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Question: consumer spending increases A firms buy fewer machines B people hold more cash C savers earn lower rewards D What is not a supply-side policy measure? Answer: B

Question: control of trade union power A higher indirect taxation B privatisation C skills training for workers D The table shows the real GDP per head for a country in 2021 and 2022. Answer: B

Question: 2022 2021 $21000 $20000 What is most likely to have changed between 2021 and 2022? Incomes were distributed more evenly. A There was more activity in the informal economy. B The living standards of some people improved. C The rate of inflation increased. D Which change to fiscal policy is most likely to reduce cyclical unemployment in an economy? Answer: C

Question: increasing direct taxation A increasing the budget deficit B increasing the budget surplus C increasing the money supply D What must have happened in a country when it experienced an annual rate of inflation of 100%? Answer: B

Question: The money supply doubled. A The price level halved. B The purchasing power of money halved. C The real value of money doubled. D The Human Development Index (HDI) can be used to measure human development in countries. Which measure would not be part of its calculation? Answer: C

Question: inequality of incomes A life expectancy B gross national income per head C years of schooling D What is the most likely consequence of an ageing population for a high-income economy? Answer: A

Question: There will be a fall in the dependency ratio. A There will be a fall in the level of immigration. B There will be an increase in geographic mobility. C There will be an increase in spending on healthcare. D In some developing countries a large percentage of the population is involved in subsistence farming. What can be concluded from this? Answer: D

Question: Each family will be able to produce enough to live on. A Production is unlikely to be capital intensive. B Production will be efficient. C There will be a high level of trade. D A small country whose only export is oil decides to reduce substantially the rate at which it extracts its limited oil reserves. What is the most likely reason for this decision? Answer: B

Question: to improve the balance of payments in the following year A to increase current government income B to maintain future living standards C to raise the level of employment in the oil industry D Country X believes that country Y is selling steel at prices below the average cost of production. So, country X imposes a higher tariff on steel imports from country Y. What does country X hope to achieve by imposing this higher tariff? Answer: C

Question: avoid country X dumping steel in country Y A avoid country Y dumping steel in country X B reduce inflation in country X C reduce inflation in country Y D Which factor would cause a country’s exchange rate to fall? Answer: B

Question: Demand for imports increases. A Domestic interest rates rise. B Domestic savings increase. C More tourists visit the country. D Many European firms employ workers from the Philippines. These workers send part of their income to relatives in the Philippines. In which part of the balance of payments current account for the Philippines would these transactions be recorded? Answer: A

Question: primary income A secondary income B trade in goods C trade in services D BLANK PAGE BLANK PAGE Answer: B

Question: excess demand A free goods B market failure C the economic problem D The diagram shows a production possibility curve (PPC) for a country. The country moved from position X to position Y on the PPC. Answer: D

Question: O capital goods consumer goods X Y What is the most likely reason for this change? Firms have decided to increase investment in technology. A New economic resources have been discovered in the country. B The government has brought about an increase in living standards. C The government has encouraged long-term economic growth. D Which type of factor of production is a railway track? Answer: C

Question: capital A enterprise B labour C land D Which statement must be correct if a market is in disequilibrium? Answer: A

Question: Quantity demanded and quantity supplied are equal. A The government must intervene if anything is to be sold. B There can be no changes to demand or supply. C There is excess supply or excess demand. D What is a determinant of price elasticity of demand (PED)? Answer: D

Question: availability of stocks of the product A change in the income of consumers B degree of necessity of the product C existence of monopoly D What would cause the supply curve for an agricultural product to shift to the right? Answer: C

Question: an increase in the costs of production A an increase in the price of substitutes B an increase in the price of the good C an increase in the productivity of farms D What would increase the price elasticity of supply (PES) of a product? Answer: D

Question: an increase in the cost of inputs A an increase in the firm’s profits B an increase in the number of close substitutes C an increase in the time a product can be stored D The diagram shows a demand curve. Answer: D

Question: O D X Y P2 Q2 Q1 P1 price quantity What does the movement from X to Y show? a decrease in quantity demanded due to an increase in price A a decrease in quantity demanded due to changes in the conditions of demand B an increase in quantity demanded due to changes in the conditions of demand C an increase in quantity demanded due to an increase in price D In a market there is a surplus of a good. Which change would cause the market to come to an equilibrium? Answer: A

Question: a decrease in demand A a fall in price B a rise in price C an increase in supply D When the price of a good is $10, the quantity demanded is 100 units per day. Which combination of price change and price elasticity of demand will cause the largest increase in the quantity demanded for the good? Answer: B

Question: price elasticity of demand price change 0.8 price falls to $9 A 1.2 price falls to $9 B 0.8 price rises to $11 C 1.2 price rises to $11 D A function of money is to act as a measure of value. What does this mean? Answer: B

Question: It is used for future savings. A It is used to compare the worth of different goods. B It is used to enable monthly payments for expensive goods. C It is used to pay the price of a good. D In 2008–2009 the central bank of a developed country reduced interest rates from 5% to 0.5% per year to stimulate the economy. How would this policy have affected the amount saved and the cost of borrowing by individuals? Answer: B

Question: cost of borrowing amount saved decreased decreased A increased decreased B decreased increased C increased increased D Many small energy providers have closed down due to rising costs. What is the likely effect of this on the price of energy and choice of energy providers for consumers, assuming there is no government intervention? Answer: A

Question: choice of energy providers price of energy decreases decreases A increases decreases B decreases increases C increases increases D What is the most likely goal of a state-owned enterprise providing health services? Answer: C

Question: profits A public satisfaction B sales revenue C survival D Some governments allow monopoly markets to exist. What is a reason for this? Answer: B

Question: to attract entry into the market A to fund research and development B to increase prices for consumers C to maximise monopoly profits D The table shows the costs incurred by a firm producing computers. Answer: B

Question: total costs ($ thousands) output (thousands) 20 1200 1350 1450 0 1 2 3 What are the fixed costs if 3000 computers are produced? $4020000 D $1450000 C $1430000 B $20000 A A government increases its revenue by higher direct taxation of both personal incomes and company profits. What is most likely to be the reason for this increase? Answer: A

Question: to control spending on specific consumer goods A to encourage business investment B to provide public and merit goods C to reduce pollution from industrial production D Income tax in a country gives all individuals an initial tax-free income allowance. Any income above this allowance is taxed at increasing rates as the incomes of individuals rise. Which change to this income tax will be regressive? Answer: C

Question: decreasing the lowest rate of tax A decreasing the tax-free income allowance B increasing the tax-free income allowance C increasing the top rate of tax D A government lowers the rate of interest. Who is most likely to be disadvantaged by this policy? Answer: B

Question: house buyers A manufacturers B retailers C savers D What is a supply-side policy measure? Answer: D

Question: a tariff on imported goods A an increase in indirect taxes B a contractionary monetary policy C the removal of barriers to entry to a market D What is the most likely consequence of economic growth? Answer: D

Question: more equal income distribution A more use of resources B reduced imports C reduced tax revenue D In high-income economies, cereal farming is highly productive but few workers are employed. What could have caused this employment situation? Answer: B

Question: a fall in world demand for cereals A a lack of capital equipment B increased mechanisation of agriculture C large-scale migration from rural areas D Who is most likely to benefit during a period of inflation? Answer: C

Question: creditors (lenders) A debtors (borrowers) B fixed income earners C holders of cash D The table shows some economic indicators. Which increase in the first indicator is most likely to lead to an increase in the second indicator? Answer: B

Question: second indicator first indicator consumer saving budget surplus A unemployment consumer spending B trade surplus inflation C living standards productivity D Which combination would be most likely to increase the population of a country? Answer: D

Question: net immigration death rates birth rates positive high high A positive low high B negative high low C negative low low D Which economic consequence is most likely to result from an increasing proportion of the population being over the age of 65? Answer: B

Question: Government transfer payments will increase. A More facilities will be needed to retrain workers. B The total savings in the economy will increase. C There will be a rise in the economic growth rate. D What is most likely to encourage international specialisation? Answer: A

Question: similarities in climate in different countries A the ability to produce products more cheaply than other countries B the discovery of oil in a country that had no oil before C very high international transport costs D Country X established free trade agreements with other nations. What would be the intended benefit of such agreements to country X? Answer: B

Question: increased labour shortages A increased tariff revenue B more efficient allocation of resources C protection from low wage competition D A country’s foreign exchange rate appreciates significantly. Which group in the country will directly benefit from this change? Answer: C

Question: a government department which only buys locally made goods A retailers who get all their supplies from foreign producers B workers in local companies that compete with foreign firms in the local market C workers in local companies that sell only in foreign countries D What is measured in the secondary income balance in a country’s current account of the balance of payments? Answer: B

Question: net contributions to international and regional organisations A net exports of goods and services B net foreign investment flows C net inflow of income from factors of production abroad D BLANK PAGE Answer: A