CAPE Economics Unit 2 · 2012 · Paper 2

31 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.

1. 1(a)4 marksExplain the difference between 'Gross Domestic Product (GDP)' and 'Gross National Product (GNP)'.
2. 1(b)(i)3 marksDefine the income approach for measuring GDP, and outline how it is used.
3. 1(b)(ii)3 marksDefine the expenditure approach for measuring GDP, and outline how it is used.
4. 1(c)6 marksDiscuss TWO ways in which growth in a country's GDP may negatively impact the country's standard of living.
5. 1(d)(i)4 marksDistinguish between 'marginal propensity to consume' (MPC) and the 'average propensity to consume' (APC) and state how EACH is calculated.
6. 1(d)(ii)5 marksUsing the simple Keynesian consumption theory, explain the effect of a rise in income on the MPC and APC.
7. 2(a)6 marksUsing the classical economic model, explain why disequilibrium employment exists.
8. 2(b)10 marksAnalyse, using aggregate demand and supply curves, how a global recession may impact the aggregate demand and output of the economy of your country.
9. 2(c)9 marksIdentify THREE non-price determinants of aggregate supply and explain how EACH determinant influences the level of aggregate supply.
10. 3(a)(i)4 marksDistinguish between 'unemployment' and 'underemployment'.
11. 3(a)(ii)8 marksOutline FOUR types of unemployment.
12. 3(b)(i)6 marksWith the use of examples, describe TWO types of inflation.
13. 3(b)(ii)4 marksDifferentiate between 'nominal interest rate' and 'real interest rate'.
14. 3(c)3 marksExplain how expansionary monetary policy may be used, instead of fiscal policy, to increase employment in the economy.
15. 4(a)(i)2 marksDefine 'Fiscal policy'.
16. 4(a)(ii)2 marksDefine 'Budget surplus'.
17. 4(a)(iii)2 marksDefine 'Transfer payments'.
18. 4(b)(i)3 marksOutline THREE limitations of Monetary policy.
19. 4(b)(ii)3 marksOutline THREE limitations of Fiscal policy.
20. 4(c)4 marksIdentify FOUR sources from which governments can borrow large sums of money to finance their expenditure.
21. 4(d)9 marksEvaluate THREE possible negative consequences of government borrowing.
22. 5(a)3 marksExplain what is meant by the term 'economic integration'.
23. 5(b)12 marksOutline THREE benefits and THREE costs associated with economic integration.
24. 5(c)6 marksOutline the THREE major stages of economic integration that CARICOM countries have attempted to achieve over the past 30 years.
25. 5(d)4 marksEvaluate the extent to which CARICOM countries have achieved economic integration.
26. 6(a)(i)2 marksExplain the difference between a 'current account transaction' and a 'capital account transaction' in the balance of payments statement.
27. 6(a)(ii)a)3 marksUsing the data in the table, calculate the current account balance.
28. 6(a)(ii)b)2 marksUsing the data in the table, calculate the overall balance of payments.
29. 6(b)8 marksOutline FOUR ways in which a global recession may impact the main accounts of the balance of payments.
30. 6(c)4 marksDistinguish between 'absolute advantage' and 'comparative advantage'.
31. 6(d)6 marksDiscuss TWO policy options that a country may use to correct a trade deficit.