DP Economics Questionbank

Explain the reason for your answer to part (d) (i).

Define the term investment indicated in bold in the text (paragraph [2]).

Define the term consumption indicated in bold in the text (paragraph [3]).

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

Using the data in Table 3, calculate the level of investment.

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.

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]).

Using an AD/AS diagram, explain the likely impact on the Canadian economy of the increase in the official interest rate (paragraph [1]).

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 why the “decrease in the prices of imports, especially oil” might reduce inflationary pressure (paragraph [5]).

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 AD/AS diagram, explain how the change in the balance of trade in goods and services from 2018 to 2019 could have affected South Korea’s economy (Table 1 and paragraph [1]).

Sketch an AD/AS diagram to illustrate the possible effect on the Burundian economy in the long run if the government reduces the rate of corporate income tax from 30 % to 26 %.

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

Using an AD/AS diagram, explain how an increase in oil prices “could worsen inflationary pressures” (paragraph [4]).

Using an AD/AS diagram, explain how removing “the import quota will reduce the inflation rate in the Philippines” (paragraph [5]).

Explain how a deflationary gap might occur.

Define the term recession indicated in bold in the text (paragraph [1]).

Examine why, in contrast to the monetarist/new classical model, the economy will not automatically return to the full employment level of output in the Keynesian model.

Explain the potential effects on the economic growth rate from a substantial increase in the number of skilled people of working age entering a country.

Discuss the view that economies will always return to the full employment level of output in the long run.

Using an externalities diagram, explain why the construction of dams on the Mekong River might lead to market failure (paragraph [2]).

Examine why, in contrast to the monetarist/new classical model, the economy will not automatically return to the full employment level of output in the Keynesian model.

Using the monetarist/new classical model and the Keynesian model, discuss the view that increases in aggregate demand will inevitably be inflationary.

Discuss the view that economies will always return to the full employment level of output in the long run.