Transcript 1. data response training i

Approaching Data Response
Questions with Confidence
Skills Involved in Answering Data
Response Questions in IB
Economics
Outline
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Introduction
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Skills Tested in Data Response Questions
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Questions to Consider with Data
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Practice
Introduction
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IB Economics assessment has four parts
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Paper 1. One long essay, 1 hour, 20%
Paper 2. Three short answers, 1 hour, 20%
Paper 3. Three data response questions, 2 hours, 40%
Internal Assessment. Four commentaries, 20%
Introduction
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Data Response Questions (DRQ)
account for 40% of HL assessment
2 hours, must answer 3 out of 5
questions
Only standard IB reading time – 5
minutes before exam starts
The “Data” may consist of
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Text, maximum 400 words
Data tables
Data charts
Or a combination of all three
Introduction
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Each DRQ will have exactly the same format
• Part 1: 2 definitions and/or calculations
– 2 points each for a total of 4 points
– Vague definition will earn you 1 of 2 points per question
– Precise definition with an appropriate example will earn
you 2 of 2 points per question
– For calculations, show your steps
– E.g. What is the price elasticity of demand?
– E.g. What is the multiplier implied in the data?
• (need to define and calculate)
Introduction
• Part 2 & 3 – identification and application of
appropriate theory
– 4 points in total per Part (each Part with only 1
question)
– For each Part, identification of correct appropriate
theory will earn you 1 point of 2
– Correct application of appropriate theory will earn you
full marks
Introduction
• Part 4 – effective evaluation, supported by appropriate
evidence or theory
– 8 points in total (only 1 question)
– Relevant concepts recognized and developed in reasonable
depth, with some attempt at application and analysis will earn
you 3-5 points
– Relevant concepts recognized and developed in reasonable
depth, effective evaluation, supported by appropriate evidence
or theory will earn you 6-8 points
– Tip: When deciding which DRQ to answer, read Part 4 of
each DRQ and see if you are comfortable with that
question
• Part 4 generally builds upon the first three parts and
• Part 4 is worth more points than each of the first three parts
Introduction
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The DRQ’s will cover all sections of the syllabus
Each DRQ may cover a couple of sections
– Need to apply theory in a linked way
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MUST use evidence/data from the article for
the last 3 parts!!
– Extract data from article and label the diagrams with
appropriate and specific labels, e.g.
• Price of oil and not just Price
• Price points – use real values, $50/barrel, instead of just P0
– Refer to the text in your answers!!
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Need to EVALUATE in the last part
– See separate guidance on how to EVALUATE
Outline
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Introduction
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Skills Tested in Data Response Questions
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Questions to Consider with Data
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Practice
Skills Tested in DRQ
The range of skills
Examples of questions and banana
skins to avoid!
Basics of good preparation for
the data response paper
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Thorough knowledge of basic definitions and important economic
data measures
Good understanding of key economic relationships (theoretical ideas
are tested!)
Awareness of current policy debates in the world
Ability to interpret figures and work with them - the essence of data
response!
Awareness of the limitations of economic data
Willingness to bring into an answer wider knowledge and evidence
(not provided in the question)
Part 1.
Knowledge questions - definitions
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Tests a lower order skill but from knowledge comes the higher
order skills
Appears at the start of a paper - e.g. define the terms used in
the text, or charts and tables
Clear, precise definitions are required
Learn up to four main economics definitions a day in the final
prep for the exams!
Look carefully at the mark allocation - only 2 marks will be
available per definition
Don’t spend too much time on the definitions but beware
dropped marks
If calculations, show your work!
Can you define these precisely?
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opportunity cost
monopoly
market failure
negative externality
demerit good
economic growth
labor productivity
structural unemployment
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multiplier-accelerator process
real disposable income
real rate of interest
standard of living
price level
inflation
trade-weighted exchange rate
index
All terms to be defined must be from the syllabus (not
necessarily mentioned, but could be included implicitly
Must read the IB Glossary (on intranet) and the
definitions at the back of the Lipsey textbook
Ask me for a copy of the Collins Economics Dictionary
Can you distinguish between:
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direct and indirect taxation
fixed and floating exchange rates
GDP and GNP
income and wealth
inflation and the value of money
money and real income
private and social costs
relative and absolute poverty
Part 2 & 3. Data analysis /
theory application questions (1)
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First, comprehension
• Without data comprehension, you can’t have
correct application of theory to data
• Answers might include
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outlining a trend
identifying a peak or a trough
selecting relevant evidence from information given.
some summarising of the data or simple calculations
particularly where index numbers are used
• Are you asked to describe short run or longer run
changes?
Data sets used in questions
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balance of payments
interest rates
money supply
inflation measures
real GDP data
consumption and savings
data
general macroeconomic
forecasts
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company investment and
profits
competitiveness indicators
currency trends
employment data
unemployment data
taxation and government
spending
international economic
indicators
Example -consumption trends
CONSUMPTION GROWTH 1980-1997
Annual percentage change in consumption
8
6
4
2
0
-2
-4
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
Remember to describe the rate of change carefully!
Part 2. Data analysis / theory
application questions (2)
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Second, analyse the data with application of economic
principles
• Higher order skills - reflected in the mark allocation
• Often requires a theoretical relationship to be
– identified
– explained
– illustrated / supported / questioned by using the data available
in the exam
• You need to use the data to score highly!
• A change in the data is normally multi-causal
Global disinflation
A n n u a l % ch a n g e in co n su m e r p r ice s
INFLATION IN THE G7 NATIONS
9
8
7
6
5
4
3
2
1
0
80-84
91
85-89
90
93
92
95
94
97
96
What factors might explain the lower inflation
experienced in G7 nations during the 1990s?
Trends in the sterling exchange
rate
STERLING TRADE W EIGHTED INDEX
T rade weighted index (1990=100)
105
100
95
90
85
80
93Q1
3
2
94Q1
4
2
3
95Q1
4
2
3
96Q1
4
2
3
97Q1
4
2
3
4
Why has the exchange rate been so strong in the last
two years?
Trends in unemployment
LONG TERM UNEMPLOYMENT IN THE UK 1991-1997
Thous ands (S eas onally adjus t ed)
1200
1100
1000
900
800
700
600
500
400
300
200
3
3
3
3
97Q 1
96Q 1
95Q 1
94Q 1
93Q 1
92Q 1
91Q 1
3
3
Source: Labour Market Statistics
What is meant by long-term unemployment?
Why has unemployment fallen in the last 3 years?
3
Real output & unemployment
ECONOMIC GROWTH AND UNEMPLOYMENT IN THE
UK
Economic Trends, Labour Market Statistics
97Q1
4
2
3
96Q1
4
95
3
1400
2
97
95Q1
1600
4
99
3
1800
2
101
94Q1
2000
4
103
3
2200
2
105
4
2400
93Q1
107
3
2600
2
109
4
2800
92Q1
111
3
3000
2
113
GDP (factor cost), seasonally
adjusted (1990=100)
Gross Domestic Product (RHS)
3200
91Q1
Unemployment (000s) seasonally
adjusted
Unemployment (LHS)
Analysis questions on economic
growth & the budget deficit
8
5
7
4
P S B R (% ofGD P )
6
3
5
2
4
1
3
0
2
-1
1
0
-2
-1
-3
90
91
92
93
94
95
96
% change i n real GD P
REAL ECONOMIC GROWTH & THE BUDGET DEFICIT
PSBR
G DP G RO W T H
97
Explain using the evidence in the chart how might the trend In
economic growth might be expect to affect the PSBR
94Q1
2
3
4
95Q1
2
3
4
96Q1
2
3
4
97Q1
2
3
4
T h o u sa n d s
T R AD E BAL A N C E (m illio n p o u n d s)
1
105
0
100
-1
95
-2
90
-3
85
-4
80
EX C H AN G E R AT E I N D EX (1 9 9 0 = 1 0 0 )
The exchange rate & the BOP
UK TRADE & THE STERLING EXCHANGE RATE
Trade Balance (LHS)
Sterling Index (RHS)
Part 3. Evaluation
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Pros and cons
On the one hand, on the other hand
From the …’s point of view
The Keynesians believe… but the monetarists…
In the short run,…, but in the long run…
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Review the paper on EVALUATION!
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Outline
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Introduction
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Skills Tested in Data Response Questions
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Questions to Consider with Data
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Practice
Questions to Consider with Data
• In what time period is the data presented?
– quarterly / monthly / annual data?
• Is data measured as a level or as a percentage change?
• Is the data showing a percentage change and percentage of
something (important!)
• Is the data in monetary terms or an index number?
• What unit of currency is used? (common currency?)
• Is the data expressed in nominal or real terms?
• Has the data been subjected to a seasonal adjustment?
• Does the evidence include forecasts?
• Who has produced the information? How reliable is it?
Quarterly data example (1)
Look
for
turning
points in
the
charts
REAL GDP GROW TH SINCE 1990
% change year on year
5
4
3
2
1
0
-1
-2
-3
3
9 7 Q1
3
9 6 Q1
3
9 5 Q1
3
9 4 Q1
3
9 3 Q1
3
9 2 Q1
3
9 1 Q1
3
9 0 Q1
-4
This is just one way of showing the economic cycle
Look
also for
peaks &
troughs
Consumption
Interest Rates
3
97Q1
3
96Q1
3
95Q1
3
94Q1
3
93Q1
3
92Q1
3
91Q1
3
90Q1
3
C o n s u m e r s p e n d in g - % c h a n g e y e a r o n y e a r
5
3
14
2
12
1
0
10
-1
8
-2
-3
6
-4
4
Ba s e In te r e s t R a te s ( %)
Percentage change and level of
…consumption and interest rates
16
4
Both percentage changes
REAL GDP AND EMPLOYMENT GROW TH
A n n u a l p e rce n ta g e ch a n g e
5
4
3
2
1
0
-1
-2
GDP
-3
EMPLOYMENT
-4
85-89
89
91
96
94
92
90
80-84
93
95
What theoretical relationship would you expect between
economic growth and total employment?
97
Percentage of
P e rce n ta g e o f d i sp o sa b l e i n co m e sa ve d
PERSONAL SECTOR SAVINGS RATIO
13
12
11
10
9
8
7
6
5
4
88
89
90
91
92
93
94
95
96
97
Why has the savings ratio stayed so high?
Percentage change (growth of)
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Rate of inflation - the annual percentage
change in consumer prices
Consumer spending
Retail sales growth
Growth of wages and average earnings
Percentage change in real gross fixed
investment spending
Percentage change in the money supply
Percentage of (scale measure)
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Budget Deficit (PSBR) as a percentage of GDP (e.g.
one of the Maastricht Convergence Criteria)
Personal Sector Savings Ratio - measured as a
percentage of Real Personal Disposable Income
The Current Account deficit/surplus on the UK
Balance of Payments as a percentage of GDP
UK Manufactured Exports as a percentage of total
world trade
Unemployment as a percentage of the employed
labour force
Examples of index numbers
Relative Unit Labour Costs (a measure
of international competitiveness)
 Consumer Price Index or the Producer
Price Index (various other measures!)
 Terms of Trade
 Effective Exchange Rate Index
 Consumer Confidence Index
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Index numbers
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Indices are values expressed as a percentage of a chosen
base figure.
They don't have specified units such as pounds sterling
This is an advantage of index numbers - particularly
when we want to look at data measured in different
units to identify trends and relationships
Do some simple calculations if presented with index
number series
Data in index number format
UK REAL GDP 1986-1997
Real National Output 1990= 100
115
115
110
110
105
105
100
100
Source: National Income Data Releases
3
97Q1
3
96Q1
3
95Q1
3
94Q1
3
93Q1
3
92Q1
3
91Q1
3
90Q1
3
89Q1
3
85
88Q1
85
3
90
87Q1
90
3
95
86Q1
95
The sterling exchange rate index
STERLING TRADE WEIGHTED INDEX
T rade weighted index (1990= 100)
105
100
95
90
85
80
2
4
2
4
2
4
2
3
97Q 1
3
96Q 1
3
95Q 1
3
94Q 1
3
93Q 1
4
2
4
Describing data in index format
Check the base year
 Is it a weighted index? CPI and the
Weighted Exchange Rate are examples of
this
 Calculate percentage changes in the data
based on the index numbers (a good skill to
practise!)
 Be careful not to express the figures in
monetary terms!
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Outline

Introduction

Skills Tested in Data Response Questions

Questions to Consider with Data

Practice
Practice
– The Economist – back pages with data and charts
– The Financial Times
– The World Bank Development Report 2004
– Other sources on the Economics subject page (e.g. Bized)
– The news articles you use for your portfolio
– In-class tests and exercises