0455 Economics November 2024 Question Paper 21

1 (a) Calculate the percentage of the population who were foreign nationals living in the UAE. [1]

(b) Identify two features of globalisation. [2]

(c) Explain one factor that can influence labour mobility between countries. [2]

(d) Explain one advantage and one disadvantage of producing a product which is price-inelastic in demand such as oil. [4]

(e) Explain the relationship between the oil price and the UAE’s current account balance. [4]

(f) Analyse, using a production possibility curve (PPC) diagram, the effect of technological progress on an economy such as the UAE. [5]

(g) Discuss whether or not luxury tourism and financial services have helped Dubai achieve economic development. [6]

(h) Discuss whether or not having a fixed exchange rate is beneficial for a country such as the UAE. [6] Section B Answer any three questions. Each question is introduced by stimulus material. In your answer you may refer to this material and/or to other examples that you have studied.

2 Unemployment in the United Kingdom (UK) fell in December 2021 to 4.1%. Market forces would usually mean that wages would increase due to this lower unemployment. However, workers’ living standards did not increase. New international trade deals were not made fast enough to offset the decreasing trade between the UK and the European Union.

(a) Identify two ways of measuring unemployment. [2]

(b) Explain two factors that could influence living standards, apart from unemployment rates. [4]

(c) Analyse how market forces can increase wages. [6]

(d) Discuss whether or not free trade between countries increases economic growth. [8]

3 Approximately 95% of students in Macao, a special administrative region of China, attend a private school. Internationally, competition for students is high amongst private schools. Private schools are often technologically innovative in their methods of teaching. However, some argue that private schools make the government aim of redistribution of income more difficult to achieve.

(a) Define privatisation. [2]

(b) Explain how technological innovation can benefit firms. [4]

(c) Analyse the effects of increased competition amongst firms. [6]

(d) Discuss whether or not improving education can help a government achieve its macroeconomic aims. [8]

4 The World Trade Organization (WTO) estimates that India has the largest levels of trade protection of any major economy. The highest tariffs are imposed on products from the primary sector. For example, in 2018 India imposed a tariff of approximately 90% on imports of coffee to protect its coffee farmers. However, the markets for coffee substitutes and complements do not have such levels of government intervention.

(a) Identify two methods of trade protection apart from a tariff. [2]

(b) Explain how the price of coffee substitutes and complements can affect the demand for coffee. [4]

(c) Analyse possible reasons why a government may want to intervene in a market. [6]

(d) Discuss whether or not high tariffs can reduce unemployment. [8]

5 Hawaii’s economy has grown due to tourism but the growth in this sector has also increased inflation in this US island state. It is estimated that 9% of Hawaii’s population were living in poverty in 2022. Many families struggled to save. Young workers were able to leave due to high levels of labour mobility between US states. However, Hawaii is now facing an ageing population including many more retired people.

(a) Define labour mobility. [2]

(b) Explain the effects of an ageing population on spending and saving levels. [4]

(c) Analyse how a rise in tourism can increase inflation in an economy. [6]

(d) Discuss whether or not fiscal policy is effective in reducing poverty. [8]