CSEC Economics Paper 2 May/June 2015 - Free CXC Past Paper with Answers

Classify the items listed below as EITHER 'goods' OR 'services'.

Hairdressing

Hairdryers

Tourism

Island tours

Tractors

Explain the THREE resource allocation decisions that are often made under a free market system.

Discuss ONE benefit of entrepreneurial talent that can accrue to Caribbean economies.

Define EACH of the following terms:

Terms of trade

Balance of payments

Name ONE of the three MAIN parts of the balance of payments statement.

Explain the impact of the following situations on the value of the exchange rate of a country under a floating exchange rate system:

An increase in international demand for the country's local products

An increase in local demand for imported goods

Table 2 below shows the combinations of two types of products which two countries are capable of producing with the same amount of resources.

TABLE 2: PRODUCTION CAPABILITIES IN THE MANUFACTURING AND AGRICULTURAL SECTORS

Using the information given, state, with reason, which country has

absolute advantage in the production of the two types of products

a comparative advantage in the production of agricultural products.

Define EACH of the following terms:

Monetary policy

Fiscal policy

Name ONE type of unemployment.

Distinguish between the 'national budget' and 'national debt'.

Discuss ONE weakness in using gross domestic product (GDP) as a measure of the standard of living.

Define EACH of the following terms:

Ceteris paribus

Income elasticity of demand

List THREE characteristics of a monopolist.

Explain how the presence of EACH of the following in the market could cause market failure:

Externalities

Monopolies

Using a diagram, illustrate the impact of a rise in the cost of production in a free market economy on BOTH the equilibrium price and the equilibrium quantity.

Define EACH of the following terms:

Barter

Money

List THREE characteristics of money.

Explain TWO ways in which the roles of the central bank and commercial bank differ.

Discuss how inflation can affect any TWO functions of money.

State EACH of the following abbreviations in full:

IMF

CSME

WTO

FDI

CARICOM

List TWO characteristics of Caribbean economies.

Differentiate between the development strategies of 'import substitution' and 'export push'.

Discuss ONE challenge of implementing e-commerce in the Caribbean.

Identify the central problem in economics.

Define EACH of the following terms:

Need

Want

Opportunity cost

An 18 year old student has just completed CAPE studies and has to decide on her future. Explain TWO economic factors that will influence the decision the student makes.

Draw a production possibility curve/frontier diagram showing the following:

Decreasing opportunity costs

An efficient point

An unattainable point