DP Economics Questionbank

Using a production possibilities curve (PPC) diagram, explain why choices have to be made in all economies.

Discuss the view that governments should not intervene in housing markets.

Examine the consequences of the lack of a pricing mechanism for common access resources.

Discuss whether there should always be direct provision of public goods by the government.

Define the term monopoly power.

Using the figures provided in Table 1, calculate the monthly level of profits Firm A is making at the current level of output, Q’.

Using the relationship P = AR > MR > AC > MC and/or figures provided in Table 1:

State the reason Firm A cannot be a perfect competitor.

Using the relationship P = AR > MR > AC > MC and/or figures provided in Table 1:

Determine whether Firm A should increase or decrease its level of output in order to maximize profits. You must give a reason for your choice.

Using the relationship P = AR > MR > AC > MC and/or figures provided in Table 1:

Determine whether total revenue collected will increase, decrease or remain unchanged if Firm A increases its level of output. You must give a reason for your choice.

Using the relationship P = AR > MR > AC > MC and/or figures provided in Table 1:

Describe how average cost will be affected if Firm A increases its level of output.

Using the relationship P = AR > MR > AC > MC and/or figures provided in Table 1:

Determine whether Firm A is productively efficient at the current level of output. You must give a reason for your choice.

Using the relationship P = AR > MR > AC > MC and/or figures provided in Table 1:

Explain why allocative efficiency is achieved, in the absence of externalities, at a level of output where price (average revenue) is equal to marginal cost.

On the following axes, sketch a fully labelled diagram showing the level of output Q’ for which the relationship
P = AR > MR > AC > MC is true. The use of figures provided in Table 1 is not required.

Now assume that the market in which Firm A operates has evolved into an oligopoly with only two firms, Firm A and Firm B. Each firm can cut price or maintain the current price. The following payoff matrix shows the profits they face. The profit payoffs for Firm A are in bold.

Using the profit figures in the payoff matrix, explain why strategic interdependence will lead both firms to cut price.

Assuming that there are no restrictions on the importing of bananas into Country A:

State the quantity of bananas which will be purchased each month in Country A.

Assuming that there are no restrictions on the importing of bananas into Country A:

Calculate the monthly expenditure on bananas imported into Country A.

Assuming that there are no restrictions on the importing of bananas into Country A:

Calculate the domestic producer surplus.

Outline the reason why a fall in the price of the dollar should lead to an increase in the quantity of dollars demanded.

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

Define the term variable costs indicated in bold in the text (paragraph [7]).

Using a supply and demand diagram with international trade values from the text, explain the statement that “The US imported 1200 million pounds (lb) of shrimp last year and produced 100 million pounds (lb) of shrimp domestically” (paragraph [2]) (Does not need to be to scale).

Using an average costs diagram, explain the short-run consequence for shrimp farmers if the price received “is not enough to cover their variable costs” (paragraph [7]).

Using a demand and supply diagram, explain why “the double effect of slowing growth in China and higher levels of production in Australia has driven the price of iron ore lower” (paragraph 1).

Using a demand and supply diagram, explain the effect on the price and quantity of fuel consumed in Angola, caused by the elimination of domestic fuel subsidies (paragraph 4).

Using a definition of the term opportunity cost and information from the text, explain how the servicing of debt has an opportunity cost that may affect economic development in Sri Lanka.

Using a definition of price elasticity of demand, explain why “the revenues received by the nation’s biggest exporters continue to fall” (paragraph 5).

Using a demand and supply diagram, explain the impact on the market for fuel of the government’s decision to reduce fuel subsidies (paragraph 2).

Define the term marginal cost indicated in bold in the text (paragraph 4).

Define the term increasing returns to scale.

Using the data in Table 1 to support your answer, identify how changes in inputs may result in constant returns to scale and in decreasing returns to scale.

Determine:

• economic profit if output is equal to 2 units and average cost is equal to $130 per unit.

Calculate the marginal revenue resulting from a fall in price from $8 to $6.

Calculate the price elasticity of demand when price falls from $10 to $8.

Explain why a profit-maximizing monopolist would never choose to operate on the inelastic portion of its demand curve.

State two characteristics of monopolistic competition.

Calculate Firm B’s short-run profit/loss at the profit-maximizing level of output.

Using the diagram, explain how long-run equilibrium will be reached.

With reference to the diagram, outline whether allocative efficiency will be achieved in the long run in a monopolistically competitive market.

Calculate the social surplus at the equilibrium market price.

The government in Alpha imposes a price ceiling of $5 per kilogram.

Calculate the change in the consumer surplus after the imposition of the price ceiling.

The government in Alpha imposes a price ceiling of $5 per kilogram.

Calculate the welfare loss after the imposition of the price ceiling.

Evaluate the consequences of rising incomes on service sector producers (such as hotels) and primary sector producers (such as rice farmers).

Explain why the consumption of merit goods, such as healthy food, can lead to positive externalities of consumption.

Discuss whether advertising by the government is the most appropriate way of increasing consumption of a merit good.

Explain why an increase in incomes over time may lead to an increase in demand for some goods but a decrease in demand for other goods.

The income elasticity of demand for primary commodities tends to be relatively low, while the income elasticity of demand for manufactured goods and services tends to be higher. Examine the likely effects of this for individual producers and for the economy as a whole.

Explain why demerit goods are an example of market failure.

Evaluate the effectiveness of using indirect taxation to correct market failure.

Explain how the overuse of common access resources can lead to negative externalities.

Discuss the view that the best way to reduce the threat to sustainability, arising from the burning of fossil fuels, is for the government to provide subsidies to firms that produce energy through renewable sources.

Explain why a loss-making firm in perfect competition would shut down in the long run.

Discuss the view that perfect competition is a more desirable market structure than monopoly.

Explain how an increase in the costs of factors of production would affect the market price and output of a good.

Discuss the consequences for different stakeholders in the economy of the government providing subsidies on goods, such as renewable energy.

Explain how the value of the cross price elasticity of demand (XED) for a particular good is determined by its relationship to other goods.

Examine the significance of both cross price elasticity of demand and income elasticity of demand for a firm.

Discuss the view that competitive markets will always achieve allocative efficiency.

A government decides to impose an indirect tax on unhealthy drinks. Discuss the consequences for the stakeholders in these markets.

Explain two factors that might give rise to economies of scale for a firm.

Discuss the view that legislation is the best way of dealing with the problem of monopoly power.

Examine the significance of price elasticity of demand for the decision making of firms and government.

Explain two reasons why a government might want to subsidize a good or service.

Discuss the view that governments should tax the consumption of gasoline (petroleum).

Explain why some firms might choose the goal of profit maximization while others might choose to adopt satisficing behaviour.

Discuss whether price will always be lower and output will always be higher in perfect competition compared to monopoly.

Calculate the equilibrium price and quantity per month.

Calculate the excess demand/excess supply (state which of these) at a price of $8.50.

Calculate the price at which excess demand of 18 widgets would result.

Widgets and Pidgets have negative cross price elasticity of demand (XED).
Explain how the demand function for Widgets, Qd = 249 − 4P, is likely to change as a result of an increase in the price of Pidgets.

Explain two determinants of the price elasticity of demand (PED).

State the value of the price elasticity of supply (PES) for tickets to the 2018 Football World Cup final.

Draw and label the marginal revenue (MR) curve for the 2018 Football World Cup final.

Using the diagram and your answers to parts (j) and (k), explain how the organizers could achieve their goal of profit maximisation.

To what extent is advertising the most effective way of increasing the consumption of merit goods?

Discuss whether an oligopolistic firm should collude rather than compete.

Using a demand and supply diagram, explain the effect of government subsidies on the US corn market (paragraph [5]).

Define the term total revenue indicated in bold in the text (paragraph [6]).

Using an externalities diagram, explain how the widespread use of solar panels will decrease the negative externalities of consumption caused by the use of kerosene lamps (paragraph [5]).

Using a theory of the firm diagram, explain the output and pricing decision of M-Kopa if it chooses to pursue the goal of revenue maximization (paragraph [6]).

Calculate Firm A’s average fixed costs when it is producing 125 cartons of coffee per month.

Calculate Firm A’s average variable costs when it is producing 125 cartons of coffee per month.

Using Figure 2, calculate the average fixed costs when 80 cans per month are produced.

Using Figure 2, calculate the total costs when 55 cans per month are produced.

Using this information, draw and label the average revenue curve on Figure 2.

(ii) Using Figure 2, identify the quantity of cans per month Firm B must produce in order to maximize profits.

(iii) Calculate the economic profit when Firm B is producing at the output level identified in part (ii).

Firm B conducted a market survey and found out that the price elasticity of demand for its brand of tea is 0.8 among urban customers, whereas it is 1.2 among customers in rural areas. The sales director said “This information could help Firm B to raise its revenue, by trying to separate the two markets, provided that certain conditions are satisfied”. Explain this statement.

Define the term social (community) surplus.

Calculate the social (community) surplus in the market for cotton in San Marcus.

Draw and label the new supply curve following the granting of the subsidy to domestic cotton producers on Figure 3.

Calculate the cost to the government of San Marcus of providing this subsidy to domestic cotton producers.

Calculate the resulting change in producer surplus following the introduction of the subsidy to cotton producers in San Marcus.

Calculate the change in the consumer surplus resulting from the subsidy.

Examine the view that the best allocation of resources, from society’s point of view, occurs where the marginal private benefit equals the marginal private cost.

Explain why a government might decide to impose a price ceiling on goods and services such as essential foods or rented housing.

Explain the relationship between the law of diminishing returns and a firm’s short-run cost curves.

Evaluate the view that monopoly is an undesirable market structure as it fails to achieve productive and allocative efficiency.

Explain why price elasticity of demand varies along the length of a straight-line demand curve.

Examine the significance of price elasticity of demand for the decision-making of firms and governments. 

Discuss the view that the provision of subsidies by the government on goods such as agricultural products will always be beneficial to stakeholders.

Discuss the view that imposing an indirect tax on gasoline (petrol) is the most effective way of reducing the market failure caused by cars.

Using an appropriate externalities diagram, explain why a government might decide to impose a price floor on a demerit good.

Examine the role of barriers to entry in making monopoly a less desirable market structure than perfect competition.

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

Define the term variable costs indicated in bold in the text (paragraph [4]).

Using an externalities diagram, explain how the Chinese infrastructure projects have caused negative externalities (paragraph [6]).

Identify the slope of the supply curve.

Draw and label the new supply curve on Figure 1.

Using your answer to part (c), outline the reason why an increase in costs of production has resulted in a new supply function.

Calculate the change in producer surplus resulting from the increase in costs of production.

The time taken to produce goods is an important determinant of the price elasticity of supply.

Apart from time, explain two factors which influence the price elasticity of supply.

Draw and label the marginal revenue (MR) curve for the concert on Figure 3.

Calculate the maximum revenue that could be earned from selling tickets for the concert.

Calculate the average fixed cost per ticket if all tickets are sold.

Assuming the event organizers aim to maximize profit, calculate the profit that will be made from the concert.

Calculate the change in expenditure on imported oranges as a result of the increase in demand.

Calculate the change in consumer surplus in Country Z as a result of the increase in demand for oranges.

Calculate the change in social (community) surplus as a result of the increase in demand for oranges.

Draw and label a curve that illustrates Fairland’s minimum wage on Figure 6.

Calculate the resulting unemployment among the low-wage workers.

Evaluate the importance of cross price elasticity of demand for a business selling a good if the price of a related good increases.

Discuss the implications of the direct provision of public goods by a government.

Discuss the significance of price elasticity of demand (PED) for a government imposing an indirect tax on a good.

Explain how two types of economies of scale can lead to a fall in long-run average costs.

Discuss the view that barriers to entry in a monopoly will always lead to abnormal profits in the long run.

Define the term sustainability indicated in bold in the text (paragraph [6]).

Using an externalities diagram, explain why the percentage of infants receiving measles vaccinations in Nigeria indicates the existence of a market failure (Table 1).

Using a demand and supply diagram, explain how the cut in fuel subsidies may have had “severe consequences for low-income households” (paragraph [7]).

Using a demand and supply diagram, explain why the increase in the minimum wage might affect Cambodia’s garment manufacturing competitiveness against other countries in the region (paragraph [4]).

Using an externalities diagram, explain why the garment industry is a source of market failure (paragraph [8]).

State two characteristics of a perfectly competitive market.

Using a fully labelled diagram, outline the relationship between marginal product (MP) and average product (AP) of labour.

Determine the slope of the market supply function for the corn farmers in Nissos.

Calculate the monthly equilibrium quantity of corn in Nissos.

Draw and label the marginal revenue (MR) curve for corn for an individual farmer in Nissos on the grid below.

Using Figure 1, calculate the consumer surplus in Nissos at the market equilibrium.

Explain one possible advantage and one possible disadvantage of governments setting a price floor in agricultural markets.

Draw and label on Figure 1 a curve that illustrates the price floor in Nissos that leads to a monthly surplus of 3 million kg of corn.

State one measure that the government of Nissos might take to deal with this corn surplus, following the imposition of the price floor.

Using Figure 1, determine the size of the decrease in monthly corn consumption following the imposition of the price floor.

Using Figure 1, calculate the change in consumer expenditure on corn in Nissos.

Plot and label the new supply curve on Figure 2.

Using information from Figure 1, calculate Firm A’s total fixed costs.

The market price of almonds is $11 per kilogram. Using Figure 1, identify the quantity of almonds Firm A must produce in order to maximize profits.

Calculate the economic profit/loss when Firm A is producing at the output level identified in part (b)(i).

Based on the information in Figure 2, state whether the firms in this market are making normal profits, economic profits or economic losses.

On Figure 2, draw and label appropriate additional curves to show how a perfectly competitive market will move from short-run equilibrium to long-run equilibrium.

Using your answer to part (c)(ii), explain how the market adjustment takes place.

State two assumed characteristics of a monopoly.

Explain two reasons why a monopoly may be considered desirable for an economy.

Using Figure 3, calculate the economic profit when Firm B is maximizing its profits.

Using Figure 3, calculate the total revenue when Firm B is maximizing its revenue.

Sketch and label a diagram to illustrate the long-run equilibrium for a firm in monopolistic competition.

Discuss whether government regulation is the most effective way to deal with negative externalities of consumption.

Explain the impact of a price floor on market outcomes.

Discuss the consequences for different stakeholders when the government imposes a price ceiling on a market.

Explain how knowledge of price elasticity of demand could be used by a firm that is considering changing the price of its product.

Discuss how the introduction of a subsidy in a market will affect consumers, producers and the government.

Explain how a natural monopoly may arise.

Discuss how governments restrict monopoly power.

Using an externalities diagram, explain how “greater access to education” for girls in Pakistan could reduce market failure (paragraph [5]).

Define the term economies of scale indicated in bold in the text (paragraph [3]).

Using an externalities diagram, explain why “business pollution” is leading to market failure in STP (paragraph [5]).

Define the term asymmetric information indicated in bold in the text (paragraph [6]).

Using a costs diagram, explain how the expansion of the coconut industry could lead to economies of scale (paragraph [4]).

Evaluate the view that the threat to sustainability, caused by economic activity requiring the use of fossil fuels, is best addressed through the use of carbon taxes.

Explain two reasons why a government might impose indirect taxes.

Discuss the view that price floors are more effective than subsidies in providing assistance to producers in the agricultural sector.

Explain why governments impose price floors in the market for agricultural products.

Evaluate the effectiveness of government regulations in achieving a reduction in the consumption of demerit goods.

Explain why a monopolistically competitive firm can make economic (abnormal) profit in the short run, but not in the long run.

Discuss the consequences of a perfectly competitive market becoming a monopoly market.

Explain why the price elasticity of demand for primary commodities is often relatively low while the price elasticity of demand for manufactured goods is often relatively high.

Discuss the importance of price elasticity of demand and cross price elasticity of demand for a firm’s decision making.

Discuss the view that tradable permits are more effective than taxes in reducing pollution.

Explain why governments provide subsidies.

Evaluate the effectiveness of price floors in achieving a reduction in the consumption of demerit goods.

Explain the reasons for the shape of the long-run average total cost curve.

Discuss the view that governments should always try to prevent the creation of barriers to entry in a market.

Using a demand and supply diagram, explain the impact on households of “removing some subsidies on food” (paragraph [5]).

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

Using a perfect competition diagram, explain whether farmers in the Philippines are making an economic profit or loss (Table 1).

Using an externalities diagram, explain the benefits of hygiene and sanitation education programmes (paragraph [5]).

Using a perfectly competitive firm diagram, explain the effect of declining prices of coffee beans on the profits of Honduras’ coffee farmers in the short run (paragraph [2]).

Assuming that 25 000 pencils are produced initially, identify the opportunity cost for Country H if the production of rice is to be increased by 100 %.

Table 1 provides information about Good X and Good Y, which are related goods.

Table 1

Using Table 1, calculate the cross price elasticity of demand between Good X and Good Y when the price of Good X increases.

Country D is an economically less developed country that specializes in the production of primary products. 

Explain two implications for Country D of a relatively low income elasticity of demand for its primary products.

Good A and Good B are in joint supply.

Using a diagram to support your answer, explain the impact on the market for Good B of an increase in the price of Good A.

Calculate the shortage resulting from the imposition of the maximum price.

Calculate the change in producer surplus resulting from the imposition of the maximum price.

Calculate the change in consumer expenditure on rice resulting from the imposition of the maximum price.

State two methods of non-price rationing.

State two government responses to the abuse of monopoly power.

Sketch the marginal product (MP) and average product (AP) curves for this firm.

Sketch the total product (TP) curve for this firm.

Sketch the marginal revenue (MR) curve for firms in the widget industry.

Sketch the total revenue (TR) curve for firms in the widget industry.

Calculate the firm’s total variable costs if output is 20 000 widgets per month.

Identify the level of output at which the firm would achieve productive efficiency.

Calculate the firm’s monthly total fixed costs if output equals 50 000 units per month.

State two conditions necessary for price discrimination to take place.

Using a diagram (or diagrams), explain why a profit maximizing firm might charge a higher price in one market than in another.

Discuss the view that the best way to achieve greater equity in the distribution of income in a country is to use a progressive tax system.

Evaluate the effectiveness of fiscal policy as a tool to reduce unemployment.

Discuss the view that the most significant impact of high inflation in a country is a loss of export competitiveness.

Fernando earns $35 000 in 2015. Calculate his average rate of tax.

Maki, who earns $70 000 in 2015, pays an average rate of tax of 27.14 %. Using the figures provided in Table 1, outline why her average tax rate is higher than that of Fernando.

Outline one potential advantage and one potential disadvantage of a progressive tax system.

Fernando receives a pay rise in 2016. His total income rises to $43 000. Calculate the percentage of his additional income which must be paid as tax.

Country Z implements a 10 % sales tax in 2016. Explain why an indirect tax is unlikely to be used as a mechanism to promote equity.

Calculate the percentage of income received by the highest 20 % in Country X. Enter your answer in Table 2.

Outline why Country X has a higher Gini coefficient, using the data in Table 2.

On the following axes, plot the Lorenz curve for Country Y.

Outline why the Gini coefficient must have a value between 0 and 1 (or between 0 and 100).

Country X raises the level of transfer payments. Explain two reasons why this policy could help to break the poverty cycle.

Define the term monetary policy indicated in bold in the text (paragraph [6]).

Using an AD/AS diagram, explain how “monetary policy tightening” may affect a country’s inflation rate (paragraph [6]).

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

With reference to the figures on the marginal propensity to consume (paragraph [5]), explain how the value of the multiplier in China would compare with the value of the multiplier in a more developed-market economy (no calculation required).

Define the term economic growth indicated in bold in the text (paragraph 2).

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).

Define the term infrastructure indicated in bold in the text (paragraph 3).

Angola and Namibia have different Gini coefficient values. Using a Lorenz curve diagram, explain what this means (Figure 1).

Define the term privatization indicated in bold in the text (paragraph 2).

Using a production possibilities curve (PPC) diagram, explain how “billions of US dollars worth of infrastructure investment from China” may affect potential economic output (paragraph 1).

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

Define the term gross national income indicated in bold in the text (paragraph 3).

Define the term infrastructure indicated in bold in the text (paragraph 1).

Using a production possibilities curve (PPC) diagram, explain how “the government’s record US$22 billion investment in infrastructure projects” will affect Indonesia’s production possibilities (paragraph 2).

Distinguish between inflation and disinflation.

Calculate the inflation rate for 2013 and for 2015 for Country A. Enter your results in Table 1.

The consumer price index (CPI) is a weighted price index. Outline one reason why weights are used in the construction of the CPI.

Outline how a producer price index may prove useful in predicting future inflation.

Explain two reasons why governments attempt to avoid deflation.

Using the data in Figure 1, comment on the degree of income inequality in the United States (US), Sweden and Brazil.

Using your answer to part (f), sketch and label a Lorenz curve for Brazil and for Sweden in the following box.

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

Discuss whether the use of fiscal policy is the most effective way to bring an economy out of a recession.

Explain the factors that cause demand-pull and cost-push inflation.

Discuss the view that deflation will always be bad for an economy.

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

Evaluate the effectiveness of using monetary policy to reduce the rate of inflation.

Explain the causes of economic growth in terms of an increase in actual output and an increase in potential output.

Discuss the view that the consequences of economic growth are always beneficial.

Explain the impact that a fall in the world price of oil might have on aggregate supply and gross domestic product (GDP) in an economy.

Explain why a high rate of inflation may negatively affect both a country’s export competitiveness and the level of capital investment by firms.

Discuss the view that the use of monetary policy is always the best way to reduce inflation.

Discuss whether an increase in interest rates is the most effective way of reducing the rate of inflation in an economy.

Explain the cause of cyclical (demand-deficient) unemployment.

Discuss the view that the most significant consequence of unemployment is the loss of tax revenue for the government.

Evaluate the view that the best way to reduce income inequality in a country is by using progressive taxation.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

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

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 how an increase in investment might lead to economic growth.

Discuss the possible consequences of economic growth on living standards, unemployment and inflation.

Explain how expansionary fiscal policy could be used to close a deflationary (recessionary) gap.

Evaluate government policies to deal with the different types of unemployment.

Using Table 1, calculate the unemployment rate.

Using the graph, determine short-run values for the unemployment rate in 2016 and the inflation rate in 2018. Enter your answers in Table 2 below.

Table 2

The government in Country Alpha reduces income taxes in 2019.
Using information from the graph to support your answer, explain the likely effect on the inflation rate and the unemployment rate.

The natural rate of unemployment in Country Alpha is 5 %.

On the diagram draw and label the long-run Phillips curve (LRPC).

The price of oil is expected to rise significantly, causing a sustained increase in energy costs.

Describe the likely effect of this sustained cost increase on the short-run Phillips curve (SRPC).

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

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

The following diagram illustrates the long-run aggregate supply curve (LRAS), short-run aggregate supply curve (SRAS) and aggregate demand curve (AD) for Country Beta before the increase in investment.

The increase in investment results in both short-run and long-run effects on the economy. On the diagram above, draw and label the two curves that illustrate these effects.

In Country Beta, investment by firms increases in the first quarter of 2019.

The following diagram illustrates the long-run aggregate supply curve (LRAS), short-run aggregate supply curve (SRAS) and aggregate demand curve (AD) for Country Beta before the increase in investment.

The increase in investment results in both short-run and long-run effects on the economy. On the diagram above, draw and label the two curves that illustrate these effects.

Calculate the real growth rate in 2018 using the figures in Table 4 below.

Table 4

Calculate the maximum possible increase in gross domestic product (GDP) that could result from the rise in investment.

Country Delta is an open economy with a government sector. Investment rises by $2 billion in both Delta and Beta. Explain how the size of the multiplier and the resulting effect on gross domestic product (GDP) might be different in the two countries.

To what extent is the use of national income statistics an effective way of comparing the standard of living between countries?

Using the concept of the multiplier, explain how an increase in investment might affect aggregate demand.

Discuss the effectiveness of supply-side policies in reducing unemployment.

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, apart from indicating economic growth rates over time, national income statistics are of little use.

Define the term monetary policy indicated in bold in the text (paragraph [5]).

Using a production possibilities curve (PPC) diagram, explain the effect on economic growth of the “destruction of much of the country’s physical, social and human capital” (paragraph [1]).

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

Calculate gross domestic product (GDP) for Country X in 2015.

Calculate gross national income (GNI) for Country X in 2015.

Calculate the rate of consumer price inflation in 2016.

Using the GDP deflator, calculate the percentage change in real GDP between 2014 and 2015.

Identify the term represented in Figure 4 by the letter V.

Identify the term represented in Figure 4 by the letter M.

State the four factor payments which constitute the income flow in the circular flow of income model.

Determine the size of the budget surplus/deficit and state which using Figure 4.

Calculate the average tax rate for an individual who earns $64 000 per year.

Draw and label the Lorenz curve diagram for Country A on Figure 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.

To what extent is expansionary fiscal policy the best policy to achieve a reduction in the rate of unemployment?

Explain the role of improved productivity in achieving economic growth.

Discuss the view that economic growth can only be achieved at the expense of other macroeconomic objectives such as a low and stable rate of inflation and equity in the distribution of income.

Explain how a deflationary gap might occur.

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

Explain how government spending might promote greater equity in an economy.

Evaluate the view that government policies to promote greater equity will always have a negative effect on efficiency.

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

Evaluate the view that inflationary pressures in an economy are best reduced using supply-side policies.

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

Explain how an increase in unemployment might lead to a loss of gross domestic product (GDP) and a budget deficit.

Discuss the view that there will always be a trade-off between the unemployment rate and the inflation rate.

Define the term structural unemployment indicated in bold in the text (paragraph [4]).

Define the term real gross domestic product (GDP) indicated in bold in the text (paragraph [2]).

Using a production possibilities curve (PPC) diagram, explain how rising numbers of university graduates will affect Bhutan’s potential output (paragraph [5]).

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

List two functions of the central bank (paragraph [2]).

Define the term fiscal policy indicated in bold in the text (paragraph [5]).

Explain the difference between a current account deficit and a budget deficit (paragraph [5]).

Define the term interest rates indicated in bold in the text (paragraph [5]).

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

Define the term productivity indicated in bold in the text (paragraph [5]).

Using an AD/AS diagram, explain how expansionary monetary policy might lead to economic growth (paragraph [1]).

Calculate the unemployment rate in Fairland using Table 1.

Outline two difficulties in measuring unemployment.

Fred is a low-wage worker in Fairland. As a result of the minimum wage his income will increase from $15 000 per year to $19 000 per year.

Calculate how much additional income tax Fred will need to pay.

Using an AD/AS diagram to support your answer, explain the mechanism through which monetary policy can help an economy reduce the level of unemployment.

State two interventionist supply-side policies that are likely to increase the demand for low-wage labour in Fairland.

State two market-based supply-side policies that are likely to increase the supply of labour in Fairland.

Using this information, calculate the value of the Keynesian multiplier.

Using your answer to part (i), calculate the increase in government spending necessary to increase nominal GDP by $100 billion.

Explain, using a production possibilities curve (PPC) diagram, an increase in the actual output of an economy.

Discuss the view that economic growth always leads to a rise in living standards.

Explain the impact that a cut in taxation and an increase in government spending might have on the circular flow of income.

Discuss whether the real gross national income (GNI) per capita of a country is a good indicator of its standard of living.

Explain the effect an increase in investment might have on real gross domestic product (GDP) using the Keynesian multiplier.

Discuss the view that interventionist supply-side policies are the most effective way for a government to achieve economic growth.

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]).

Outline two roles of a country’s central bank (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 an AD/AS diagram, explain how Turkey’s reliance on energy imports is putting “further pressure on inflation” (paragraph [4]).

State the reason for the difference between Ghana’s GNI per capita and its GDP per capita (Table 1).

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

Calculate the inflation rate for 2014 and for 2015. Enter your results in Table 1.

Calculate the unemployment rate for 2012 and for 2013. Enter your results in Table 1.

Explain two reasons why low and stable inflation is desirable.

Using the data in Table 1 to support your answer, identify two reasons why many economists would consider Country A’s economy to be performing poorly in 2012.

State one reason why monetary policy is considered to have limited effectiveness in increasing aggregate demand if an economy is in a deep recession.

Explain two reasons why fiscal policy may prove effective in lifting an economy out of a deep recession.

Using the information in Table 2 for Country B calculate nominal GDP in 2014. Enter your result in Table 2.

Using the information in Table 2 for Country B calculate nominal GNI in 2015. Enter your result in Table 2.

Using the information in Table 2 for Country B, determine real GDP in 2014 and in 2015. Enter your results in Table 2.

Using the information in Table 2 for Country B, calculate the rate of economic growth between 2014 and 2015.

Gardia is aiming to increase its economic growth rate. Explain two sources of economic growth for economically less developed countries.

Gardia’s investment (in plant and equipment) increased by 11 million gamma in the last month. In the same month, its government spending decreased by 8 million gamma. It has been estimated that the marginal propensity to consume (MPC) on domestic goods and services in Gardia is 0.75.

Calculate the maximum possible increase in real gross domestic product (GDP) in Gardia that could result from the changes in investment and government spending.

Calculate the cost of the typical basket in 2016.

The cost of the typical basket was $50 in 2017. Calculate the consumer price index (CPI) for 2017.

The consumer price index for 2014 was 101.23. Calculate the rate of inflation between 2014 and 2015 (the base year).

In 2019, nominal GDP was $102 874.55 million. Using data from Table 2, identify whether Country A experienced inflation or deflation or disinflation in 2019.

Using data from Table 2, state the reason why there is a difference between the real GDP growth rate and the real GDP per capita growth rate between 2015 and 2019.

An economist forecasts that the real GDP growth rate in 2020 will be 3.41 %. Using the data in Table 2, calculate the forecast for real GDP ($ million) in 2020.

Calculate the estimated value of the multiplier used by the economist.

Calculate the estimated value of the multiplier used by the economist.

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

Explain why there is a possible trade-off between the unemployment rate and the inflation rate in the short run.

Discuss the view that the redistribution of income is the most important impact that inflation has on an economy.

Explain why measuring unemployment in a country is difficult. 

Discuss whether the most important consequence of unemployment is a loss of income for individuals.

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

Using an AD/AS diagram, explain the desired impact of China’s “eased monetary policy” on its economic growth (paragraph [5]).

Define the term gross domestic product (GDP) indicated in bold in the text (paragraph [3]). 

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

Define the term human capital indicated in bold in the text (paragraph [5]).

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

Using a Lorenz curve diagram, explain the possible impact on the distribution of income in the Philippines when “the income tax for the highest income earners has been raised from 30 % to 35 %” (paragraph [4]).

Using an AD/AS diagram, explain the impact on the potential output of the Philippines of the government increasing its “spending on new airports, roads and bridges” (paragraph [4]).

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

Using an AD/AS diagram, explain how the use of fiscal policy could lower “the high rates of youth unemployment” in South Korea (paragraph [5]).

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

Using a production possibility curve (PPC) diagram, explain how damage to Fiji’s infrastructure has affected its production possibilities (paragraph [1]).

Explain how the size of the circular flow of income in an economy is likely to be affected by a decrease in the rate of interest.

Evaluate the effectiveness of fiscal policy as a means of achieving long-term economic growth.

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

Evaluate the effectiveness of monetary policy in reducing an economy’s rate of unemployment.

Explain two causes of demand-pull inflation.

Evaluate the effectiveness of interventionist supply-side policies in reducing demand-pull inflation.

Explain two causes of structural unemployment.

Discuss the consequences of different types of unemployment.

Explain why cyclical (demand-deficient) unemployment may occur in an economy.

Evaluate the effectiveness of interventionist supply-side policies in reducing the level of unemployment in an economy.

Explain how expansionary monetary policy could be used to close a deflationary (recessionary) gap.

Evaluate the effectiveness of monetary policy in reducing an economy’s rate of inflation.

Explain the causes of cost-push inflation.

Discuss the view that deflation is more harmful than inflation.

Explain how the Lorenz curve and the Gini coefficient are used to measure differences in income inequality between countries.

Discuss the view that taxation is the most effective means of achieving equity in the distribution of income.

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

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

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

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

Using a Lorenz curve diagram, explain the likely impact on income distribution of “plans to encourage investment in rural areas”  (paragraph [5]).

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

Using an AD/AS diagram, explain how the construction of the China–Laos railway will contribute to economic growth in Laos (paragraph [1]).

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

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

Define the term gross domestic product (GDP) per capita indicated in bold in the text (paragraph [1]).

Using a production possibilities curve (PPC) diagram, explain how the production possibilities (potential output) of the DRC might be affected if there were greater access to electricity (paragraph [4]).

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

Define the term investment indicated in bold in the text (paragraph [5]).

With reference to the data in Table 2, explain why the GNI per capita for Guatemala is lower than its GDP per capita.

State one reason why the production possibility curve (frontier) for Country H might shift outwards.

Calculate Averna’s nominal gross domestic product (GDP) in 2019.

Using your answer to part (a), calculate Averna’s real GDP per capita in 2019.

Explain two reasons why an increase in real GDP per capita may not lead to an improvement in living standards.

Table 3 provides information relating to the labour market in the country of Buranda.

Table 3

Calculate the unemployment rate in Buranda.

Identify a period in which Country Y experienced disinflation.

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

Identify the quantity of bananas which would be purchased in Country A per month following the imposition of the quota.

Calculate the change in revenue earned by domestic producers of bananas in Country A as a result of the quota.

With reference to the diagram, explain why the welfare loss from the imposition of the quota is likely to be greater than the welfare loss resulting from a tariff of $2 per kg.

Assume that the dollar/yen exchange rate is in equilibrium. Using the functions, calculate the cost, in dollars, of a motorbike which costs ¥552 640.

Using examples from Table 1, outline the difference between debit items and credit items in the balance of payments.

Calculate the current account balance from the data given in Table 1.

Explain two implications of a rising current account surplus.

Define the term depreciation indicated in bold in the text (paragraph [4]).

Using an exchange rate diagram, explain how the increase in the official interest rate to 3.5 % is likely to affect the value of the New Zealand dollar (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the possible economic consequences of an overvalued New Zealand dollar on the New Zealand economy.

Using an exchange rate diagram, explain how the large current account deficit may have affected the value of the Ghanaian cedi.

Using an AD/AS diagram, explain how the falling value of the Ghanaian cedi may have contributed to inflation.

Using information from the text/data and your knowledge of economics, discuss the view that the US should impose tariffs on the imported shrimp.

Define the term tariff indicated in bold in the text (paragraph 2).

Using an international trade diagram, explain the impact on the Kenyan government of implementing a tariff on steel imports.

Using information from the text/data and your knowledge of economics, evaluate the claim that trade protection measures will support economic growth in Kenya.

Define the term depreciation indicated in bold in the text (paragraph 1).

Define the term current account indicated in bold in the text (paragraph 1).

Using an exchange rate diagram, explain why “slowing growth in China” may have caused a depreciation of the Australian dollar (paragraph 1).

Using information from the text/data and your knowledge of economics, discuss the possible consequences for the Australian economy of the fall in the value of the Australian dollar.

Define the term customs union indicated in bold in the text (paragraph 6).

Define the term current account deficit indicated in bold in the text (paragraph 1).

Using a definition of the terms of trade, explain the terms of trade change in Australia from 2011 to 2015 (Figure 1).

Using information from the text/data and your knowledge of economics, discuss the possible effects of the fall in Australia’s terms of trade on the Australian economy.

Using an AD/AS diagram, explain how the falling value of the Zambian kwacha (Zambia’s currency) is “feeding into inflation” (paragraph 6).

A new government in Alpha decides to abolish the price ceiling. Instead, it opens the rice market to imports. The world supply of rice is perfectly elastic; any quantity can be bought for $3 per kilogram.

Using the diagram, calculate the import expenditures on rice.

Define the term comparative advantage.

Explain two limitations of the theory of comparative advantage.

Alpha’s government decides to impose a $2 tariff on each kilogram of imported rice. Using the diagram, calculate the government revenue that results from the imposition of the tariff.

Using the data in Table 1, calculate Alpha’s current account balance for 2016.

Outline how Alpha’s current account balance for 2016 is likely to affect the exchange rate of its currency.

State one way in which the government of Alpha might bring about a depreciation of its currency.

Following the depreciation, it is observed that the current account balance worsens initially, but improves after a certain period of time. Explain why this might be expected to happen.

Using the diagram, calculate the opportunity cost of producing one tonne of bananas in Country A.

Calculate the value of V (exports of services) for Urbania in 2017.

Using the information in Table 5, calculate the financial account balance.

Using your answer to part (g)(i), calculate the value of W (reserve assets) in Table 5.

Using your answer to part (g)(ii), describe how the level of reserve assets in Urbania changed by the end of 2017.

Explain how a depreciation of the Urbanian dollar ($) might result in a J-curve effect.

Define the term depreciation indicated in bold in the text (paragraph [6]).

Define the term current account indicated in bold in the text (paragraph [6]).

Using an exchange rate diagram, explain how “the need to import corn” will affect the value of the South African rand (paragraph [3]).

Using information from the text/data and your knowledge of economics, evaluate the economic impacts of trade protection in the South African corn market.

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

Define the term comparative advantage indicated in bold in the text (paragraph [5]).

Explain why “deteriorating terms of trade have resulted in a worsening of the current account” in South Sudan (paragraph [4]).

Using a cost diagram, explain how membership in the common market may allow producers in South Sudan to gain economies of scale (paragraph [6]).

Using information from the text/data and your knowledge of economics, evaluate the likely impact on South Sudan of its membership of the EAC common market. 

State two functions of the WTO.

Plot and label the world cotton supply curve that San Marcus now faces on Figure 3.

With reference to your answer to question (b)(ii), calculate the change in the cost of financing the $8 per kg subsidy to the government of San Marcus following the decision to import cotton from the world market.

Using a supply and demand diagram and data from the text, explain how a “disequilibrium in the domestic US tinplate steel market” would occur if there were no imports (paragraph [3]).

Using an international trade diagram, explain the effect of a tariff on the imports of tinplate steel (paragraph [1]).

Using information from the text/data and your knowledge of economics, discuss possible economic impacts of the tariff on tinplate steel.

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

Using a tariff diagram, explain the effect of the “preliminary tariffs” on Canadian consumers of drywall (paragraph [3]).

Using a demand and supply diagram, explain how the “imposition of the preliminary tariff” may have affected the market for new homes built in Canada (paragraph [4]).

Using information from the text/data and your knowledge of economics, evaluate the effect of the tariff on drywall on different stakeholders.

Using an exchange rate diagram, explain how the central bank might depreciate the value of the rupee (paragraph [3]).

Explain the difference between a current account deficit and a budget deficit (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the effects of the increasing current account deficit on Pakistan’s economy.

Sketch and label a diagram to illustrate comparative advantage between Country X and Country Y on Figure 4.

Figure 4

Outline the reason why Country X should specialize in the production of apples and Country Y should specialize in the production of bananas.

State one administrative barrier that Country Z could use in order to restrict imports.

Explain two possible economic consequences for the eurozone if the euro appreciates.

Calculate the quantity of EU€ she will receive for her US$300 000.

Calculate, in US$, the loss made by Tanya as a result of these transactions.

Explain two reasons why a government might prefer a floating exchange rate system for its currency.

Define the term quota indicated in bold in the text (paragraph [4]).

Using an international trade diagram, explain the likely impact of Japan “removing the current 30 % tariff” on the level of cheddar cheese imports. (paragraph [4]).

Using information from the text/data and your knowledge of economics, evaluate the possible consequences of the trade agreement between Japan and the EU (JEEPA).

Define the term current account deficit indicated in bold in the text (paragraph [4]).

Using an exchange rate diagram, explain one reason for the appreciation of the Canadian dollar (paragraph [3]).

Using information from the text/data and your knowledge of economics, discuss the possible effects on the Canadian economy of the strengthening of the Canadian dollar against the US dollar.

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

Using an exchange rate diagram, explain what is likely to have happened to the Turkish lira when Turkish citizens “bought US$1 billion worth of foreign currency” (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the implications of Turkey’s persistent current account deficit.

If a visitor to Gardia from the US buys a towel that costs 23 gamma, calculate the cost in US$.

State two factors that could cause Gardia’s current account to be in deficit, even though its balance of trade in goods is in surplus.

Determine the size of Gardia’s current account surplus/deficit when the sum of the financial and capital accounts is US$ 2 billion.

Calculate the additional cost of paying back the loan in gamma in 2019, due to the interest and the change in the exchange rate.

Calculate the equilibrium exchange rate for the US$ in terms of the gamma.

Using Figure 2, calculate how many US$ are needed to buy one gamma at the new exchange rate.

State two reasons that could have caused an increase in the supply of US$.

Plot and label the production possibility curves for Country J and for Country H, assuming constant opportunity costs, on Figure 4.

Calculate the value of the Mexican peso (US$ per MX$) in 2015. Enter your result in Table 3.

Using Table 3, state one possible effect on Mexican consumers and one possible effect on Mexican producers from the change in the value of the Mexican peso (US$ per MX$) between 2014 and 2016.

Using information from Figure 5, sketch an exchange rate diagram to show how the change in Mexico’s spending on imports in 2010 would have affected its exchange rate (US$ per MX$), ceteris paribus.

Using Figure 6, identify the equilibrium price when Country B engages in free trade.

Using Figure 6, calculate the consumer surplus and the producer surplus when Country B engages in free trade.

Using Figure 7, identify the equilibrium quantity being consumed following the imposition of the tariff.

Using Figure 7, calculate the revenue received by the government as a result of the imposition of the tariff in Country B.

Using Figure 7, calculate the change in consumer surplus as a result of Country B imposing the tariff.

Using Figure 7, calculate the welfare loss as a result of Country B imposing the tariff.

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

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

Using an international trade diagram, explain the outcome on US producers of the introduction of a tariff on imports from China (paragraph [2]).

Using information from the text/data and your knowledge of economics, discuss the arguments for and against the trade protection measures imposed by the US on China.

Using an exchange rate diagram, explain how raising interest rates would “stop the fall in the peso’s value” (paragraph [4]).

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

State two functions of the World Trade Organization (WTO) (paragraph [1]).

List two components of the financial account (paragraph [4]).

Using an exchange rate diagram, explain how South Korea’s current account surplus could have “helped increase the South Korean won’s value” (paragraph [2]).

Using information from the text/data and your knowledge of economics, discuss the possible implications on South Korea’s economy of a current account surplus.

Define the term free trade area indicated in bold in the text (paragraph [1]).

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

Using price elasticity of demand (PED) data from the text and the J-curve effect, explain the most likely impact of “the falling value of the Australian dollar” on Australia’s current account (paragraph [4]).

Using an international trade diagram, explain how “increased quotas for the export of rice to Japan” will affect the price of rice in Japan (paragraph [2]).

Using information from the text/data and your knowledge of economics, evaluate the view that free trade is beneficial to Japan’s economy.

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

Define the term trade war indicated in bold in the text (paragraph [1])

Using an international trade diagram, explain how US tariffs could affect the export of Chinese steel and aluminium to the US (paragraph [2]).

Using a demand and supply diagram, explain how reduced tariffs on “imported factors of production” would affect the price of Chinese goods (paragraph [7]).

Using information from the text/data and your knowledge of economics, evaluate the impacts of free trade measures on China’s economy.

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

Define the term depreciation indicated in bold in the text (paragraph [4]).

Using an exchange rate diagram, explain how higher interest rates could “protect the rupee from further depreciation” (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the possible economic consequences on the Indian economy of a depreciating rupee.

State two functions of the World Trade Organization (WTO) (paragraph [1]).

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

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

Using information from the text/data and your knowledge of economics, evaluate the impact on the economy in the Philippines of removing the rice quota.

Define the term fixed exchange rate indicated in bold in the text (paragraph [1]).

Using an exchange rate diagram, explain why the “widening trade deficit in services” could lead to a depreciation of the renminbi (paragraph [3]).

Using information from the text/data and your knowledge of economics, discuss the view that a depreciating currency is good for the Chinese economy.

Calculate Buranda’s terms of trade index for 2008 and 2018.

Using your answers to part (g)(i), explain how the change in Buranda’s terms of trade may act as a barrier to economic development.

Define the term economic development indicated in bold in the text (paragraph [6]).

Using information from the text/data and your knowledge of economics, discuss possible consequences of International Monetary Fund (IMF) financial aid on Ghana’s economic growth and development.

Define the term market-oriented policies indicated in bold in the text (paragraph [1]).

Using information from the text/data and your knowledge of economics, compare and contrast factors that are likely to lead to economic development in Angola and Namibia.

List two characteristics of an economically less developed country.

Using information from the text/data and your knowledge of economics, discuss the possible effects of the proposed market-oriented reforms on Sri Lanka’s economic development.

Define the term micro-credit indicated in bold in the text (paragraph 5).

Using information from the text/data and your knowledge of economics, discuss the possible impacts of market-oriented and interventionist policies on Indonesia’s economic development.

Define the term foreign direct investment indicated in bold in the text (paragraph 3).

Using information from the text/data and your knowledge of economics, discuss the possible impacts of Zambia’s reliance on copper production on its economic development.

Define the term poverty trap (poverty cycle).

Explain two reasons for which a highly unequal income distribution may prove a barrier to economic development.

List two components of the Human Development Index (HDI) (paragraph [2]).

Using information from the text/data and your knowledge of economics, evaluate the challenges to economic growth and economic development faced by Burundi.

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

Using information from the text/data and your knowledge of economics, examine the extent to which access to credit and appropriate technology can contribute to economic development in Kenya.

Define the term concessional long-term loans indicated in bold in the text (paragraph [2]).

Explain two possible disadvantages for Bhutan in receiving India’s tied aid (paragraph [3]).

Using information from the text/data and your knowledge of economics, evaluate the government policies being used to promote economic development in Bhutan.

Define the term foreign direct investment (FDI) indicated in bold in the text (paragraph [4]).

Explain two reasons why Chinese companies may have been attracted into Peru (paragraph [4]).

Using a poverty cycle diagram, explain how increased foreign direct investment might break the cycle (paragraph [4]).

Using information from the text/data and your knowledge of economics, evaluate the factors that may allow Peru to continue to achieve high rates of economic growth in the future.

Describe the nature of foreign direct investment (paragraph [6]).

Using information from the text, explain two reasons why Chinese multinational corporations (MNCs) are investing in Bolivia.

Using information from the text/data and your knowledge of economics, discuss the possible effects of Chinese involvement on economic growth and development in the Bolivian economy. 

Explain the difference between economic growth and economic development (paragraph [7]).

Using information from the text/data and your knowledge of economics, discuss the extent to which continued economic growth may lead to economic development in Kenya.

State two functions of the International Monetary Fund (IMF) (paragraph [1]).

Using information from the text/data and your knowledge of economics, compare and contrast the level of economic development in Ghana and Nigeria.

Define the term diversification indicated in bold in the text (paragraph [5]).

Using information from the text/data and your knowledge of economics, evaluate export promotion as a strategy for achieving economic development in Cambodia.

The data in Table 2 suggest that Country B may have attracted significant foreign direct investment (FDI).

Outline one possible disadvantage of foreign direct investment (FDI) for economically less developed countries.

State two functions of the International Monetary Fund (IMF) (paragraph [2]).

Using a poverty cycle diagram, explain how the government of Pakistan could intervene to “break out of the poverty cycle” (paragraph [3]).

Using information from the text/data and your knowledge of economics, evaluate the potential impact of the IMF and the World Bank on economic development in Pakistan.

Using information from the text/data and your knowledge of economics, evaluate the use of export promotion as a means of achieving economic development in the Philippines.

Using information from the text/data and your knowledge of economics, discuss the role of aid in achieving economic development in STP.

Using information from the text/data and your knowledge of economics, discuss the view that government intervention is the best way to achieve economic development in Fiji.

Using information from the text/data and your knowledge of economics, evaluate the effectiveness of market-oriented policies in achieving economic development in Angola.

Define the term poverty trap indicated in bold in the text (paragraph [4]).

Using information from the text/data and your knowledge of economics, evaluate the role of foreign direct investment in promoting economic development in Laos.

List two components of the Human Development Index (HDI) (paragraph [1]).

Using information from the text/data and your knowledge of economics, evaluate the effectiveness of interventionist policies as a means of achieving economic development in the DRC.

Using information from the text/data and your knowledge of economics, contrast the potential for economic development in Guatemala and Honduras.