I'm pretty sure I have the answers for comparative advantage the wrong way round, so this is pretty much a car crash for me and I am not expected any marks from this question.

Q9. Game Theory. This was a welcome relief, back on solid ground and I think I have pretty much nailed this question and given added information about how to overcome the prisoners dilemma, so hopeful of a good mark.

Q3. Multiplier. Knew the multiplier, knew the AD graph, explained the formula and operation of the multiplier along with its problems. I left space to go back at the end  derive multiplier the from the AD formula (the explanation full of errors from the text book - remember that), but I ran out of time :-(

Q4. Real Interest Rate and IS Curve. This was pretty straight forward, I mentioned the MEC curve and r = i - pi, lower real interest rates leads to increased output. I started to draw the three graphs that show how MEC, links to AD, links to IS, but it started to go astray and after the problems with Q10 I ditched this part as I thought I had enough anyway.

Q14 Interest Targeting Model. This seemed too good to pass up. Similar to the TMA and the recession explanation case study in Book 1.Knew about Lower zero bound and a bit, probably enough, about QE and its problems to answer this and I hope pretty well.

Part 2 B was a bit more of a problem, nothing I really wanted was there..... 2 question I had pretty much ignored through not revising Part 4 and Q18 I could not understanding what the question was looking for so with little choice, Q17 it was then.

Q17. Terms of Trade and benefits of international trade. This could have gone very wrong....... and I don't know if this is right, but in an act of unbelievable courage I stared with  two countries that made Cars and Bananas and had to work out production values that gave one absolute advantage over both goods, but each an advantage in one good.  This is not as simple as you first think, and I can assure you that the values chosen were far, far, far simpler than were 'used to confuse' in Q10. I could then show the benefits from trade, additional consumption, added the product frontier graph, talked about exchange rates and the Hechscher-Odlin model and how this produces inequalities in-between and within countries. Talked about dominant v subservient partners and inelastic and elastic goods...... I have no idea how relevant all this was, but I feeling better about today than I was after the exam.


It is very difficult to know how this has gone, but I have my fingers crossed for a solid Pass 2.

But if I can suggest 1 thing, just one thing to the OU regarding the exam. In order to simplify the instructions rather than have 4 question from part A, then a question from Part B list 1 and a question from part B list 2 - why not have three parts, 4 questions from part A, 1 from part B and 1 from Part C - simples ! ! !



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