Section A
Case study
Is Nigeria being held back by its dependence on oil and gas?
In the extracts: Nigeria, GDP, African Continental Free, African Development Bank, Malaysia and Indonesia, Gross Domestic Product, African Department, West Africa, Trade Area, Nigerians
Q1(a)Compare2 marks
Compare the government budget balance of Nigeria in 2016 with the government budget balance in 2020.
TopicFiscal policy
Q1(b)Demonstrate2 marks
Using a production possibility curve (PPC) diagram, demonstrate the impact of the rising level of unemployment on the Nigerian economy.
TopicProduction possibility curves4.5 Unemployment
Q1(c)Consider4 marks
Consider the extent to which the removal of fuel subsidies in Nigeria would lead to an increase in inflation.
TopicPrice stability3.2 Methods and effects of government intervention in markets4.3 Aggregate demand and aggregate supply analysis
Q1(d)Assess6 marks
Assess whether using supply‑side policy is the best way to diversify the Nigerian economy away from its dependence on oil and natural gas exports.
TopicSupply-side policy
Q1(e)Assess6 marks
Assess whether adjusting the collection of direct tax or indirect tax is likely to be more effective in increasing the tax revenue collected by the Nigerian government.
TopicFiscal policy
Section B
Q2(a)OptionalExplain8 marks
With the help of a diagram(s), explain what is meant by consumer surplus and producer surplus and consider whether a rise in the price of a product because of higher costs of production is likely to always reduce the consumer surplus.
Mark splitKnowledge 3Analysis 3Evaluation 2
TopicConsumer and producer surplus2.4 The interaction of demand and supply
Q2(b)OptionalAssess12 marks
A government wishes to keep the price of an essential food, such as rice, affordable to help low‑income households. Assess whether a policy of fixing the maximum price for an essential food is likely to be more effective than a policy of making transfer payments to low‑income households.
TopicMethods and effects of government intervention in markets
Q3(a)OptionalExplain8 marks
With the help of a diagram(s), explain what is meant by equilibrium in a market and consider the extent to which the equilibrium price and equilibrium quantity are likely to change for a product following an increase in the wages for labour across the whole economy.
Mark splitKnowledge 3Analysis 3Evaluation 2
TopicThe interaction of demand and supply
Q3(b)OptionalAssess12 marks
Entrepreneurs are vital in an economy to achieve long run economic growth. Assess whether encouraging entrepreneurship or increasing another of the factors of production will be a more effective way to achieve long‑run economic growth.
TopicFactors of production4.4 Economic growth
Section C
Q4(a)OptionalExplain8 marks
Two countries each produce two products and wish to trade with each other. Explain the difference between the principles of absolute advantage and comparative advantage and consider whether the principle of comparative advantage is always the more important influence when each country is deciding whether to trade with each other.
Mark splitKnowledge 3Analysis 3Evaluation 2
TopicThe reasons for international trade
Q4(b)OptionalAssess12 marks
Assess whether protectionism is the best way to correct a deficit in the current account of the balance of payments.
TopicPolicies to correct imbalances in the current account6.2 Protectionism
Q5(a)OptionalExplain8 marks
Explain the difference between cost‑push and demand‑pull inflation and consider which is more likely to occur if there is a depreciation in the exchange rate of a country with few natural resources.
Mark splitKnowledge 3Analysis 3Evaluation 2
TopicPrice stability
Q5(b)OptionalAssess12 marks
Assess whether monetary policy is the only way to control a high rate of inflation.
TopicMonetary policy
