DP Economics Questionbank

Using Figure 5, state two likely causes for the change in Mexico’s spending on imports of goods and services in 2009.

Using an AD/AS diagram, explain how the peso’s weakness is “raising inflation” (paragraph [6]).

Explain how aggregate demand is likely to be affected by an increase in the wealth of consumers and an increase in business confidence.

Using an AD/AS diagram, explain how “increasing China’s interest rate” could affect its economic growth (paragraph [5]).

Using an exchange rate diagram, explain why a deficit in the current account may result in downward pressure on the Kenyan shilling (Kenya’s currency) (paragraph 5).

Explain how aggregate demand might be affected by an increase in interest rates.

Explain what effect a reduction in interest rates might have on consumption and investment.

Using an AD/AS diagram, explain how “good economic growth rates in neighbouring countries like Uganda” benefit Kenya’s economy (paragraph 5).

Explain the possible impact of an increase in wealth and consumer confidence on aggregate demand.

Calculate the total welfare loss resulting from the imposition of the tariff on chia seeds.

Using an AD/AS diagram, explain why the “decrease in the prices of imports, especially oil” might reduce inflationary pressure (paragraph [5]).

Explain how aggregate demand in an economy might be affected by a rise in the exchange rate and a decrease in the income of major trading partners.

Explain how increased investment by the government in education and training can affect both aggregate demand and aggregate supply.

Using an AD/AS diagram, explain the impact of the trade agreement between Japan and the EU (JEEPA) on Japan’s economic growth (paragraph [1]).