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6th June 2018

Name : ___________________________________________

Answer all questions.

Using your knowledge of economics and with reference to the given figures in the Stimulus Material,
answer the following questions in the spaces provided.

Use Fig. 1 in answering the following questions.

1) In the table below, tick the two statements that are correct. (2)

Statement Tick (√)

The UK current account balance is in deficit
from 2006 – 2016
The UK current account balance is in surplus
from 2006 – 2016
The UK current account balance worsened
between 2008 and 2009
The UK current account balance improved
between 2008 and 2009

2) Describe the UK current account balance from 2006 – 2016. (2)

3) Explain the meaning of the term current account surplus. (2)

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Use Fig. 2 in answering the following questions.

4) Describe what happened to the value of the Pound sterling against the US dollar between
January 2006 and January 2017. (2)

5) Explain two factors that would cause the value of the Pound sterling to move in this direction
against the US dollar. (6)

Factor 1

Explanation

Factor 2

Explanation

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Use Figs. 1 and 2 in answering the following questions.

6) Analyse (diagram always helps) how the changes in the exchange rate of the Pound sterling to
the US dollar shown in Fig.2 could have contributed to the movement of the UK Current Account
Balance shown in Fig. 1. (6)

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Use Figs. 3, 4, and 5 in answering the following questions.

7) Compare Italy’s current account surplus with that of China. (2)

8) Complete the table below:

China US $ billions
Trade in goods 320.00
Trade in services -100.00
Income from investments -20.00
Income from transfers ?
Current Account Balance 293.20

Income from transfers = (2)

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9) Fig. 4 states that ‘there was a significant increase in protectionist measures introduced in 2015 –
2016’.

Using a diagram, and one example of a protectionist measure from Fig.5, discuss how the USA’s
current account balance would be affected if the US government decided to implement such a
measure. (8)

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10) Identify two disadvantages arising from countries implementing protectionist measures. (2)

Disadvantage 1

Disadvantage 2

11) Tick two statements that are true of free trade. (2)

Statement Tick (√)

All goods are traded for no cost
No tariffs are imposed on goods and services
There are no import quotas imposed on goods
and services
There are no costs for labour

12) Briefly outline the role of the World Trade Organisation. (2)

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13) Discuss the arguments for and against free trade. (8)

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14) With reference to Fig.6, identify two causes of absolute poverty. (2)

Cause 1

Cause 2

15) With reference to Fig. 7, identify which countries had the highest percentage of the population
living in absolute poverty in 2013. (1)

16) State and explain two reasons why the level of poverty in Sub-Saharan Africa has not fallen as
rapidly as has been the case in other countries. (4)

Reason:

Explanation:

Reason:

Explanation:

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17) Fig.7 states that ‘in many countries, having a job does not mean an escape from poverty’.
Explain why this can be the case. (4)

18) Discuss whether increasing investment can help to reduce the proportion of the population
living in absolute poverty. (8)

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Use Fig. 9 in answering the following question.

19) NGOs can help developing countries to grow and prosper. Identify three other methods of
supporting developing economies. (3)

Method 1

Method 2

Method 3

Using the information in the case study and your own knowledge of economics:

20) Discuss the extent to which the use of new technology can enable developing nations to achieve
sustainable economic growth. (12)

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End of paper (/80 marks)

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