0455 Economics June 2025 Question Paper 23

1 (a) Calculate the number of people who are in poverty in Egypt. [1]

(b) Identify two of Egypt’s primary sector exports. [2]

(c) Explain how building a new city can reduce unemployment. [2]

(d) Explain why tourism is a good source of economic growth for Egypt. [4]

(e) Draw a demand and supply diagram to show the likely effect of falling incomes on the market for housing in the new city. [4]

(f) Analyse the relationship between investment (as a % of GDP) and economic growth rates for Egypt. [5]

(g) Discuss whether or not deregulation in education in Egypt will increase living standards. [6]

(h) Discuss whether or not a fall in the value of the Egyptian currency would harm the Egyptian economy. [6] Section B Answer any three questions. Each question is introduced by stimulus material. In your answers you may refer to the material and/or other examples you have studied.

2 One of the world’s more expensive roads opened in Montenegro in 2022. To build the road, the Montenegro Government was helped by a foreign commercial bank and another multinational company (MNC). This new road could help the Montenegro Government achieve its macroeconomic aims and increase Montenegro’s international trade. MNCs can have a significant impact on the host countries in which they locate.

(a) Define international trade. [2]

(b) Explain the importance of commercial banks to governments. [4]

(c) Analyse how building roads can help a government achieve its macroeconomic aims. [6]

(d) Discuss whether or not MNCs benefit host countries. [8]

3 The public sector in Andorra is focusing on developing the healthcare, biotechnology and sports industries. Andorra has the natural advantage of being a mountainous country. Several winter sports firms in Andorra have recently merged. This will affect the level of competition in the winter sports market in Andorra.

(a) Define public sector. [2]

(b) Explain two types of merger. [4]

(c) Analyse how differences in healthcare can lead to differences in economic development between countries. [6]

(d) Discuss whether or not competitive markets are beneficial for consumers. [8]

4 As cities experience economic growth, the buildings in the city become taller. This is driven by an increase in the willingness and ability of consumers to live in tall buildings. Changes in the conditions of supply have also increased the number of tall buildings being constructed. However, there is a limit to the height of buildings – above a certain height, the total cost of constructing the building will exceed the total revenue generated.

(a) Define total cost. [2]

(b) Explain two causes of an increase in the supply of a product. [4]

(c) Analyse factors that can increase the willingness and ability of consumers to buy a certain product. [6]

(d) Discuss whether or not economic growth will improve living standards in a city. [8]

5 Missions to outer space face the same basic economic problem as that experienced on Earth. The African Space Agency was created to improve science and technology on the African continent. This agency also aims to coordinate trade between African countries to help technological development. This may improve how markets work. In 2021, total government spending on this agency was more than $500 million.

(a) Define the basic economic problem. [2]

(b) Explain how a market allocates resources. [4]

(c) Analyse the benefits a country may gain from exporting to and importing from other countries.

[6]

(d) Discuss whether or not an increase in government spending will benefit an economy. [8]