Mock Exam Set 1 - Paper 1

[Maximum mark: 25]

(a) Explain two forms of government intervention that can be used to address positive externalities of consumption. [10]

(b) Using real-world examples, evaluate the effectiveness of command and control regulations and legislations in reducing consumption of demerit goods. [15]

[Maximum mark: 25]

(a) Explain how reduced taxation and increased government spending may impact the circular flow of income. [10]

(b) Using real-world examples, discuss whether an increase in GDP per capita of a country is an appropriate indicator of improved standards of living. [15]

[Maximum mark: 25]

(a) Explain two expenditure switching policies that could be used to correct a persistent current account deficit.[10]

(b) Using real-world examples, discuss the macroeconomic impacts on a country caused by a depreciation of its currency. [15]