Full transcript
0:02Wasted money on cures.
0:06Forgot how to fix myself.
0:11They say that time is free.
0:15Then why is it so precious?
0:19Oh, I'll save
0:21meories
0:23in my head
0:26like polo ro on wall. They remind
0:32you to look ahead.
0:36Time is running out.
0:41[Music]
0:45Time is running out.
0:50[Music]
0:54Lately I've lost my track
0:58my track.
0:59>> I've s the deepest seas
1:02deep hoping I find something
1:08>> to bring back better times.
1:11Oh, I'll save
1:13me
1:15in my head.
1:18Like polar o
1:22they remind
1:24you to look ahead.
1:28Time is running out.
1:30[Music]
1:33Time is running out. Time is running
1:36out. Time is running out. Time is
1:40running out. Time is running out.
1:45Time is running. Time is running out.
1:48[Music]
1:54Time is running out.
1:58[Music]
2:04Oh,
2:06what if my best days are over? They
2:10can't be over.
2:14[Music]
2:16They can't be over.
2:21Time is running out.
2:23What if my best
2:26over? You got me over
2:29time.
2:30[Music]
2:32Yeah. Yeah. Time is running out.
2:45Time is running out.
2:49[Music]
2:57Well, good evening. It's Monday night,
2:596:00, and uh welcome to the second in
3:02our autumn series of live streams where
3:05we take a key topic. Good evening, Ben.
3:07take a key topic or a key skill in this
3:10week's case analysis. We just give you
3:12some nice hopefully simple
3:14straightforward advice about how to
3:15build some techniques that we know work
3:18in the exam uh as you head into your
3:21year 13 if you're a second year student
3:22or maybe you're you're taking economics
3:24for the first time. So, welcome to you
3:26all. We've got 25 minutes or 30 minutes
3:27to look at analysis tonight. Uh don't
3:30forget to click subscribe if you want to
3:32make a contribution to the chat window.
3:34And as we've seen, we'll showcase some
3:36of the best answers as we go through.
3:39Let's make a start with our big reveal.
3:42This time, instead of an economy, which
3:43we did last week, here are five clues to
3:46the name of a business. Oh, by the way,
3:49welcome to Mia. She got she did the
3:50renovs this summer and got an A.
3:52Fantastic result. Many congratulations
3:54to Mia. Now, this business started out
3:57with just 30 cows in 1961.
4:02I know what you're thinking. I know the
4:03name of a business that was founded in
4:051961,
4:07but it only had 28 cows. Can I round it
4:10up? No, you can't. So, what do you think
4:13the name of the business is? Started
4:14with 30 cows in 1961.
4:18That's your first clue. First person to
4:20get the right answer, we will showcase
4:23their headquarters. Their corporate HQ
4:25is in Somerset in the UK. It's a UK
4:28brand that started out with just 30
4:31cows. They've now got more cows, by the
4:33way, than they did in 1961. What do we
4:36think? Any answers coming through?
4:39Here's the third clue. It's now one of
4:41the UK's biggest organic dairy
4:44producers. So, it's it's got to scale,
4:47but it's still familyowned. So, it's a
4:50well-known brand, still familyowned. the
4:54biggest organic dairy producer still we
4:57haven't got a right answer yet in the
4:58chat window please do have a go
5:01uh number four the turnover last year
5:03the reason I chose this example it rose
5:06above a million pounds a day in 2024 25
5:11those of you watching on catch up wonder
5:13if you've got the answer yet
5:15and the fifth clue is the third largest
5:19yogurt brand in the UK by revenue Hayden
5:23has gone for Derry Lee. A good answer,
5:25but Ella gets the prize and the hattip
5:30uh for saying Yo Valley. Great. Well
5:32done, Ella. That's the right answer.
5:34Okay, good start everybody. Let's try
5:35one more. Uh
5:38lots of good answers came through. Dair
5:40Lee Müller
5:42Valley. Here's the big reveal number
5:44two. It's founded in 2004
5:47in London. So, it's a relatively new
5:49business. Relatively new business.
5:53Clue number two, it's famous for luxury
5:55chocolate with unusual flavors and sleek
5:58and often quite expensive packaging.
6:02Okay,
6:04so if you know I know them business
6:06founded in 2004 in London but with with
6:09basically vanilla flavors. That's not
6:10the answer. Number three, they actually
6:14own as part of vertical integration a
6:15real cocoa plantation in St. Lucia
6:18called the Labau estate.
6:21Fourth clue coming up.
6:23It's acquired by Mars in 2024. So those
6:27of you studying business as part of your
6:29year 13 economics this year, really good
6:32example of acquisition.
6:34Attack 345 saying lint. Great answer.
6:39Fifth clue, the company has over 164
6:42locations, retail outlets, and well over
6:452 and a half thousand employees in the
6:47UK and also in the United States. Now
6:50we're getting lots of answers coming
6:51through. Kadisha I think or AI tells us
6:56Ella also got the right answer. Olberg
6:59and Costas but we think Kadisha came in
7:01correctly. It is indeed hotel shakala by
7:04the co-founder Angus Farewell.
7:08Great stuff. Right. Okay. Let's crack
7:09on. So we're going to spend if it's okay
7:12with you 15 20 minutes or so looking at
7:14the skills of analysis.
7:17Uh, and last week we did application.
7:20So, do go back to last week's
7:21presentation if you get a chance.
7:23Basically, analysis demonstrates your
7:25ability to think like an economist. So,
7:27you go into an exam or you're writing an
7:29essay and you've got toolkits,
7:32concepts, both micro and macro, and you
7:34want to bring those concepts into play
7:37by explaining processes step by step.
7:40Think of stepping stones across a liver
7:43rather than just blindly stating
7:45outcomes with with certainty. Now, as
7:49we're going to show today, good analysis
7:51often uses what we call connective
7:53phrases. These are little words and
7:56phrases that if you practice this year,
7:59you'll do really well in the summer of
8:01next year. Such as because, as a result,
8:05therefore, which leads to, consequently.
8:09These are connected phrases which help
8:11to show a logical chain of reasoning and
8:14all exam boards. I mark thousands of
8:16scripts every year. We're looking for
8:18the quality and often succinctness of
8:21your analysis. Okay. Diagrams can help
8:23support the analysis. In some boards
8:25they count as application, but always
8:27refer to a diagram in the body of your
8:29answer. Don't leave it hanging out to
8:31dry. And don't forget analysis goes with
8:34application.
8:35So use the such as seasoning approach
8:37which we talked about last week. Okay.
8:40So what do we mean by uh stronger
8:44analysis? Let's take one example. So
8:46good analysis is about exploring
8:49exploring cause and effect. But taking
8:52the time to think about the different
8:54steps within that. So there could be an
8:56initial effect for example, there could
8:59be a secondary outcome, a follow on or
9:01flow flow effect. There could be
9:03longerterm consequences. It's often good
9:05idea to think about initial, secondary,
9:08and third round effects in your
9:10analysis.
9:12Really good analysis,
9:14and it doesn't have to be long or
9:16lengthy, focuses on the how and the why.
9:19So, let's take an example. The UK
9:20government just announced a new £3,750
9:25subsidy, consumer grant for people
9:28buying selected electric cars. Okay?
9:32automatically applied at the point of
9:34sale. This is not a subsidy for
9:36producers. It's a direct grant for
9:39purchasers, consumers. So the really
9:41good answer would think about how and
9:43why a subsidy might affect both
9:46consumers and producers in the market
9:48for EV vehicles. And it's just it's just
9:50taking a step back and saying, well, let
9:51me build my analysis and see where it
9:54takes me. That's what we mean by cause
9:56and effect. Okay, so moving on.
10:00The key really and this is the thing to
10:02practice this year is to try and build
10:06your chains of reasoning. So definitions
10:10really don't count as analysis. A lot of
10:12students are told to start an answer
10:14with a definition. It's called little or
10:16no marks in most exam mark schemes. In
10:18fact, definitions of knowledge. So don't
10:21stop at a definition. Barely start with
10:23it. But push the answer forward. So try
10:28to develop connective chains of
10:30reasoning. Here's an example. An
10:33increase in income tax will reduce
10:35households disposable income. Good use
10:37of concepts
10:39which means that connective phrase
10:41consumption is likely to fall. This then
10:45reduces aggregate demand which keter as
10:48part of us can lead to weaker shortrun
10:50growth. Now that's quite a nice chain of
10:53analysis. Increase income tax can weaken
10:55growth.
10:57Okay. Uh we've added to it by talking
10:59about disposable incomes and consumption
11:01and aggregate demand and throwing in the
11:04competitive uh the keterist purpose
11:06assumption. Okay. So let's have a look
11:08at some more examples here.
11:12The key here is to is to think about
11:14connectives. Connectives help to signal
11:17that you're following a logical
11:19plausible chain of reasoning. Okay. So
11:22sometimes connectors could be causal
11:23links using the words because, since,
11:27due to, or as a result. It could be
11:30consequences. So this means that, this
11:33causes, leading to, therefore. So you
11:36can build some consequence words in. And
11:38conditionality is important as well as
11:40part of your analysis. So the effect of
11:42X on Y depends on or providing that X is
11:46in place, etc.
11:48assuming we can often bring in an
11:50assumption as part of your analysis. Uh
11:53the extent of this effect relies on
11:56something. Okay? So keep those little
11:58connectives in mind everybody whether
12:00it's live and watching on catchup. If
12:03you can add in a few connective words to
12:08glue together a series of stepping stone
12:11points. Okay, let's move on. Let's take
12:16uh oh before we look we're going to look
12:17at two examples tonight. One is micro
12:19one is macro. Don't forget application
12:22analysis go together.
12:24So if you write a paragraph which is
12:26purely purely analysis you won't get the
12:30top marks uh because the exams are
12:33looking for application. As we talked
12:35about last week the data in the extract
12:38should be in the answer as well quoting
12:41case study material etc. So avoid
12:43writing purely in theoretical abstract
12:46terms. For example, if UK policy
12:48interest rates fall over time from 5% to
12:504%, which is where they are now, this
12:52might cause the pound to depreciate
12:54against the euro. Bit of analysis,
12:56making UK exports of goods and services
12:59such as electric vehicles and airfares
13:02to and from the EU more price
13:04competitive. So we're putting in some
13:05application in there to help cement and
13:09glue together. It's like a bit of screed
13:12to really bring together the analysis.
13:15Okay.
13:17So, here we go. Let's think about uh how
13:21you build analysis. Quick reminder of
13:24the importance of diagrams. I'm giving
13:26you here a couple of diagrams from
13:28previous questions. This was a question
13:29about the minimum wage, I think. And uh
13:33it's important to practice your diagrams
13:34before you go on the exam because if
13:36that appears on my screen as an
13:37examiner, I'm thinking interesting. You
13:40know, there's a lot there's a lot
13:42happening in that diagram and it's clear
13:44that that student hasn't quite smashed
13:47the quality of diagrams the examiners
13:49will be looking for. Another good
13:50example coming up next, uh you've got to
13:53develop your diagram. So this is a
13:55diagram showing the effective increasing
13:56the minimum wage. And it's clear that
13:58the student hasn't really thought about
14:01minimum wages in terms of labor demand
14:03and labor supply. So, it's really
14:05important that you provide good diagrams
14:08to help support your analysis.
14:12Uh oh, okay. Emanuel is in the in the
14:14building. Welcome to Emanuel. Um message
14:17from Emanuel. Just want to say thanks
14:19for all the revision videos last year. I
14:20got an A on the final exam. That's
14:22wonderful news. Fantastic.
14:24Okay, we're going to look at two
14:26examples and give you a chance to have a
14:28go and let's see what you can come up
14:30with. Okay,
14:32here's the chart showing the living wage
14:34or the national minimum wage in the UK,
14:36pounds per hour since 2016.
14:39And of course, this is always in the
14:41minds of examiners, topical issue.
14:43Minimum wage gone up from £720 per hour
14:46to 1221.
14:49Okay, so the context here is an increase
14:51in the minimum wage. Let's have a go at
14:53this one. Uh we're going to have a one
14:56minute chains of reasoning challenge
14:58here. We're not looking for a paragraph.
14:59Just analyze one likely effect of an
15:03increase in the minimum wage for a
15:06business of your choice. Have a go and
15:08let's see what comes up on the on the
15:10chat window. Have a go.
15:21the minimum wage is going up. Analyze
15:24one likely effect of an increase in the
15:27minimum wage for a business of your
15:28choice.
15:32And let's see what people in the chat
15:34window can come up with.
15:48So, what analysis would you
15:52include in there?
16:03Of course, the question is asking you to
16:05focus on businesses rather than
16:07consumers.
16:14And thank you to Sienna with a lovely
16:17answer. This is exactly what we're
16:18looking for. So, thank you. Sienna will
16:20showcase some more in a second. Labor
16:22cost for the business will increase as
16:24they will have to pay each worker more
16:25money per hour of worked. Hence, good
16:28connective. They will have an increase
16:30in total costs. Excellent. Charlie B
16:33adds in actually don't forget the higher
16:35cost of national insurance
16:36contributions. So, it's that classic
16:38double whammy, isn't it? It's the
16:39minimum wage going up under national
16:40insurance. So really good there for uh
16:44she getting the idea of the the analysis
16:47and the chain of reasoning and I want to
16:49take that idea and just develop it a
16:51little bit in a second or two. Okay. So
16:54let me take you through my answer.
16:57Here's the analysis and we'll read from
16:59left to right. Uh higher labor costs
17:01higher labor sorry cost businesses such
17:04as McDonald's that's application by the
17:06way causing increased variable cost and
17:09rising marginal cost. Now you may not
17:11have done cost theory yet in year 13 but
17:13if you haven't you you soon will. So the
17:15variable cost of employing people goes
17:17up the marginal cost of the business
17:20goes up leads to pressure to increase
17:23retail prices connective phrase there a
17:26consequent possible fall in demand
17:29depending on peed price elasticity of
17:31demand
17:33and resulting in the impact on revenues
17:36and profits. So that would be a really
17:38good I'm just taking Sienna's initial uh
17:41thought there higher labor costs. I've
17:43tried to expand and develop the chain of
17:46reasoning if that makes sense everybody
17:48to link it to revenue and profit but
17:51there's links there stepping stones
17:53along the way. Now that would turn into
17:56a really good paragraph particular if
17:57you had a diagram to go with it and that
17:59will be an excellent analysis paragraph.
18:02Does that make sense everybody?
18:04The key here is that if you build this
18:06kind of analysis, the evaluation
18:10flows from the analysis.
18:13Good analysis, and here's here's the
18:15phrase for today. Good analysis opens
18:18the door to strong evaluation. I'll say
18:22that one more time. Good analysis opens
18:24the door to strong evaluation, which you
18:27bring to a second paragraph. So, let me
18:29take you through some evaluation of
18:30these points.
18:32uh labor costs affecting a business such
18:34as McDonald's. Well, it assuming
18:35productivity remains the same. Okay.
18:38Elliot says, "Please can you repeat that
18:40last bit? I had an advert."
18:42Indeed, good analysis opens the door to
18:46strong evaluation. So, Elliot, if you
18:47can work on your analysis, you'll find
18:50you'll get better marks for analysis and
18:52evaluation going forward. So,
18:55productivity might go up. If workers are
18:57being paid more per hour, they might
18:58become more efficient. uh labor costs go
19:01up. Yes, but the evaluation on the next
19:03slide uh depends on labor cost as a
19:06percentage of a firm's total costs. See,
19:09some businesses like hospitality,
19:10hotels, catering, restaurants, and
19:13things have very high labor costs. Other
19:14businesses are capital intensive.
19:16Minimum waste doesn't affect them quite
19:18as much. Okay. Uh an expert evaluation
19:22uh possible fall in demand depending on
19:25PD. Well, that depends on the price
19:27sensitivity of consumers.
19:29Do they still buy McDonald's products
19:32when the price goes up? Uh and also
19:34what's happening to their incomes? Some
19:36people will get their incomes will go up
19:37if they get a higher minimum wage. They
19:39can then spend more. And the final uh
19:42valuation point uh businesses may
19:44respond by investing in laborsaving
19:47technology. So over time you might
19:49replace security guards with cameras,
19:52self-service machines in restaurants and
19:54uh cafes and and supermarkets. Do you
19:57see here that the blue bit at the top
19:58there is the chain of reasoning
20:02and each of those points leads or
20:04invites good evaluation. So this is what
20:07we'd love you to do this year as
20:09students. You've got plenty of time
20:11before mocks and exams. Keep working at
20:15clear chains of reasoning. You will get
20:17better assign assignment by assignment
20:20and then good analysis opens that door
20:23to good evaluation.
20:25Let's try one more. So, let's look at
20:28monetary policy. Look at uh UK interest
20:31rates. Here's a chart bang up to date
20:33showing the monthly base rate of
20:35interest set by the monetary policy
20:37committee. And you can see the base
20:38rates have fallen from 5.25%.
20:41In the spring of last year down to 4%
20:43and are likely to fall a bit further.
20:45Now, keep in mind the exam in 2026
20:49is probably set back in the summer of
20:51this year if not before the spring. So
20:54often times things happening now appear
20:56in exams a year or so later. So take
20:59that context. Interest rates falling.
21:02Here's your one minute challenge. Let's
21:04see if somebody can uh compliment
21:06Sienna's point. Analyze one likely
21:09effect of a fall in interest rates on
21:12households in the UK. Have a go.
21:27We're just looking for analysis. What
21:29point would you make? Can you develop a
21:32couple of sentences and with a chain of
21:35reasoning?
21:42So Elliot says mortgages will be
21:43cheaper. Now Elliot, will you then
21:44develop that point in a sequence?
21:48Now, how and why and why does that
21:50matter in terms of households?
21:53So, your next sentence would develop the
21:55chain.
22:03What we're looking for is people to make
22:05one point and develop it.
22:08Okay. So, Hayden's making two good
22:10points here, but the second point
22:13doesn't quite connect to the first
22:15point. So be looking for Hayden there to
22:17develop his first point.
22:21Okay, lots of good answers coming
22:22through. Thank you. Here's Jasmine's
22:24point. If interest rates fall, savings
22:26being less desirable, this means the
22:27household's MPC will increase. Correct.
22:29So the second sentence there, Jasmine
22:32does connect to your first sentence and
22:34you can then take it further. Orbit says
22:37when interest rates fall, saving money
22:38is less attractive causing people to
22:40consume more leading to an increase in
22:42AD. Good. So you've got already one
22:44chain of reasoning, one connective
22:46there. Uh Charlie B comes in with a
22:49really good point. He says lower
22:51mortgage rates equals more effective
22:53disposable income. It does actually
22:54Charlie meaning uh an increase in
22:57consumption. And again Charlie once
22:59you've started that process it's fairly
23:01easy to develop it isn't it a bit
23:03further talk about the impact on
23:04aggregate demand or GDP
23:07or or employment or jobs and an
23:09application would be to think about uh
23:12industries where cheaper loans really
23:14make a difference to demand. Okay, some
23:17good stuff coming through.
23:19Thank you to everybody contributing in
23:20the chat window. Some great answers. Uh
23:24can we got one more coming through? we
23:25spot maybe with a point similar I think
23:29one likely effect is an increase in
23:31consumption in GK will see that savings
23:33less desirable and thus will extend
23:34demand you're getting the idea you're
23:37getting the idea and takes it to the
23:39next level you made some great
23:41contributions last week we remember
23:43lower mortgage rates more disposable
23:45incomes rising consumption rising AD
23:47rising GDP yes and each of those points
23:51you can actually then start to challenge
23:52and question Okay, can we go to Sienna?
23:55I think Sienna is probably going to get
23:57the award tonight for our top
23:58contributor.
24:00Uh, some people saying Sienna's on fire.
24:03Uh, house sales will feel more inclined
24:05to purchase higher price goods such as
24:06luxuries due to decreasing the interest
24:07required on those items. Yes. So,
24:09particularly the things you might buy on
24:10credit, hence aggreate demand will
24:13increase as households spend more. Yeah,
24:15there's certainly two. And again, what
24:17you're doing there, Sienna, very
24:18successful is you're building a chain of
24:20reasoning without going off on a
24:22tangent. you're keeping everything
24:24closely aligned which we love to see.
24:27Well done. Can I show you mine again?
24:29I'll show you here my chain of reasoning
24:31and the evaluation that it stimulates.
24:35So analyze one likely effect of a fall
24:38interest rates on households. It leads
24:40to a fall in the cost of borrowing such
24:41as
24:43variable rate mortgages. So I'm trying
24:45to bring in more something more specific
24:48a variable interest rate mortgage which
24:50I've got at the moment. Consequently, it
24:52reduces mortgage payments. So, don't be
24:55afraid to fill in the gaps. Sometimes,
24:58uh it could be the case that um you you
25:02leap from A to C, but there's a there's
25:04a little B point that you could bring
25:06into your sequential chain of reasoning.
25:09So, a quarter point reduction in
25:10interest rates reduces mortgages by 15
25:12pounds per month. Okay, enough for
25:15Domino's pizza, let's say. As a result,
25:18it leads to an increase in effective
25:19disposable incomes. In turn, this gives
25:23consumers more spending power. This then
25:26increases domestic spending and
25:27aggregate amount.
25:29So, my chain of reasoning is not totally
25:32dissimilar to the ones that you throwing
25:33into the chat window, but I'm trying to
25:36I'm Can you see what I'm trying to do
25:37here? If it makes sense, please say yes
25:38in the chat window if it makes sense.
25:40I'm just trying to really make those
25:42steps very sequential
25:45and I it's a bit like I don't know
25:47pointing a pointing the walls of a
25:48building. I don't want big gaps. I want
25:51this to flow but I want to get that the
25:55how and the why. The how and the why.
25:59Okay.
26:00And again good analysis invites
26:02evaluation. Market interest rates are
26:04not set by the Bank of England. Will
26:06mortgage rates fall? Usually yes. they
26:09don't have to. Second evaluation point
26:12is that millions of people are not on a
26:14variable rate mortgage. Many people have
26:16fixed their mortgage for two, three,
26:19five years. So they won't see the
26:21effect. Um another evaluation point is
26:25that uh yes some people get more money
26:28to spend because the mortgage rates gone
26:30down but millions of people save money
26:32and the interest rates on savings will
26:34go down. That could be an offsetting
26:36factor. So savers don't see the benefit.
26:39And I think there's one more evaluation
26:40point I could mention. Uh will people
26:43spend more? It depends on the state of
26:46consumer confidence, the fragility or
26:48the strength of animal spirits. Uh
26:50people's perceptions about their own
26:52circumstances. So again, just taking a
26:54moment here, just taking half of a step
26:56back. Um the blue is the blue bit there
27:01is your chain of reasoning. By the way,
27:02you can download this presentation
27:05straight afterwards. we'll provide a
27:06link. Um the blue is the chain of
27:09reasoning and then beneath it are the
27:12little options and opportunities there
27:13for evaluation. But thank you to those
27:16people who contributed in the chat
27:18window. That was fantastic.
27:20So there we go. We've looked at two
27:22examples of how to use chains of
27:25connective reasoning in your analysis.
27:27One was about the minimum wage going up
27:29and one was about uh interest rates
27:32going down.
27:34Hopefully that's given you a little bit
27:36of confidence, a bit more confidence in
27:37how to build chains of reasoning. It's
27:40what the examiners are looking for.
27:42All of our sessions, all of our free
27:45live streams on Monday at six o'clock
27:46are designed just to give you that
27:48little bit of extra confidence on key
27:50topics. Huge thanks in particular to
27:53Sienna, I think, who gets our collective
27:55vote, the contributions, which was
27:57superb. Hopefully encouraging more of
27:59you to do that again next week. Next
28:02Monday 6 PM we're looking at evaluation.
28:06So last week application, this week
28:08analysis, next week evaluation, and then
28:10we get into some topic live streams each
28:13Monday night as we go through the autumn
28:14term. I really appreciate you all being
28:17here. We appreciate the collective
28:18coming together. Thanks for joining in.
28:21As always, stay happy, stay healthy,
28:24stay curious, and I hope to see you
28:27sometime soon.