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Section A

One or two of your chosen questions must be from this section

1. Sales of organic food hit a record $43 million last year, up 8.4% from the previous year,
according to the Organic Trade Association, based in Washington DC. Interest in organic
products is booming not only due to a more conscientious consumer, but also thanks to rising
incomes in a strong economy and improved farming practices that make organic yields more
robust.
Source: USA Today
Discuss the likely impacts of the above scenario on organic food and its related markets. [25]

2. In economic theory, a merger or sale to a rival allows for cost-cutting, reduced competition
and negotiation of better terms with suppliers.
(a) Explain the benefits of mergers and acquisitions. [10]
(b) Discuss the view that these benefits cannot be achieved fully in reality. [15]

3. The government of Britain is expected to announce a ban on new diesel and petrol cars
from 2040 as part of efforts to tackle air pollution. Campaigners have also demanded the
government to include government-funded and mandated clean air zones, with charges for
the most polluting vehicles to enter areas with high air pollution.
Source: The Independent
(a) Explain why governments intervene in markets where there are negative externalities and
imperfect information are present. [10]
(b) Discuss the effectiveness of the measures proposed by the British government and
campaigners in curbing the above market failure in the preamble . [15]
Section B
One or two of your chosen questions must be from this section

4. The figure below shows the macroeconomic indicators of Singapore as of 2016.

Discuss whether the Singapore government should be concerned about the above scenario.
[25]
5. Indias central bank lowered interest rates to 6.75%, more than expected than the original
7.25%, in an attempt to bolster the economy as Chinas slowdown threatens global growth.
Source: The Straits Times, September 19, 2015
Discuss the view that managing interest rates is the best way for any country to boost
economic growth in light of weakening global demand. [25]

6. US is considering the imposition of sanctions against Venezuela that could restrict the
imports of crude oil from Venezuela, the third largest source of imports behind Canada and
Saudi Arabia respectively. Many experts have voiced their objections, stating that this move
would add about 15 to 25 cents a gallon to U.S gasoline prices, resulting in devastating effects
on the US refining sector.
Source: Various
(a) Explain the possible factors that US may have considered in deciding whether to impose
sanctions against Venezuela. [10]
(b) Discuss the view that protectionism always increases the standard of living of a countrys
citizens. [15]