Exam Advice: Multiple Causation

No doubt you have found in your revision that many factors can influence the direction of a single economic variable. For most key issues there are many short-term and longer-term contributing factors and strong students are aware of multiple causation and can bring this explicitly into their answers. For example…

*The causes of unemployment (demand and supply side causes): Presentation here

*The causes of inflation (cost push and demand pull, domestic and external): Presentation here

*Reasons behind changes in the exchange rate (trade, foreign direct investment, other capital flows, central bank intervention): Presentation here

*The many factors that the Bank of England and other central banks take into account when setting policy interest rates: Presentation here

*Causes of economic growth in both the short run and the long run (AD and LRAS causes): Presentation here

*Multiple causes of market failure and of government failure: Presentation here:government failure

*The reasons why producer cartels are often unstable: Presentation here

*The factors driving globalisation (and more recently de-globalisation): Globalisation blogs here

Examiners will always reward students who make an attempt to use relevant economic analysis and make it clear that several factors affect a particular economic variable (inflation, investment spending). Often we make use of the ceteris paribus assumption to isolate in theory the effects of one variable – but the real world does not allow this to happen! Challenging the ceteris paribus assumption can also add weight and value to your answer.