CJC H2 Prelim Paper 1 QP + SAMS_For sharing

© Catholic Junior College 9570/01 JC 2 PRELIMINARY EXAMINATION/2023 CATHOLIC JUNIOR COLLEGE JC2 Preliminary Examination Higher 2 ECONOMICS 9570 /01 Paper 1 24 August 2023 No Additional Materials are required. 2 hours 30 minutes READ THESE INSTRUCTIONS FIRST An answer booklet will be provided with this question paper. You should follow the instructions on the front cover of the answer booklet. If you need additional answer paper ask the invigilator for a continuation booklet. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 8 printed pages. [Turn over

2 © Catholic Junior College 9570/01 JC 2 PRELIMINARY EXAMINATION/2023 Question 1: The Cryptocurrency Revolution Figure 1: Cryptocurrency Prices ($US) Source: CoinMarketCap , assessed 12 July 2023 Extract 1: The Rise of Bitcoin A cryptocurrency is a digital currency which serves as an alternative f orm of payment created using encryption algorithms. Bitcoin and Etherum ar e the two largest cryptocurrencies . Bitcoin ushered in the age of cryptocurrency, but it took q uite a while before the public sat up and took notice. It was created by a mysterious individual with the promise of moving monetary policy out of the hands of governments and central banks into an autonomously managed system. Bitcoin achieved a remarkable rise in 2020 despite many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. Besides all this mainstream enthusiasm, the havoc brought by COVID-19 has led to huge stimulus packages from governments around the globe and many central banks printing more money. This drove up inflation fears and the possibility of eroding purchasing power. In the face of this threat, investments like Bitcoin are being considered a store of value. The price of Bitcoin is notoriously driven by sentiments and is highly volatile. Despit e its volatility, part of what makes Bitcoin valuable is the fact that it is scarce. The maximum supply of Bitcoin is limited to 21 million and there are already about 18.5 million in circulation . The production of additional coins through crypto mining, which is increasingly complex, will incur significant costs where more computers with higher processing power are needed to get Bitcoin today. Given these dynamics, speculators have rushed into the space to take advantage of the anticipated price appreciation. Source: Various

3 © Catholic Junior College 9570/01 JC 2 PRELIMINARY EXAMINATION/2023 Extract 2: Singapore has grand ambitions to become a global crypto hub Singapore is seeking to attract global investments and cement itself as a key player for cryptocurrency-related businesses as financial centers around the world grapple with approaches to handle one o