Economics Paper 2 - 3. mark questions Flashcards
In 2017 the US government wanted to introduce a 300% tariff on imported aircraft made by Canadian manufacturer Bombardier.
(g) Explain one way the World Trade Organisation could promote free trade between countries such as Canada and the US.
Award 1 mark for identifying a relevant way.
Award 1 mark for developing the way.
Award 1 mark for the response being in context.
- One way is by the WTO hosting discussions/trade
negotiations (1) in which countries such as the US
and Canada agree to reductions in tariffs/quotas (1)
which should result in greater free trade between
countries (1) - One way is by the WTO having a set of rules (1)
These aim to ensure that countries do not introduce
tariffs/quotas such as the 300% tariff on aircraft (1)
which would restrict free trade between countries (1)
In October 2017 the currency of the Philippines, the peso, fell to its lowest level against the US dollar in more than 11 years.
(e) Explain one advantage of having a depreciating currency for an economy such as the Philippines.
Award 1 mark for identifying a relevant advantage of having a
depreciating currency.
Award 1 mark for developing the advantage.
Award 1 mark for the response being in context.
* An improvement on the current account (1) A
weaker value of the peso leads to rising export
sales (1) resulting in a larger trade surplus for the
economy of the Philippines (1)
* Economic growth for the economy of the
Philippines (1) The price of exports should fall
because of the weaker peso (1) This may result in
an increase in demand for goods/services (1)
According to the UN there are now over 63,000 multinational corporations (MNCs) and the number is growing daily. Many well-known MNCs, including PepsiCo, the Tata Group and Microsoft, are expanding in India.
(f) Explain one possible reason for the emergence of MNCs in a country such as India.
Award 1 mark for identifying a possible reason.
Award 1 mark for developing the possible reason.
Award 1 mark for the response being in context.
* To access customers in different regions (1) Demand
may have become saturated in the domestic market
of the MNC (1) A growing economy such as India
provides a much bigger market in which to sell their
goods/services (1)
* Cheaper resources such as labour (1) Countries
such as India have cheaper skilled labour compared
to the domestic market of the MNC (1) This allows
the MNC to produce products at a much lower cost
(1)
Explain one method of government intervention that could be used to protect the environment.
Award 1 mark for identifying a method of government
intervention.
Award 1 mark for developing the method.
Award 1 mark for the response being in context.
* Use of taxation (1) A tax on polluting goods such as
cars increases the cost to the consumer (1) There
should be a reduction in car use and less pollution
created (1)
* Use of subsidies (1) The government could subsidise
the manufacture of solar panels (1) This encourages
consumers to switch to renewable energy reducing
pollution from fossil fuels (1)
In September 2017, the growth rate of the gross domestic product (GDP) in the UK was 0.4%, a slight increase of 0.1% on the previous quarter.
(g) Explain one reason why economic growth is a key macroeconomic objective for a country such as the UK.
Award 1 mark for identifying a reason
Award 1 mark for developing the reason
Award 1 mark for the reason being in context
* One reason is because economic growth can
improve living standards for the population (1).
Growth of 0.4% leads to people having higher levels
of income (1). This can lift people out of poverty in
the UK (1)
* One reason is because economic growth can result
in higher levels of tax revenue for a government (1).
This is due to higher levels of income within the
economy (1) resulting in more revenue for public
sector services in the UK such as
education/healthcare (1)
In December 2017 the Thai baht appreciated to its highest value in 2 years against the US dollar. The Thai baht is predicted to continue its gradual appreciation in 2018.
(e) Explain one disadvantage of an appreciating currency for an economy such as Thailand.
Award 1 mark for identifying a relevant disadvantage of an
appreciating currency
Award 1 mark for developing the disadvantage
Award 1 mark for the disadvantage being in context
* A deterioration of the current account (1). A stronger
value of the Thai baht leads to falling export sales (1)
resulting in a larger trade deficit for Thailand’s
economy (1)
* Reduced economic growth for the economy of
Thailand (1) The price of exports should rise
because of the stronger baht (1) This may result in
a decrease in demand for goods/services (1)
President Xi Jinping of China has made environmental protection a priority. This is due to rising public concern over widespread environmental damage caused by years of uncontrolled economic growth.
(f) Explain one possible negative effect on the environment caused by the economic growth of a country such as China.
Award 1 mark for identifying a possible negative effect
Award 1 mark for developing the possible negative effect
Award 1 mark for the effect being in context
* Pollution from business activity (1). Many firms create air
and noise pollution from making goods (1) which can
negatively affect local communities near to factories in
China (1)
* More waste from production and consumption of goods
and services (1). Waste must be disposed of in landfill
sites (1). This can cause a health hazard to Chinese
residents near to areas of waste disposal (1)
Explain one way a government could reduce inequality and poverty.
Award 1 mark for identifying a way
Award 1 mark for developing the way
Award 1 mark for the response being in context
* Through progressive taxation (1), higher income
earners pay a larger proportion of their income in
tax (1). The government can redistribute this to
lower income earners in the country reducing
inequality and poverty (1)
* Through government investment in education (1),
human capital can be improved (1). This may result
in a person being able to get a job in the future
reducing inequality and poverty (1)
