Help needed in structuring answers
 

Respected Seniors,

I need some assistance regarding the structure of answers for Economics. I have consulted various books and their level of difficulty and detail varies so much that I am unsure about what level of detail and analysis do the exam questions command. If anyone can be kind enough to give a general outline with an example, and if possible, your contact email/number so I could ask specific questions.

Your help is much appreciated.

economics question
 

i think paper 2 requires more analysis, i mean the more points u add the better it is.for paper 1 it is said that a BA level answer is fine but since past papers have really heterogeneous question i reallt doubt this presumption..so these days i m also exploring different references for various topics.for instance last year paper had a question about keynesian consumption function..now for 20 marks i think a simple answer isnt enough.u can star with 2 sector model n xplain C func n then in three sector model..i mean adding govt sector. then u can go ahead n compare it with classical C func n may give some example of the function.
as regards the detailed discussions its better to do it on forum as u may get opinion of more than 1 person.
hope that helps..

@Xenia:
Many thanks for your reply. Your Keynesian answer structure is very helpful, but what about more straight forward questions, but also very open in their scope. For instance,
Q5. Why we demand for money? Explain each one of them. (2009)
Q.4 Explain the quantity Theory of Money with suitable examples. (2007)
These are both very simple questions, but for 20 marks I would think we need more than just the basics. For the demand for money let's say we follow the following outline
i. Define money (precise functions, uses etc- just basic)
ii. State, explain, give examples and illustrate diagrammatically the three kinds of demand for money
iii. Analyse how that leads to the liquidity preference theory and the interest rate determination.
iv. Evaluation/conclusion
I wonder if that is sufficient or do we need to go in detail about how that is then used to derive LM for IS-LM, or QTM, or refer to determinants of Money Supply or its use in monetary policy etc? I could think of a lot of relevant material to put in but I guess it would be wise to know how much analysis do these questions demand?
Your feedback will be much appreciated

money demand n QTM
 

regarding money demand question i would proceed as follows:
defining money n then its uses(medium of xchange, store of value...)
then classical view about money demand followed by keynesian view n then a general analysis...i dont think there is a need to go as far as ISLM analysis.basically we are supposed to explain the 3 motives of keynes so focuss on them(u can refer froyen)
QTM is alreay a lengthy question!here in example i think we need to put numerical values in QTM equation n exemplify the relationship of M n P.if u do this for all versions the question is already enough..n also put examples from real life like german hyper inflation/ in USSR n if u can add something from pakistans economic history..hope u get something from it!

[QUOTE=Tutankhamen;161787]Respected Seniors,

I need some assistance regarding the structure of answers for Economics. I have consulted various books and their level of difficulty and detail varies so much that I am unsure about what level of detail and analysis do the exam questions command. If anyone can be kind enough to give a general outline with an example, and if possible, your contact email/number so I could ask specific questions.

Your help is much appreciated.[/QUOTE]
@Tutankhamen

Dear I am M.A (Economics), but still not taking Economics as my optional for CSS because of its lengthy paper pattern. However I would like to share here my M.A (Economics) Experiences, well I think that most of our economic theory has Graphical representation thus I suggest following pattern.

[B]Introduction[/B]: Under this heading give a brief introduction of the topic u r attempting.
[B]Definition[/B]: Provides as many definition as u know including the reference(source)
[B]Explanation[/B]: Draw a graph at the right most side of the page and then start explaining ur answer with the help of that graph...and yes don't forget to give a reference number to the graph i.e. G-1a,G-1b... for Question # 1's answer and G-2a, G-2b...for Question # 2's answer respectively.
[B]Conclusion[/B]: Here give a brief conclusion regarding ur attemt...

Hi,
I had opted economicsas an optional subject. I would like to share my experiences regarding your query.
It is a common perception that economics paper in CSS is the same as one has learned in his or her graduation/ masters levels.
Actually economics is like any other optional subjets and it must be treated as such.
Questions that appear in paper usually contain multiple queries which need to be answered as you can see in the examples quoted by you.
What you have to ensure is that:
1. Your answers must answer all queries in the question
2. Every question should b answered by dividing the answer into headings and sub-headings.
3. Keep your answers as simple as possible; i.e. avoid complicated mathematical equations. However graphs and equations should be given where it is necessary.

Thank you all for your kind suggestions. From your feedback, I gather that the level of difficulty and detail is not too high. I have grasped the general idea given the basic outlines. If I may ask another question, which I hope will benefit other aspirants as well.

Q6. High tax means large disincentives to productive efforts, that aggregate supply and tax revenues are both restricted. Give your argument for a just tax system. (2006)

Other than the basic types, characteristics, and purpose of a sound tax system, if one was to analyse the statement in the question, I wonder if the following analysis is sound?
i) High tax --> Disposable income falls --> AD shifts down--> lowering both the price level and the National income (Y) leading to a deflationary gap (start at full employment)
ii) Higher tax rate means higher tax revenue, which could finance higher government spending, assuming the increased Gs completely off-sets fall in AD and shifts the AS curve rightwards- it will eliminate the deflationary gap, decrease the price level but increase the National income.
iii) Given a developing economy like Pakistan, the govt is most likely to tax consumption rather than saving, which by implication means a fall in the i.r (can be shown through IS-LM or Liquidity preference,) which could in turn induce higher investment in later years.

I want to know if this analysis is correct, and secondly, given enough time, if it would be relevant in questions pertaining tax implications (and their variants).

[QUOTE=Tutankhamen;162095]Q6. High tax means large disincentives to productive efforts, that aggregate supply and tax revenues are both restricted. Give your argument for a just tax system. (2006)


i) High tax --> Disposable income falls --> AD shifts down--> lowering both the price level and the National income (Y) leading to a deflationary gap (start at full employment)
ii) Higher tax rate means higher tax revenue, which could finance higher government spending, assuming the increased Gs completely off-sets fall in AD and shifts the AS curve rightwards- it will eliminate the deflationary gap, decrease the price level but increase the National income.
iii) Given a developing economy like Pakistan, the govt is most likely to tax consumption rather than saving, which by implication means a fall in the i.r (can be shown through IS-LM or Liquidity preference,) which could in turn induce higher investment in later years.

[/QUOTE]

i think (although i may b wrong according to others) the reasoning we are supposed to give is already there in the ques.ur reasoning n logic arent wrong but they may not apply here.
"High tax means large disincentives to productive efforts,"here its presumed that the tax is being applied on savings n consequently inv. so ur 3rd point is not relevant here+the question isnt particularly about pakistan.

"that aggregate supply and tax revenues are both restricted."again its presumed that tax revenues arent much so no need to add the 2nd point.
now as far as ur 1st point is concerned, the question isnt addressing inflation explicitly+fall in AD doesnt necessarily lead to delationary gap n dont u think the question is focussing the supply side..
i think ur answer should directly focuss the ques. so if we proceed like this.
large tax means lower savings n disincentives for investment..this will affect the supply side of the economy..AS will lower n since economic activity will reduce, we assume that tax revenues would b lower.then give ur arguments about an ideal tax system(having a broad base, lesser burden on poor..here u may giv pros n cons of various types of taxes to make arguments+add examples to verify ur arguments) n i dont think the types of taxes n their characteristics should b written straight away..it gives the impression tha u r just reproducin the crammed stuff .. n this question is essentially theoretical n natrure..
so what do u say?

@Tutankhamen

Let me give my explanation:

1. Your first explanation is the main argument of Supply Siders against hike in tax rate. They think that lower tax rate will increase the incentive to work, thereby increasing aggregate supply. However empirical results are mixed on relative success or failure of this argument. However your logic is very right, although Neo Classicals may differ. Regarding your answer about just tax system, then it is usually thought in economics that direct taxes are more equitable than indirect ones, however regarding efficieny indirect taxes are more efficient. There is much debate on equity vs efficiency. Since you are answering a subjective idea "just tax system", then in my thinking equity is the main principle you would prefer. So imposition of direct taxes is more likely to be just, although debatable.

2. Your second argument is flawed. Even if we assume that increased tax revenue is reinjected in the economy through government spending, then how it is going to change aggregate supply the way you are saying?

I agree to Xenia, that question is not about Pakistan, so avoid it.

Regards

@Xenia
I was treating the statement as a discuss statement, not an assertion to take as given. Because implementation of a high tax which hinders productive capacity, impedes growth and restricts tax revenue is rather an unlikely tax policy. But even if we take the statement as given and assume that the tax is high, the first and most potent consequence would be a fall in disposable income and investment, which shifts the AD curve to the left. The only way a higher tax could shift the AS is through a fall in prdouctivity, and/or rising wages or costs of production. In that case, both the AD and the AS will shift to the left, with the new equilibrium at the same price level (if both the AD and AS move to offset/or proportionally) but at a lower level of national income. How can one link this to a just tax system?

@newstudent
Thankyou for your feedback, it is very helpful. I do think that this question is mostly theoretical and I have a feeling that makes it relatively low scoring. What would you suggest regarding such theoretical questions? Like this question is a typical out of textbook debate on merits vs demerits of direct and indirect taxation.