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Home > Wednesday Wisdoms: Newsletter > What If You Can't Think of Points on a Question in an Exam?

Welcome to the 42nd edition of Wednesday Wisdoms by EdGenie!

Every Wednesday I send out actionable tips, tricks and real-world application insights from my 13-year experience coaching students to achieve As and A* in their Economics and Business A Levels.

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What If You Can't Think of Points on a Question in an Exam?

Hey Genies,

Picture this: You're in the middle of your A-Level Economics exam, and you come across a question that leaves you stumped.

"Assess whether reducing national debt is more important than economic growth for the United Kingdom."

What now? Don't panic. Here's a step-by-step guide to tackle such questions confidently:
  1. Take It in Your Stride 🚶
  2. Identify Key Terms 🗝️
  3. Start by identifying key terms in the question. For example, "national debt," "economic growth," "reducing," and "more important."
  4. Understand the Question's Purpose 🤔Think about why this question is being asked. The UK has high national debt and a slow-growing economy. These are clues to why this question matters.
  5. Define Your Answer's Focus 🔍
  6. Determine what the question is asking for. Is it reasons (the WHY)? Yes. Is it policies to reduce national debt or grow the economy? No.
  7. Generate Relevant Points 💡
Benefits of Reducing National Debt:
  • Lower interest payments free up government funds for other uses
  • .Increased investor confidence, leading to lower borrowing costs.
  • Enhanced fiscal stability, reducing the risk of a financial crisis.

Benefits of Increasing Economic Growth:
  • Higher GDP boosts tax revenues through automatic stabilisers.
  • More resources for public services and infrastructure.
  • Improved living standards and reduced unemployment rates.

Link to Macroeconomic Agents 🔗

Consider how these points impact different macroeconomic agents:
  • Consumers: Increased confidence and spending power with lower national debt or higher growth.
  • Businesses: More investment opportunities and reduced uncertainty.
  • Government: Better fiscal health and capacity for public investments.

 
Example Answer ✍️

Reducing National Debt:

Point: Reducing national debt lowers interest payments.
Reason: Freed-up funds can be redirected to essential services.
Evaluation: However, austerity measures to reduce debt could stifle economic growth and reduce consumer spending.
Increasing Economic Growth:
Point: Economic growth increases tax revenues.
Reason: Higher GDP boosts automatic stabilisers, funding public services without increasing taxes.
Evaluation: Yet, prioritising growth could lead to unsustainable debt levels, increasing financial risks.

Conclusion:
Weigh the importance of both. Highlight that while reducing debt ensures long-term fiscal health, economic growth provides immediate benefits and resources to manage debt sustainably.


When you're stuck, remember to break the question down and think through it systematically. You have the tools and knowledge to navigate any question with confidence.

Go ace those exams!


Best,
Emre

Productivity soars in sectors of global economy most exposed to AI, says report

Summary

🚀 Productivity Boost: Sectors heavily exposed to AI are experiencing a significant increase in productivity, nearly five times higher than less exposed sectors.

💷 Wage Premium: UK employers are willing to pay a 14% wage premium for jobs requiring AI skills, especially in legal and IT sectors.

📈 Job Growth: AI-related job postings in the UK are growing 3.6 times faster than the average for all job listings.

🤖 Long-term Impact: AI has been influencing the job market for over a decade, with specialist AI job postings increasing sevenfold since 2012.

🧩 Addressing Labour Shortages: AI is being used to tackle worker shortages, which is promising for nations with shrinking working-age populations.

📊 Economic Potential: The economic impact of AI is just beginning, with the potential to transform industries and significantly boost productivity as technology advances and spreads across sectors.

A Level Economics Questions:

Q: Explain how AI penetration can lead to increased productivity in certain sectors of the economy.
A:AI penetration leads to increased productivity by automating routine tasks, enhancing decision-making processes, and enabling the development of new technologies. For example, the text mentions that productivity growth is almost five times as rapid in parts of the economy where AI penetration is highest, such as financial services, information technology, and professional services.

Q: Discuss the implications of a 14% wage premium for jobs requiring AI skills in the UK. How might this affect the labour market?
A:The 14% wage premium for jobs requiring AI skills implies that there is a high demand for these skills and a relative scarcity of qualified candidates. This could lead to increased investments in AI education and training, attract talent to AI-related fields, and potentially widen the wage gap between AI-skilled workers and those without such skills. It could also drive innovation and growth in sectors where AI skills are crucial.

Q: Analyse the growth of AI-related job postings in the UK compared to the overall job market.
A: AI-related job postings in the UK are growing 3.6 times faster than the average for all job listings. Factors contributing to this trend include the rapid advancement of AI technologies, increasing recognition of the value AI brings to businesses, and the need to stay competitive in a global market. Additionally, sectors like legal and IT, which offer higher wage premiums for AI skills, are likely driving demand for these roles.

Q: Evaluate the role of AI in addressing labour shortages in economies with shrinking working-age populations. What are the potential benefits and drawbacks?
A: AI can help address labour shortages by automating tasks and improving productivity, ensuring that the labour supply can meet economic demands despite a shrinking working-age population. Benefits include maintaining economic growth and fulfilling unmet labour needs in various sectors. Drawbacks might include the displacement of workers in roles that become automated and the need for significant investment in AI infrastructure and training.

Possible A Level Economics 25 Marker Question

Assess the potential long-term economic impacts of widespread AI adoption on employment patterns and job creation.

Infographic of the Week

U.S. Imposes New Tariffs on Chinese Goods, Targeting EV and Medical Industries

The U.S. has announced a significant increase in tariffs on over $18 billion worth of Chinese imports, with new rates targeting the electric vehicle (EV) and medical sectors. This move, aimed at countering China's "unfair trade practices," includes raising tariffs on EVs from 25% to 100% and introducing new tariffs on critical minerals essential for battery production. Medical products like surgical gloves and personal protective equipment, previously exempt due to COVID-19, now face new tariffs, including a 50% rate on syringes and needles. These tariffs, enacted under Section 301, continue the trade policies initiated in 2018, affecting a broad range of goods and escalating the long-standing trade tensions between the U.S. and China.

Chart of the Week

The Global Land Squeeze and Its Impact on Smallholder Farmers

Smallholder farmers worldwide are facing a phenomenon known as "land squeeze," which is deepening rural poverty and land inequality. This issue is driven by the consolidation of large farms, leading to fragmented and smaller plots for smallholders. In Asia, land inequality has risen by 11% since 1980, and globally, 1% of the largest farms control 70% of farmland. According to the International Panel of Experts on Sustainable Food Systems' report, "Land Squeeze," factors such as land grabbing, green grabbing for carbon offset projects, industrial encroachment, and urbanisation contribute to this issue. These pressures diminish the access and control over land for farmers, Indigenous Peoples, and marginalized groups, threatening their livelihoods and food security. The report highlights that these processes are rooted in a history of dispossession and discrimination against smallholders and traditional communities.


Macroeconomic Data


Whenever you're ready there is one way I can help you.

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A huge thanks for hopping on board EdGenie's Wednesday Wisdoms newsletter! 
I'm Emre, and I've got a big goal - to make A* education accessible to all A-level students.
And it Starts With You!

Emre Aksahin
Chief Learning Officer at Edgenie