Вы находитесь на странице: 1из 7

# TEST CODE 02216020

## CARIBBEAN EXAMINATIONS COUNCIL

ECONOMICS

UNIT 2 -Paper 02
2 hours 30 minutes

## 2. There are TWO questions in each section. Candidates MUST answer

THREE questions, ONE from EACH section'

provided.

## 5. You may use a silent, non-programmable calculator to answer questions.

I
I
DoNoTTURNTHISPAGEUNTILYoUARETOLDToDoSo.
-
- Copyright A 20l4 Caribbean Examinations Council
-
I
All rishts reserved.
-
I

- 022l6020lcAPE 2015
a

SECTION I
MODULE 1: MODELS OF THE MACROECONOMY

## 1. (a) (i) Define the term'gross domestic product (GDP)'. [2 marks]

(ii) Explain why certain final goods and services are NOT included in the measurement
of GDP. [3 marksl

(iii) Explain why economists use 'real GDP' rather than 'nominal GDP' to gauge
economic wellbeing. [3 marksl

TABLE I

## Year Nominal GDP Real Potential GDP GDP Deflator

(millions) (2005 dollars) (base year = 2005)

9 269 7 730 I 13
20r3

## 2014 9 873 l0 145 ll8

place'
N.B. For this question, round all numerical answers to one decimal

## (i) in20l3 and}}l4,respectively' 14 marksl

Calculate real GDP

2013 and
(ii) calculate the growth (in percentage terms) of nominal GDP between
2014- [2 marksl

2013 and
(iii) calculate the growth (in percentage terms) of the real GDP between
2014. [2 marksl

'the growth of
(iv) Explain the difference between 'the growth of nominal GDP'and
real GDP'. [3 marks]

## and in 2014, respectively'

(v) calculate the output gap (in percentage terms) in2013
[4 marksl

## (vi) State whether the output gap was recessionary or

inflationary in 2013 and 2014'
resPectivetY

Total25 marks

## GO ON TO THE NEXT PAGE

02216020/CAPE 2015
-3 -

) (a) (i) Identify the most important determinant of consumer spending and personal saving.
[1 markl

## (iii) Describe the relationship between MPC and MPS' [2 marks]

(b) Use the following information to answer Parts (i) and (ii)'

## where C: personal consumPtion

Y: personal income

T: income taxes

(i) Calculate

## the 'investment curve'.

(c) Distinguish between the 'investment demand curve'and
[4 marksl

## the change in investment if

(d) (i) Using the accelerator model of investment, calculate
falls by \$500 million'
firms desire to hotd 25%o of output as inventory and output
[3 marksl

## to hold inventories rise to 307o'

(i i) Calculate the change in investment if firms'desire
constant' [2 marksl
with all etse remaining
Total25 marks

## GO ON TO THE NEXT PAGE

022t6020lcAPE 2015
-4-

SECTION II
MODULE 2: MACROECONOMIC PROBLEMS AND POLICIES

## 3. (a) (i) Define EACH of the following terms: {"

x"
a) National budget deficit [2 marks]

b) Nationaldebt [2 marksl

## (ii) State FOUR causes of national debt. [4 marks]

(b) (i) Exptain why the size of national debt is commonly expressed as a ratio to GDP'
[3 marksl

## (ii) Evaluate the statement "public debt is a burden on future generations".

[4 marks]

economy over a
(c) Table 2 shows government spending and tax revenue for a hypothetical
four-year period. All figures are in millions'

TABLE 2

Spending

## the budget balance

(i) copy Table 2 into your answer booklet and complete it to show
indicating whethei it is a deficit, surplus or neither' [8 marksl
1
ll

## (ii) Calculate the public debt in this economy over the

four-year period' [2 marksl !
ri

Total25 marks

## GO ON TO THE NEXT PAGE

02216020/CAPE 2015
-\-

## 4. (a) (i) Define the term 'fiscat policy'. [2 marks]

(ii) Explain, using TWO examples, the term 'automatic stabilizers'. [5 marksl

## (iii) Distinguish between 'discretionary fiscal policy' and 'non-discretionary fiscal

policy'. [4 marks]

## (c) (i) Define the term 'stagflation'. [2 marks]

(ii) With the use of a labelled Phitlips curve, explain how the use offiscal and monetary
policies to solve probtems of inflation and unemployment can further compound
ihe problems. 14 marksl

Total25 marks

I
t

## GO ON TO THE NEXT PAGE

022160201cAP8 2015
-6-

SECTION III
MODULE .' DsEvE LOPMENT
"lRr:ib.""fJfrtJl1?1E

Table 3 shows data on income and population differences among groups of countries
for
J. (a)
2013. Use this information to answer the following questions.

TABLE 3

Income Groups
by GDP per caPita
(2013)

(\$l 3sl-\$s 390)

## Upper-Middle 3 674 000

(\$s 3el-\$16 7lo)

36 594 000

45 774 000

marks]
decimal place. [4

## in income amongst all groups

(ii) List FoUR factors which could explain the inequality
in the table.
[4 marks]

## countries fall and

(iii) Identify the income group in wh.ich the majority of GARICOM
countries which might justify
state TWo .r.u.iu."i peculiarities or CantCOM
them being in that grouP.
[3 marks]

## that might result from

(iv) Outline THREE implications for CARICOM economies
the strucrur"ip"""iil.ities identified in (a)
(iii) above. [6 marksl

## (b) Discuss oNE benefit of economic growth and oNE cost

of economic growth.
[8 marksl

Total25 marks

## GO ON TO THE NEXT PAGE

0221602010APE 2015
-
- t-

6. (a) (i) Identify THREE factors which may affect the levels of imports and exports of a
countrY. [3 marks]

[3 marks]

Total25 marks

END OF TEST

## WORK ON THIS TEST'

IFYOU FINISH BEFORE TIME IS CALLED, CIIECK YOUR

022160201cAP8 20ls

## Нижнее меню

### Получите наши бесплатные приложения

Авторское право © 2021 Scribd Inc.