Q27. If there is international specialisation, the structure of the economy changes—as country only focuses on one industry. Hence, workers in other industries lose job, having structural unemployment, so B.
Q11. You are finding the new equilibrium (point where demand and supply meets), so you should only focus on that. You can just ignore the minimum wage, as surplus of labour occurs and no new equilibrium point is formed. Hence, only focus on the shift in supply. So B.
Q19. Find the difference of CPI between neighbouring years to find inflation. If you do that, rate of inflation is highest in year 2. So C.
Q20. In a deflated economy, consumers expect the price will go down in future, so they delay spending. So A.
Q9. When income rises slowly compared to the rate of inflation, purchasing power falls. As a result, savings don't rise. So B.
Q17. This is just the definition of money supply. B.
Q28. For this question, options ABC all discourages globalisation (it creates a barrier in between). So D.
For question 19, you should acknowledge the difference between CPI and the rate of inflation. They are both used to see how the market prices have changed, but there are some minor differences. For CPI, you are right. It should be referred to the base year, but for rate of inflation, it should be referred to the neighbouring year. For example, if an object is $100 in base year, then in year 2 it would be $101.1, and in year 3 it would be $101.8. Afterwards, you can calculate the rate of inflation in year 3 by ($101.8)/($101.1)*100. Do this for every year, and year 2 would have the highest rate.
For question 20, imports decrease because goods and services in a country is cheaper compared to imports. I reckon you should know the difference between real value of money and exchange rate. Real value of money is how much goods and services you can buy with 1$ in an economy, but exchange rate is how much other currency you can get from 1$.
For question 9, a is wrong because if confidence fall, consumers are uncertain about their future, so they would more likely save more money for their future.
For question 28, option a is wrong because controls on foreign exchange can be seen as a barrier to exchange currencies, which is similar to a protectionist measure.
Hi, thank you for your question.
Q27. If there is international specialisation, the structure of the economy changes—as country only focuses on one industry. Hence, workers in other industries lose job, having structural unemployment, so B.
Q11. You are finding the new equilibrium (point where demand and supply meets), so you should only focus on that. You can just ignore the minimum wage, as surplus of labour occurs and no new equilibrium point is formed. Hence, only focus on the shift in supply. So B.
Q19. Find the difference of CPI between neighbouring years to find inflation. If you do that, rate of inflation is highest in year 2. So C.
Q20. In a deflated economy, consumers expect the price will go down in future, so they delay spending. So A.
Q9. When income rises slowly compared to the rate of inflation, purchasing power falls. As a result, savings don't rise. So B.
Q17. This is just the definition of money supply. B.
Q28. For this question, options ABC all discourages globalisation (it creates a barrier in between). So D.