Quelpr

CAPE Economics Unit 2 · 2009 · Paper 2

52 questions and parts from this paper. Open one to see it in full, then practise it on Quelpr and get it marked against the mark scheme.

Practise this paper
  1. 1(a)(i)4 marksDefine inflation and state how it is measured.
  2. 1(a)(ii)4 marksDefine economic growth and state how it is measured.
  3. 1(a)(iii)4 marksDefine unemployment rate and state how it is measured.
  4. 1(a)(iv)4 marksDefine balance of payments and state how it is measured.
  5. 1(b)(i)a)4 marksExplain how Gross Domestic Product (GDP) is calculated using the expenditure approach.
  6. 1(b)(i)b)6 marksUse the expenditure approach to calculate the GDP for Country Y.
  7. 1(b)(ii)a)4 marksExplain how GDP is calculated using the income approach.
  8. 1(b)(ii)b)6 marksUse the income approach to calculate the GDP for Country Y.
  9. 1(c)(i)3 marksState ONE reason why an individual buying a used textbook will OR will NOT be included in the calculation of a country's GDP.
  10. 1(c)(ii)3 marksState ONE reason why a merchant selling United States currency on the black market will OR will NOT be included in the calculation of a country's GDP.
  11. 1(c)(iii)3 marksState ONE reason why a meat processing plant building a new factory will OR will NOT be included in the calculation of a country's GDP.
  12. 1(d)5 marksExplain why GDP per capita is NOT an adequate measure of the standard of living of a country.
  13. 2(a)(i)4 marksDistinguish between the Marginal Propensity to Consume (MPC) and the Average Propensity to Consume (APC).
  14. 2(a)(ii)4 marksState how the APC and the MPC are calculated.
  15. 2(b)8 marksUsing the simple Keynesian consumption theory, explain the effect of a rise in income on the MPC and the APC.
  16. 2(c)(i)2 marksDefine the term 'autonomous consumption'.
  17. 2(c)(ii)8 marksDraw a graph illustrating the concept of autonomous consumption and explain the Keynesian consumption function.
  18. 2(d)(i)8 marksState FOUR determinants of consumption, other than income.
  19. 2(d)(ii)16 marksExplain how EACH of the four determinants impacts on consumption.
  20. 3(a)(i)2 marksDefine M1.
  21. 3(a)(ii)2 marksDefine M2.
  22. 3(a)(iii)2 marksDefine monetary transmission mechanism.
  23. 3(a)(iv)2 marksDefine velocity of money.
  24. 3(a)(v)2 marksDefine currency substitution.
  25. 3(b)6 marksState THREE reasons for holding money.
  26. 3(c)16 marksIdentify FOUR tools of monetary policy and explain how Central Banks in the Caribbean region can use these tools to help control inflation.
  27. 3(d)8 marksUse the Keynesian liquidity preference framework to illustrate how monetary policies can impact on interest rates and the demand for money.
  28. 3(e)10 marksWith the use of examples, outline TWO reasons why Central Bank monetary policies to combat inflation may only achieve limited success.
  29. 4(a)(i)3 marksDefine balanced budget multiplier.
  30. 4(a)(ii)2 marksDefine fiscal policy.
  31. 4(a)(iii)2 marksDefine balanced budget.
  32. 4(a)(iv)2 marksDefine unbalanced budget.
  33. 4(b)5 marksExplain how an 'equal' or 'balanced' change in government spending and tax revenues may cause income to rise.
  34. 4(c)(i)5 marksDiscuss how government's borrowing to finance fiscal deficits can have a negative impact on domestic interest rates.
  35. 4(c)(ii)5 marksDiscuss how government's borrowing to finance fiscal deficits can have a negative impact on domestic investment.
  36. 4(c)(iii)5 marksDiscuss how government's borrowing to finance fiscal deficits can have a negative impact on inflation.
  37. 4(c)(iv)5 marksDiscuss how government's borrowing to finance fiscal deficits can have a negative impact on the value of the country's currency in relation to the United States dollar.
  38. 4(d)10 marksExplain, using a graph, the relationship between investment and the rate of interest. Show on the graph how expansionary fiscal policy can have a negative impact on the level of investment.
  39. 4(e)6 marksExplain what is meant by the 'national debt' of a country and state ONE reason why the national debt is a burden to a country.
  40. 5(a)(i)9 marksDescribe THREE determinants of economic growth.
  41. 5(a)(ii)3 marksExplain what is meant by 'economic development'.
  42. 5(a)(iii)3 marksExplain what is meant by 'human development index'.
  43. 5(a)(iv)9 marksDescribe THREE main indicators of 'human development index'.
  44. 5(b)15 marksUsing suitable examples, discuss THREE potential costs of economic growth.
  45. 5(c)10 marksDiscuss TWO impediments to economic growth faced by Caribbean economies.
  46. 6(a)(i)2 marksDefine tariffs.
  47. 6(a)(ii)2 marksDefine quotas.
  48. 6(a)(iii)2 marksDefine non-tariff barriers.
  49. 6(b)8 marksState FOUR factors that determine a country's export revenue.
  50. 6(c)10 marksDiscuss TWO types of exchange rates and for EACH type, name ONE Caribbean country that uses it.
  51. 6(d)16 marksDiscuss TWO major benefits of EACH type of exchange rate discussed in (c) above.
  52. 6(e)10 marksAnalyse ONE positive and ONE negative consequence of a devaluation of your country's currency.

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