9708 Economics November 2025 Question Paper 32

An increase in the likelihood of taking risks because another party is paying for these risks.

100 quantity of good Y quantity of good X What determines the slope of the budget line? the marginal rate of substitution of good X for good Y

U V W X O MPB MSB MPC MSC cost, benefit ($) quantity VO

monopolistic competition

marginal utility of good Y marginal utility of good X quantity 110 If a consumer spends all of their income on goods X and Y, which combination of goods would they choose to maximise their utility? 1 unit of X and 1 unit of Y

that the marginal social cost of manufacturing equals the marginal social benefit

O price $ MR MC AC AR A B C D quantity What might help achieve allocative efficiency?

differentiated products

the aim of satisficing

Decreasing the threshold for paying income tax to $10000 for all taxpayers.

price O P1 Q1 Q2 Q3 P2 S

in an industry that is protected by tariffs on imports from abroad

What is likely to reduce the domestic money supply? Banks being allowed to hold a lower liquidity ratio.

Many foreign businesses have moved out of the country.

inflation is below its target rate

What is most likely to increase if an economy enters a negative output gap?

business confidence

level of employment Marshall−Lerner condition satisfied below full employment no

an increase in the frequency of income payments

government borrowing increases

balance of payments deteriorates and inflation increases

change in inflation rate due to demand-pull factors change in inflation rate due to cost-push factors decrease decrease

a decrease in interest rates

Economic development is necessary for economic growth.

the price of one currency against a basket of other currencies

characteristic 2 characteristic 1 tied bilateral

revaluation of the exchange rate

cumulative share of income % 100 100 cumulative % of households

long run short run greater than 1.0 greater than 1.0

an agricultural sector with a growing % of GDP