Скачать или смотреть Examiner's Tips Ep.4: How to write an A* Economics Essay | Oil Prices | A Level | Edexcel

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Economics examiner and Manchester United fan, Swithun Dobson, provides a step by step guide to help you produce A* Economics essays for A Level. He helps you to get behind the question to understand what the question is really about and what the examiner wants to read.

The key is getting the structure right so you put the information in the best place to maximise your analysis and evaluation marks. In this case, splitting the essay between oil importing and oil exporting countries allows an easy way to analyse the various effects of a fall in oil prices.

The question is really about the four macro economic objectives: stable growth, low unemployment, 2% inflation and a balance on the current account.

For an oil exporter, a fall in the price of oil will reduce export revenues because oil has an inelastic PED. So AD will fall, unemployment will increase, the economy could fall into recession and inflation could fall, even producing deflation. Clearly, this will make the county's current account less positive/more negative.

For an oil importer, a fall in the oil price will reduce the cost of production and shift the SRAS rightwards, increasing output. Since the demand for oil has an inelastic PED this country will now spend less on it than they did before reducing the size of imports so AD will actually increase which will mean even more growth and a fall in cyclical unemployment. The effect on prices is unclear since AD increased and SRAS increased. The current account will become less negative/more positive.

This question is taken from an AQA past paper but the principles can help you achieve top marks for all exam boards such as Edexcel, OCR, WJEC and more.