CIE Econs IGCSE Macroeconomics 2

A government lowers the rate of interest.

Who is most likely to be disadvantaged by this policy?

• house buyers

• manufacturers

• retailers

• savers

Which is a supply-side policy that would increase output in the long-run?

• an increase in benefit payments

• an increase in places at training colleges

• an increase in the rate of income tax

• an increase in the rate of tax employers pay

Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept for domestic use.

What was the most likely outcome of the government’s action?

• prices were fixed by the wheat producers

• the amount produced was determined by the government

• the price of wheat abroad fell

• there was a redistribution of domestic production

The government reduces the rate of income tax and increases the rate of tax on producers.

From the initial equilibrium point X, which letter indicates the new equilibrium point in the market?

• A

• B

• C

• D

What is most likely to cause economic growth?

• a better educated workforce

• a reduction in the right to own property

• decreased wages

• higher taxation

A worker earns $250 each week, which leaves a disposable income of $175.

What will affect the real value of the worker’s $250 earned income?

• a change in government spending

• a change in interest rates

• a change in the price level

• a change in the tax rate

The table shows the unemployment rate in three developed economies in June 2013.

What is the main cause of high rates of unemployment in developed economies in periods of recession?

• decreases in total demand

• movement of labour between countries

• reduced levels of technological change

• regional inequalities of wealth

From 2012 to 2013, European economies experienced weak economic growth.

Based on the information on GDP, industrial production and unemployment in the table, which economy performed worst?

• A

• B

• C

• D

What is not a reason why the average size of families is likely to be greater in developing countries than in developed countries?

• Children offer the prospect of security in old age.

• Government child care support is widely available.

• Means of birth control are less available and more expensive.

• Women are less likely to be part of the workforce.

The table shows the proportion of GDP produced by each sector of production in three fictitious countries.

What can be concluded from the table?

• Farland is the least developed economy.

• Highland is the most developed economy.

• It is uncertain which is the most developed economy.

• Lowland is the least developed economy.