Analyzing Paper 1 (SL) May 2005 Explain how a buffer stock system might be used to stabilize agricultural prices.

Discuss the view that intervention in agricultural markets causes more problems than it solves. Describe the main causes of inflation. “If inflation is a major problem faced by governments it must follow that the opposite, deflation, is desirable.” To what extent do you agree with this statement? Describe three possible economic consequences of a persistent current account deficit for a country. Evaluate different methods of correcting a current account deficit. Explain the main characteristics of a market economy. Evaluate the proposition that economic development is best achieved through the market system.

November 2005 Explain the importance of price in allocating scarce resources. Evaluate the possible consequences of implementing maximum and minimum price controls. Explain the costs of inflation and the costs of deflation. Evaluate demand-side policies as a means of reducing inflation. Explain three factors which might cause the value of a currency to appreciate. Evaluate the possible effects of such an appreciation on an economy. Explain two significant barriers to economic growth in LDCs. Evaluate strategies that may be used to overcome the two barriers identified in (a).

Evaluate the likely impact on an economy of a substantial rise in the level of interest rates. Discuss the view that exchange rate changes are the most important factor in determining a country’s export sales. Identify the components of aggregate demand and briefly explain two factors which might determine each of these components. Explain the likely consequences of a deterioration in the terms of trade for a country’s balance of payments on current account. Explain the various types of aid which a developing country might receive. May 2007 Explain the signalling and incentive functions of price in market economy. Discuss the view that there is strong justification for government intervention in the market for health care. Evaluate the proposition that government intervention in the market for tobacco is justified. . Explain how an increase in the quantity and quality of a nation’s factors of production can promote economic development.” Evaluate this statement. “Aid is an ineffective means of promoting the development of poorer countries. Use AD/AS (aggregate demand/aggregate supply) diagrams to explain the causes of inflation Evaluate the view that governments should make the control of inflation their highest priority. Explain how changes in a country’s exchange rate may occur under a floating exchange rate system. Explain how resources are allocated between competing uses in a market economy.Analyzing Paper 1 (SL) May 2006 The basic economic problem is one of scarcity of productive resources. Evaluate the view that a deterioration in the terms of trade is the most significant barrier to economic development that a developing country can face in the area of international trade. Evaluate the impact of globalization on the economic development of developing countries.

Distinguish between cost push inflation & demand push inflation. Evaluate the view that it is best to allow primary commodity prices to be determined purely through the free interaction of market forces. Evaluate the view that the most effective way that a government could improve the welfare of its citizens is through the pursuit of faster economic growth. a country’s economic performance can only be improved through the implementation of supply-side policies.Analyzing Paper 1 (SL) November 2007 Using supply and demand analysis. and how this contributes to the problem of price instability for primary commodity producers. Evaluate the view that the consequences of inflation are more harmful to an economy than the consequences of unemployment. Evaluate the extent to which a deficit on a country’s current account might be considered an economic problem. “In the long-run. Evaluate the extent to which protectionism may be justified in international trade. Explain three institutional factors that contribute to potential economic growth in developing countries. Evaluate the possible role of price controls in agricultural markets.” Evaluate this statement. . Explain three types of protectionism that a government might adopt in the context of international trade. May 2008 “The price elasticity of demand and the price elasticity of supply for many primary commodities tend to be low. explain why the price of agricultural goods tends to fluctuate more than the price of manufactured goods. Explain how development might be measured.” Explain what is meant by this statement. Identify three types of protectionism and explain how each may be used to correct a balance of payments deficit on current account. Evaluate the view that economic growth will lead to economic development. Explain how fiscal policy could be used to increase aggregate demand.

Explain three factors which may cause changes to occur in a country’s exchange rate under a floating exchange rate system. May 2009 Using an appropriate diagram. explain the causes of inflation. Evaluate the methods available to a government to correct a current account deficit. Evaluate the view that trade is more effective than aid in achieving economic development. Evaluate the view that. Evaluate the effectiveness of demand-side policies in reducing inflation. . There are various types of unemployment. in terms of achieving economic development in less developed countries. interventionist strategies. With the aid of diagrams. Evaluate the likely impact on a country’s economic performance of a substantial depreciation of its exchange rate. explain how negative externalities are a type of market failure.Analyzing Paper 1 (SL) November 2008 With the aid of a diagram. may all act as barriers to economic development. Explain how any three types of unemployment may cause a rise in the unemployment rate of an economy. Explain the likely consequences of an increase in a country’s current account deficit. Institutional and political factors such as an ineffective taxation structure. explain the difference between actual economic growth and potential economic growth. with a role for the government. Evaluate the view that the unemployment rate can be most effectively reduced through the use of measures designed to increase aggregate demand in an economy. Evaluate the measures that a government might adopt to correct market failure arising from negative externalities. Explain three barriers to economic development for developing countries. as well as social and cultural factors such as gender issues and tradition. are preferable to market-led strategies. political instability and an unequal distribution of income. Evaluate the extent to which economic growth may contribute to market failure. Explain how any three of these factors may act as barriers to economic development.

opportunity cost and resource allocation. such as health care and education. Explain two factors that might negatively affect a country’s current account in its balance of payments. explain the concepts of scarcity. Explain two possible demand-side factors that may cause an increase in the level of unemployment. Explain how buffer stock schemes/commodity price agreements may be used to reduce wide fluctuations in primary commodity prices. . choice. Evaluate the view that demand-side policies are more effective than supply-side policies in reducing the level of unemployment. This means the provision of merit goods.Analyzing Paper 1 (SL) November 2009 Using at least one production possibility curve diagram. developing countries must lessen their dependence on the production of primary commodities. to achieve greater growth and development. Evaluate the view that. Evaluate the view that current account deficits are best corrected through the use of policies designed to reduce aggregate demand. should always be left to market forces. “The process of resource allocation is most efficiently carried out through the free interaction of demand and supply.” Evaluate this statement.

Using appropriate diagrams. investment.” Evaluate this view. Evaluate the possible impact of an increase in consumption expenditure on the performance of an economy. explain the difference between a movement along an existing demand curve for a good and a shift of the demand curve for a good. in the long term. Explain two factors which may cause an appreciation of a country’s exchange rate. Evaluate the extent to which an appreciating exchange rate may benefit or harm an economy. Evaluate the view that the best way that developed countries can help the growth and development process of very poor. Explain why economic growth rates may differ between developing countries. Evaluate the use of supply-side policies to improve the performance of an economy. Explain the possible consequences of an improvement in a country’s terms of trade for a country with a current account deficit. explain the difference between demand-side and supply-side economic policies. Aggregate demand consists of consumption. November 2010 Explain how taxes and subsidies differ in their effect on the market price and quantity of a good. Evaluate the view that. Explain two factors that may influence consumption and two factors that may influence government spending. and how each of these may be measured. “It is essential that a government supports its farmers by subsidizing agricultural output. . expenditure-switching policies (protectionism) are the most effective way to reduce a current account deficit. Evaluate the role of foreign direct investment in assisting a developing country to achieve greater growth and development. Evaluate the view that the market forces of demand and supply will always lead to the best allocation of resources. government spending and net exports (exports minus imports).Analyzing Paper 1 (SL) May 2010 With the aid of at least one diagram. Explain the difference between economic growth and economic development. highly indebted countries is through a general cancellation of debts.

Evaluate the reasons why countries try to restrict free trade through protectionism." Evaluate this view. Explain the differences between foreign direct investment (FDI) and aid. Evaluate the extent to which market forces should be used to lessen the problem of environmental pollution. Using appropriate diagrams. explain the factors which might cause a depreciation of a country's exchange rate. “A depreciation of a country’s exchange rate will always have a beneficial effect on the performance of its economy. Explain the main features of market-led strategies used to achieve economic development in less-developed countries (LDCs). Explain three factors that could cause an economy to go into a recession. Explain the benefits a country might experience from an increase in free trade. .Analyzing Paper 1 (SL) May 2011 Explain the roles of market forces and government in allocating resources in a mixed economy. Evaluate the view that aid is an effective means to achieve economic growth and development in less-developed countries (LDCs).” Evaluate this view. Evaluate the view that economic development in less-developed countries (LDCs) can best be achieved through market-led strategies rather than interventionist strategies. Evaluate the effectiveness of governments using demand-side policies to take an economy out of a recession. Using a diagram. explain how a reduction in income tax could affect both aggregate demand and aggregate supply in an economy. the better. “The lower the level of both direct and indirect taxation. November 2011 Explain the differences between price elasticity of demand (PED) and cross-elasticity of demand (XED) Discuss the usefulness of price elasticity of demand (PED) and cross-elasticity of demand (XED) to businesses trying to increase their sales revenue.

Analyzing Paper 1 (SL) MICRO MACRO INTL DEVEP HyBRIDs .

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