Balance between markets & intervention Introduction (case studies)
This section does not involve any new knowledge (that's the good
news!), but draws instead upon all the other sections of the economics
syllabus (not such bad news!). This is what you will need to do in
order to answer the Data Response exam questions you will soon face.
In academic-speak, this is known as 'synoptic'
- where assessment tests your understanding of the connections between
the different elements of the syllabus content and requires you to
demonstrate understanding of the inter-relatedness of different
economic issues, theories, concepts and institutions.
Ultimately, the aim of this section is to build on your understanding of the often conflicting strategies of a market orientated and interventionist approaches to achieving economic growth and development. You will be encouraged to evaluate, to critique and to draw conclusions about preferred strategy options in different contexts. This will require you to compare and contrast the two approaches, by exploring their strengths and weakness in particular circumstances.
To improve these skills you must attempt past paper questions
Market-oriented and interventionist strategies - an evaluation of these in terms of achieving growth and/or development really could be all embracing! Some possible sections to review include:
- Section 1.1 - rationing systems, free market versus mixed versus centrally planned economies (advantages/disadvantages of different forms of resource allocation) - markets/competition, functions of price in resource allocation (the role of markets) - productive and allocative efficiency (benefits of market oriented strategies)
- Section 1.2- elasticity
- Section 1.3 -government intervention / response (problems of market oriented strategies/need for government intervention)
- Section 1.4 - market failure
- Section 2.3 - unemployment/inflation as consequences of market oriented/interventionist strategies
- Section 2.3- income distribution
- Section 2.4 -fiscal policy (interventionist)
- Section 2.5 Monetary policy (interventionist),
- Section 2.6 Market oriented supply-side policies and interventionist supply side policies
- Section 3.1 - free trade (market oriented), protectionism (interventionist)
- Section 3.2 and 3.3 - exchange rates, balance of payments problems and terms of trade (impact of market-led/interventionist strategies on these?)
- Section 3.4 - globalisation (market oriented), forms of economic integration (combination of market-oriented and interventionist)
- Section 4.1,4.3 - barriers to economic growth and/or development (particularly the sections on international trade and international financial barriers)
- Section 4.4, 4.6 and 4.7 - growth and development strategies (particularly the sections on types of aid, export-led growth/outward-oriented strategies (market oriented), import substitution/inward-oriented strategies (interventionist) and foreign direct investment)
In this section, as with section 4.3, we will use a series of video
clips, newspaper articles and case studies to illustrate some of the
policies associated with these two strategies and use these to assist
evaluation of their strengths and weaknesses.
The section will end with a series of questions. We suggest
that you look at the questions on market oriented and interventionist
strategies. Try in each case to formulate a plan of how you would
tackle them using bullet points.
If you were writing an essay, or an answer to the final part
of a data response question, each bullet should represent a paragraph
and/or relevant diagram, which you would use to fully expand upon each
of the points in your list. Examiners are very keen on structure and
the use of paragraphs.
These questions are extremely open-ended, so there are no right or wrong answers as such (though they must have appropriate economic theory) - follow the links in each case for a selection of points you might have raised.