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Economics Test Questions

The document outlines an economics test consisting of two sections: Section A focuses on data response questions related to inflation, economic growth, and government policies in a developing country, while Section B contains structured questions on topics such as opportunity cost, market structures, fiscal policy, and globalization. Each section includes specific questions aimed at assessing students' understanding of economic concepts and their application. The test emphasizes critical analysis and evaluation of economic scenarios and policies.

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Kasturi Subramaniam
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61 views2 pages

Economics Test Questions

The document outlines an economics test consisting of two sections: Section A focuses on data response questions related to inflation, economic growth, and government policies in a developing country, while Section B contains structured questions on topics such as opportunity cost, market structures, fiscal policy, and globalization. Each section includes specific questions aimed at assessing students' understanding of economic concepts and their application. The test emphasizes critical analysis and evaluation of economic scenarios and policies.

Uploaded by

Kasturi Subramaniam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Economics Test Questions

Section A: Data Response (Compulsory Question - 30 marks)

Scenario:

A developing country has recently experienced rapid population growth and an increase in
inflation. The government has introduced policies to control inflation and promote economic
growth. The table below shows some key economic indicators of the country.

Year GDP Growth Rate (%) Inflation Rate (%) Unemployment Rate (%)
2022 4.5 8.0 6.2
2023 3.8 7.5 6.5

Questions:

1. Define inflation and explain how it is measured. (4 marks)


2. Using the data in the table, identify and describe the trend in inflation and
unemployment rates between 2022 and 2023. (4 marks)
3. Explain two possible causes of inflation in a developing country. (6 marks)
4. Analyse how a rapid increase in population could impact economic growth and
unemployment in the country. (8 marks)
5. Evaluate the effectiveness of government policies to reduce inflation and promote
economic growth. (8 marks)

Section B: Structured Questions (Choose 3 out of 4, 20 marks each)

Question 1: The Basic Economic Problem

1. Define opportunity cost and explain its importance in economic decision-making. (4


marks)
2. Describe how a production possibility curve (PPC) can be used to illustrate the concept
of opportunity cost. (4 marks)
3. Analyse how a country’s factors of production influence its ability to produce goods
and services. (6 marks)
4. Evaluate whether a country should allocate more resources to producing consumer
goods rather than capital goods. (6 marks)

Question 2: Market Structures and Firms

1. Define monopoly and identify two characteristics of a monopoly market structure. (4


marks)
2. Explain two advantages and two disadvantages of monopolies for consumers and
producers. (4 marks)
3. Analyse how economies of scale can benefit large firms in a monopoly market. (6
marks)
4. Evaluate whether governments should regulate monopolies. (6 marks)

Question 3: Government and the Macroeconomy

1. Define fiscal policy and identify two fiscal policy tools that a government can use to
influence the economy. (4 marks)
2. Explain how an increase in government spending can lead to economic growth. (4
marks)
3. Analyse the possible impact of higher taxation on consumers and producers. (6 marks)
4. Evaluate whether taxation is an effective tool to reduce income inequality in an
economy. (6 marks)

Question 4: International Trade and Globalisation

1. Define globalisation and identify two factors that contribute to globalisation. (4 marks)
2. Explain two advantages and two disadvantages of globalisation for developing
countries. (4 marks)
3. Analyse how exchange rate fluctuations can affect a country’s trade balance. (6 marks)
4. Evaluate whether protectionist policies are beneficial for a country’s economy. (6
marks)

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