CSEC Economics Paper 2 May/June 2009 - Free CXC Past Paper with Answers

List TWO functions of money.

Identify THREE roles of the financial sector in an economy.

Explain how the Central Bank can restrict the money supply in a named Caribbean country. Include TWO ways in your response.

Outline THREE functions of a Central Bank other than restricting the money supply.

Define the role of the World Trade Organization (WTO).

List THREE factors that influence the export of goods and services.

Outline TWO factors that might cause a country to devalue its currency.

Discuss TWO consequences of a balance of payments deficit in your territory.

List the THREE methods of measuring national income.

Outline TWO factors that influence savings.

A labour union successfully negotiated higher wages and this resulted in unemployment in the economy. Using a supply and demand diagram, explain why unemployment resulted from this situation.

Distinguish between 'economic growth' and 'economic development'.

Outline TWO factors that influence economic growth in a named Caribbean territory.

List THREE characteristics of Caribbean economies.

"Trade liberalization, brought about by globalization, is creating significant opportunities for Caribbean economies, but at the same time, there are appreciable challenges to overcome."

Define EACH of the following terms:

Trade liberalization

Outline THREE benefits of trade liberalization to Caribbean economies.

Identify TWO challenges referred to in the statement at (b) above.

For EACH of the challenges you identified in (b) (iii) above, outline ONE measure that Caribbean governments can adopt to overcome it.

Define the term 'market failure'.

Outline THREE causes of market failure.

Describe TWO consequences of market failure in the transportation sector in a named Caribbean territory.

Outline TWO factors that might affect the price elasticity of supply of sugar.

With the aid of a diagram, state TWO effects of a shift to the right in the original demand curve, with the supply curve remaining the same.

Define the term 'economies of scale'.

With the aid of a diagram, explain the relationship between the marginal and average cost curves.

Outline TWO factors that might cause inflation in the Caribbean.

Identify ONE consequence of inflation in the Caribbean.

Discuss TWO measures that can be adopted to reduce inflation in your country.