May 19, 2014 by Paul Goldsmith
As the AS Macroeconomics exam approaches, I have trying to explain to my pupils the importance of getting the basics absolutely right if you want to succeed. It doesn’t matter how wonderful your knowledge of current economic affairs is – how skilled you are at developing chains of reasoning for economic analysis, and how expert your evaluation skills are, if you don’t have a way of remembering the basic knowledge needed that underpins everything you do in the macro exams, you have a big problem.
This is especially true if you are doing the exam boards where you only have data response – where the temptation sometimes is to think you can “get away” without revising certain areas. Big mistake – the questions on the area you are expert in could be devilish and those on the area you haven’t revised well could be very easy (particularly the long essay at the end).
If you don’t put, safe in your brain somewhere, the following – you will desperately struggle to answer a lot of questions:
1) The Government’s macroeconomic objectives
2) The injections and leakages from the circular flow of income
3) The components of aggregate demand and supply
4) A well-labelled ADAS diagram
5) Fiscal , monetary and supply-side policies – descriptions and transmission mechanisms
In fact, I advise my pupils, the minute they can start writing – to quickly jot these down – at a time when they are most likely to remember them, so they can refer back to them when needed. It can make a difference as many pupils have a ‘mind blank’ when they most need to recall something like a macroeconomic objective or all the components of AD.
A way I have managed to get through is again using a football analogy. I show the video above of the goals scored by the 1982 Brazil World Cup team. Some of them are works of art. The pupils gasp at some of them. The team is rated the best NOT to win a World Cup.
Which is the point. They were an attacking force, but they had no proper defensive midfield anchorman, their defence was shaky and their goalkeeper unreliable. The Brazil teams that won the World Cup in 1994 and 2002 had at their base an extremely strong defensive set-up – from goalkeeper to defenders to defensive midfielders – which gave their attacking stars the freedom to do what they did best. In 1994 – the likes of Dunga did the hard work so that Romario and Bebeto could thrive (Brazil let in three goals the whole tournament), and in 2002 it was Claudio Silva who provided the base for Ronaldinho, Rivaldo and Ronaldo to go ahead and win the tournament (conceding one goal in the entire knockout stage). The 1982 team simply didn’t have this set up – and in fact in the game that knocked them out – a 2-3 loss to eventual winners Italy, they chose at 2-2 to go all out attack, because their manager didn’t feel he had the team to defend and then counter attack. The 1982 World Cup team could score goals – football is a game in which you have to score more than your opposition, and if your opposition scores three times that leaves you a LOT to do.
Bringing this back to economics, your definitions, diagrams, objectives, ADAS and policy knowledge is your defence and defensive midfield. Without them, your analysis, evaluation and writing skills are simply not enough. So if you want to know what to do over the next two days – take my advice – get those basics lodged in your brain.