The City

School
Unified Mid- Year Examination

2019-2020

CLASS 9

SCHOOL
NAME:

INDEX NUMBER: . DATE:

ECONOMICS 2281/22
Paper 2 Structured Questions 2 hours 15 minutes

Additional Materials: Answer Sheet

READ THESE INSTRUCTION FIRST

Write your school name, index number and date in the spaces provided.
Write in dark blue or black pen.
Do not use staples, paper clips, highlighters, glue or correction fluid.

Section A
Answer Question number 1.

Section B
Answer any three questions.

Read the instruction on the Answer Sheet very carefully.

At the end of the examination, fasten all your work securely together.
Number of marks is given in bracket [ ] at the end of each question or part question.
Invigilated By: Checked By: Marks Tallied By:

Section A

Answer this question.

Q1. The Dhaka Stock Exchange is doing well

Grameenphone, the biggest mobile (cell) phone company in Bangladesh with over 21 million
customers, decided in 2009 that it needed more finance to develop its services. To help
generate this finance, Grameenphone announced its intention to raise US$70 million through
selling additional shares.

Grameenphone is a multi-national company which is owned by Telenor, a Norwegian

telephone company, and Grameen Telecom, a non-profit company founded by Muhammad
Yunus. Muhammad Yunus, who is a pioneer of microfinance, also founded the Grameen Bank
which provides loans to people, such as village entrepreneurs, who find it difficult to obtain
finance from traditional sources.

The Stock Exchange in Dhaka, the capital of Bangladesh, has 284 companies listed and the
value of these companies more than doubled between 2007 and 2009. The value of these
companies is now equivalent to approximately 16% of Bangladesh’s Gross Domestic Product.
The opportunity to buy shares in Grameenphone will further increase the value of the Dhaka
Stock Exchange.

The Bangladesh Government has offered financial incentives to multi-national companies to

encourage more of them to locate in Bangladesh.

(a) Explain what is meant by an entrepreneur. [2]

(b) Describe the role that a stock exchange can play in a country’s economy. [4]

(c) Identify two possible reasons why the supply of mobile (cell) phones may increase. [2]

(d) Explain two financial incentives, other than subsidies, which a government might offer
multinational companies to locate in its country. [4]

(e) Discuss whether a multi-national company which locates in a country will always be
advantageous to that economy. [8]
 Section B

Answers any three questions from this section

Q2. Students have to consider the opportunity cost of going to university. University
graduates usually earn more than people who have not gone to university. Having more
graduates influences a country’s production possibility curve. Some economists suggest that
students should pay the full cost of their university courses and accommodation. Others say
that the government should pay some or all of the cost.

(a) Describe a possible opportunity cost of a student going to university. [2]

(b) Explain why university graduates usually earn more than people who have not gone to
university. [4]

(c) Using a production possibility curve diagram, analyse what effect an increase in the number
of graduates will have on an economy. [6]

(d) Discuss whether graduates should pay the full cost of their university education. [8]

Q3. In 2009, a digital currency called Bitcoin was invented. Between 2009 and 2014 there was
a growth in the number of people and firms accepting it as a medium of exchange and store of
value. Financial experts have called for digital money to be regulated by central banks. One of
their concerns is that it could increase the money supply and cause inflation.

(a) Define ‘medium of exchange’. [2]

(b) Explain two ways in which a central bank differs from a commercial bank. [4]

(c) Analyse how an increase in the money supply may cause inflation and a fall in saving. [6]

(d) Discuss central bank functions in an economy. [8]

Q4. All market systems have both advantages and disadvantages.

(a) Explain how resources are allocated in a market system. [5]

(b) Analyse three reasons why a market system could fail. [7]

(c) Discuss whether government intervention in a market is always to be supported. [8]

Q5. Car production is an important economic activity in many countries. Much of this
production is undertaken by large multinational companies. These firms aim to increase both
productivity and production.

(a) Describe two reasons why car production is usually undertaken by large multinational
companies. [4]

(b) Distinguish between firm and industry. [4]

(c) Using an example, explain the multinational companies [4]

(d) Discuss whether the establishment of a multinational company in a country will always be
beneficial for all the workers it employs. [8]