CSEC Economics Paper 1 May/June 2008 - Free CXC Past Paper with Answers

their joint monthly income

the possibility of a job promotion for Peter

the acquisition of a new home by Sita's best friend

the high cost of renting their current home

Their wants are scarce and their resources are limited.

Their resources are insufficient to satisfy all their wants.

Their resources increase more rapidly than their wants.

They receive most of their goods and services at no cost.

specialisation

progress

productivity

entrepreneurial ability

An increase in the supply of good Z

An imposition of a 100 per cent tax on good Z

The placement of a 100 per cent subsidy on good Z

The advertisement of good Z as an impressional good

The hamburger he gives up

The price of the chicken and chips

The price of the hamburger

The satisfaction he gets from the chicken and chips

W

X

Y

Z

An increase in wages

An increase in prices

An increase in trade

An improvement in technology

supply will increase

supply will decrease

demand will decrease

price will increase

buyers and sellers determine prices

producers are never efficient

profits are lower

there are higher unemployment levels

bank tellers and supervisors

shareholders of the bank

investment managers in the bank

maintenance workers employed by the bank

Devaluation of the currency

A credit squeeze

Granting of export subsidies

Imposition of import controls

expenditure

wages

rent

profit

factors of production

goods and money

services and money

services and investment

OY

OY₁

OY₂

OY₃

Shareholders of the bank

Special savings account for students

The building

The bank's vault

Workers

Investors

Entrepreneurs

Managers

The land on which the mine is located

A worker employed to work in the mine

A company that uses the mineral

A person who invests capital in mining operations

The type of government in the country

The method of allocating resources

The price of goods in the private sector

The ownership of resources by the state sector

A planned economy

A market economy

A mixed economy

A subsistence economy

private good

positive externality

negative externality

merit good

many buyers and one seller

freedom of entry and exit

selling of homogeneous products

perfect knowledge of market conditions

I

II

III

IV

A decline in social welfare

An increase in poverty throughout the economy

Increasing levels of unemployment among skilled and unskilled labour

Adequate amounts of all goods and services for consumers

Farmers' profit margins increase as price increases.

Farmers are willing to increase supply as demand increases.

Farmers pass on increased cost to consumers.

Farmers are willing to produce more as price increases.

Money that government declares must be accepted if offered as settlement of debt

Money that has no direct backing of gold

Assets that can be converted immediately into a known amount of money

Assets which only perform the function of a store of wealth

the country has a surplus of foreign currency.

the value of the country's imports is greater than its exports.

the country can purchase more imports than previously with the same quantum of exports.

the country cannot purchase more imports.

public companies

governments

insurance companies

importers

provide businesses with capital

provide aid to countries in need

accept deposits from members of the public

manage the issue of treasury bills

Unit of account

Store of value

Standard of deferred payment

Medium of exchange

Share market

Development Bank

Credit union

Trade union

A citizen of Country X purchases a vehicle from a foreign country.

A citizen from a foreign country receives dividends from his investment in a company in Country X.

A citizen from Country X receives interest payments from investment in a bank in a foreign country.

A tourist from a foreign country visits and spends money in Country X.

Visible trade account

Balance of trade account

Invisible trade account

Capital account

durability

liquidity

portability

divisibility

Engage in trade with other low cost producers of goods.

Impose restictions on goods imported from other countries.

Increase the importation of goods.

Reduce the volume of exports to other countries.

Treasury bonds

Corporate bonds

Equity securities

Shares on the stock exchange

2004

2005

2006

2007

Increasing bank lending

Increasing import duties

Reducing government expenditure

Reducing direct taxation

Employment in the manufacturing sector increased.

There was a decline in the Gross Domestic Product (GDP).

There was a decline in the sale of manufactured products.

There was a decline in manufacturing output as a share of GDP.

falls under a fixed exchange rate regime

rises under a flexible exchange rate regime

rises under a fixed exchange rate regime

falls under a flexible exchange rate regime

private investment

public expenditure

state planning

trade barriers

The export of goods to another country

The use of local banking services by a foreign company

Payment of dividends by a foreign company

Establishment of a steel industry by a foreign company

Unitary elastic

Elastic

Inelastic

Cross elastic

I

II

III

IV

the 'poverty trap'

diseconomies of scale

foreign direct investment

problems faced by developed countries

High levels of unemployment

Major production of manufactured goods

Low levels of capital formation

A high debt burden

They will enjoy greater access to a Variety of goods.

Goods and services will be provided at lower costs.

Prices of goods and services will be reduced.

Prices of goods and services will increase.

consumers only

government only

government and producers only

government, producers and consumers

The International Monetary Fund

Specialisation

The World Bank

Globalisation

0.98

1.2

2.0

120.0

The price of cameras will fall.

The price of cameras will rise.

The supply of cameras will fall.

The price and supply of cameras will remain the same.

structural adjustment

globalisation

bi-lateral agreement

protectionism

Unit of account

Form of credit

Store of value

Medium of exchange

short-term loan to the government

long-term loan to the government

long-term loan to the Central Bank

short-term loan by the Central Bank

Their liquid assets will be reduced.

Their ability to create credit will increase.

Their loans to money markets will increase.

They will attract less deposits from the public.

Increased taxation on wheat producers

Increased advertising by wheat producers

Government subsidies to wheat farms

Legislation to limit the use of pesticides by wheat producers

$4

$8

$12

$16

$8

$12

$16

$20

Financial

Marketing

Managerial

Technical