Uploaded by Sandeep Haldar

Economics MayJune 2022 V2 - Corrected

advertisement
Economics may/june 2022 Paper 22
Section A:
a) 2600m
Put the Dollar Sign here, answer is correct
b) Life expectancy, GDP per head
c) Aggregate demand= C+I+G+(X-M), government spending
increases (G) so aggregate demand also increases Incomplete point
d) People may prefer working in the tertiary sector due to many
reasons. To begin with, working conditions are much better than
that of the primary sector, so it will be healthier for workers.
Also, income is likely to be higher in the tertiary sector, so
people will prefer working there Too short, for such questions which do not require detailed
explanation, write at least 1 point for each mark
e) Investing in education will allow more students to have a
better degree, so they’ll be able to get a better job, and therefore
increase productivity. Capital goods are basically machinery, so
they will be able to work 24/7 without a break, so they may be
able to produce more in a shorter period of time
Investment in capital goods explanation is not properly written, it lacks proper chain of analysis and key words. Key words
missing in the Investment in Education part as well.
f) The expected relationship between GDP per head and net
migration should be direct, meaning that as GDP per head is
higher, net migration should also be higher. The countries
following this expectation are: New Zealand, Slovenia, Cyprus
and Bhutan, while the countries that are not within expectation
are: Kenya and Mozambique, this is because Kenya has a higher
GDP per head but less net migration. Use a little more data from the question to lengthen
your answer. Points are correct but answer is too
short for a 5 mark question.
g) On one hand, if people’s living quality has improved, it likely
how? not a developed point.
means that enterprise has increased, so incomes increases, so
living standards increase. Also, if firms’ profits have increased
in the future,
this means that enterprise has also increased. On
points are answered directly without building cause and effect relationship
the other hand, if the living quality of people did not improve,
then enterprise has most likely not increased due to incomes not
increasing. Also, if the firms’ profits did not increase, it is most
likely that enterprise has not increased too.
Vey basic points, it is also a repition. Try using different types of points. The points were not developed at all.
Check Marking Scheme for ideas about how to develop the points.
h) On one hand, a cut in income tax rates will increase
disposable income, so spending increases, and the people may
spend on luxury goods, so living standard increases. Also, when
spending increases, people may be able to get out of poverty, so
their living standards increase. On the other hand, if spending
increases, aggregate demand increases, and if it keeps
increasing, it may cause demand-pull infation, so costs may
skyrocket, and many people wont be able to buy necessity
goods, so living standards decrease.
It is just the reverse of the merit point. Consider points such as not beneficial to all people, may increase pollution,
decrease in government tax revenue and therefore less government spending, etc.
Section B:
Qs 2:
a) Paper money, Cheques, Coins, Digital Money
but how does it help the government? try completing your points by giving a
logical chain of analysis
b) A central bank issues money to the government in terms of
notes and coins. It also controls the monetary policy, which it is not just setting
interest rates
means that it sets interest rates. Also, it is the lender of last
resort to commerial banks as well as the government.
focus only on the government
c) Most governments have low unemployment as their main aim
due to various reasons. To begin with, lower unemployment
means that the labour force is stronger, so productivity
increases. Additionally, when productivity increases, GDP per
head increases, so living standards also increase. Lastly, if there
isnt low unemployment, crime rates will increase due to people
needing money, so living standards decrease.
Also consider a few other points such as increase in aggregate demand, increase in
government revenue. And complete the point with a cause and effect chain.
d) On one hand, inflaton may be healthy to the market if it’s a
small percentage, eg. 2% or 3%. This is because a small
point
percentage wont harm consumers, but will benefit producers assame
repeated, there
are so many
2% from many consumers will cause their profit margin to
other important
Please
increase. Additionally, inflation means higher prices, so more points.
check Markign
Scheme
profit for the producers. On the other hand, if there is
superinflation, consumers will stop buying due to the high
prices, so producers will suffer a huge loss and may have to shut
down. Lastly, inflation will increase the prices of raw materials,
so costs will increase, and profits decrease.
Your answer lacks thought and depth. It only highlights the point of view of profit. Try thinking from international,
government, environement as well as consumer perspective.
Qs 3:
a) A curve which represents the maximum output of a country, it
also shows opportunity cost. mention possible combination of two goods, mention given
resources and technology
b) Price inelastic means that % change in qty demanded is less
than that of price. Soap is a neccessity good, so no matter the
price, people have to buy it, whereas perfume is a luxury good,
so if its price increases, people may stop buying it.
Another point needed, consider postponement of consumption, number of substitutes, proportion of income spent,
etc
c)
of what ?
An increase in incomes will allow people to spend more, so
demand increases. When demand increases prices increase.
This type of an explanation will not give you 2 marks. You have to give another reason, for example, demand
increases as purchasing power increases, etc
d)
Qs 5:
a) The willingness and ability to produce goods over a period of
time and at a given price.
b) Merit goods are goods that are more beneficial to us than we
realize. Governments may increase the consumption of merit
goods in many ways. Firstly, they could advertise these goods
and talk about how beneficial they are for us. They could also
decrease their prices which will encourage more people to try
them out.
how? Write that government can provide subsidies on production or government can
introduce price ceiling
c) As GDP decreases, GDP per head decreases, so instead of
households spending a high proportion on luxury goods, most of
the disposable income will be spent of neccessity goods and
very less on luxury goods. Furthermore, a reduction in income
will cause households to save less due to most of the money
being spent already. Lastly, a reduction in income may cause a
person to look for more jobs, so spending pattern may not
change at all.
You could also consider other points instead of the last point.
d) On one hand, an increase in output means more revenue is
being received, so profits increase. When profits increase, firms
may spend the extra money on capital goods and R&D to
increase their productivity. Also, an increase in profits will
allow firms to increase workers’ incomes, so they will be
motivated to produce even more. On the other hand, if output
write diseconomies of scale
increases, costs may also be increasing, and the firm may start
suffering losses, and may start to release some workers, which
will also decrease their productivity. Lastly, an increase in
output may cause a firm to experience diseconomies of scale, eg.
Poor communication due to the firm expanding.
Download