Section A
Q11 mark
1 In 2017 Turkey's deficit on the current account of the balance of payments increased to $4.2 billion. This increase in the deficit on the current account is most likely to have resulted from
- Aan increase in the value of imports
- Ban increase in the value of exports
- Ca decrease in government spending
- Da decrease in employment
Show the answer
The answer is A.
TopicAggregate demand
Q21 mark
2 The table shows Malaysia's rate of inflation between February 2017 and July 2017. Month Rate of inflation (%) February 4.5 March 5.1 April 4.4 May 3.9 June 3.6 July 3.2 From this table it can be deduced that
- Athere was deflation between April and May
- Bthere was disinflation between May and June
- Cthe rate of inflation was at its highest in July
- Dinflation increased at a constant rate between May and July
Show the answer
The answer is B.
TopicMacroeconomic objectives and policy conflicts
Q31 mark
Which one of the following is usually associated with a negative output gap?
- ADemand-pull inflation and decreasing unemployment
- BCost-push inflation and high employment rates
- CReal GDP growth less than the long-term productive potential
- DReal GDP growth more than the long-term productive potential
Show the answer
The answer is C.
TopicMacroeconomic objectives and policy conflicts
Q41 mark
Ceteris paribus, which one of the following is likely to result from this situation? Rate of Rate of unemployment inflation
- AFalling Rising
- BFalling Falling
- CRising Rising
- DRising Falling
Show the answer
The answer is D.
TopicMacroeconomic objectives and policy conflicts
Q51 mark
Which one of the following can be deduced from the chart?
- AThere was a current account surplus in Q2 2013
- BThe current account surplus fell by HK$20 billion between Q4 2009 and Q2 2010
- CThe current account was in a deficit in Q2 2014
- DThere was a balanced government budget in Q2 2015
Show the answer
The answer is C.
Q61 mark
Which one of the following is the percentage change in the unemployment rate for Greece between January 2017 and October 2017?
- A-2.2
- B-9.52
- C-10.53
- D-10.7
Show the answer
The answer is B.
TopicMeasures of economic performance
Section B
Q7Explain4 marks
Explain one likely economic effect of this increase in the base interest rate.
Mark splitKnowledge 1Application 1Analysis 2
TopicFiscal, monetary and supply-side policy
Q8Explain4 marks
Explain one possible impact on the level of unemployment of this net migration.
Mark splitKnowledge 1Application 1Analysis 2
TopicMacroeconomic objectives and policy conflicts
Q9Draw4 marks
Draw a short-run AS and AD diagram to show the effect of the increase in the price of oil on the price level and real output for France.
Mark splitKnowledge 1Application 3
TopicAggregate demand
Q10Explain4 marks
With reference to the overall trend of the data, explain what is meant by 'the savings ratio'.
Mark splitKnowledge 2Application 2
TopicNational income, the circular flow and the multiplier
Q11Calculate4 marks
Ceteris paribus, calculate the final increase in the national income resulting from the LE11.9 billion investment.
Mark splitKnowledge 1Application 3
TopicAggregate demand
Section C
Case study
The Romanian economy
Extracts: Figure 1: Year-on-year real GDP growth by quarter, 2016-2017 · Figure 2: The rate of inflation, as measured by the consumer price index, 2016-2017 · Extract A: Romania's economic growth · Extract B: Inflationary pressures · Figure 1: and 2 based on data taken from Tradingeconomics.com · Extract A: adapted from https://www.theguardian.com/world/2017/oct/14/romania-economy-booming
In the extracts: Q1 Q2 Q3 Q4, Hong Kong, Mugur Isarescu, Romanian Government's, South Korea, GDP, European, Romania's, VAT, Bucharest
Q12(a)Define2 marks
Define the term 'fiscal policy' (Extract A, line 6).
Mark splitKnowledge 2
TopicMeasures of economic performance
Q12(b)Explain4 marks
With reference to Figure 1, explain the term 'real GDP growth'.
Mark splitKnowledge 2Application 2
TopicMeasures of economic performance
Q12(c)Analyse6 marks
With reference to Extract A, analyse one macroeconomic effect of the reduction in indirect tax.
Mark splitKnowledge 2Application 2Analysis 2
TopicMeasures of economic performance
Q12(d)Examine8 marks
With reference to the information provided, examine the likely impact of increased investment on Romania's economy.
Mark splitKnowledge 2Application 2Analysis 2Evaluation 2
TopicMeasures of economic performance
Q12(e)Discuss14 marks
Discuss the likely effects of the increase in the rate of inflation on Romania's economy.
TopicMeasures of economic performance
Section D
Q13OptionalEvaluate20 marks
Evaluate the view that conflicts between macroeconomic objectives are inevitable.
Mark splitEvaluation 8
TopicMacroeconomic objectives and policy conflicts
Q14OptionalEvaluate20 marks
Evaluate the view that rising consumer expenditure will always benefit an economy.
Mark splitEvaluation 8
TopicEconomic growth
