2025 ASR-VJC-TJC H3 Economics Prelim Paper QP

1 © ASRJC Economics Department 9809/01/JC2 Prelim/2025 [Turn Over ECONOMICS 9809/01 Paper 1 23 September 2025 No Additional Materials are required. 3 hours 15 mins 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 booklet s, ask the invigilator for a continuation booklet. Section A Answer all questions. Section B Answer two questions. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 7 printed pages and 1 blank page. ANDERSON SERANGOON JUNIOR COLLEGE JC2 PRELIMINARY EXAMINATION Higher 3

2 © ASRJC Economics Department 9809/01/JC2 Prelim/2025 [Turn Over Section A Answer all questions in this section. 1 Issues in Cryptocurrency Extract 1: What is Cryptocurrency (Crypto)? A cryptocurrency is a digital or virtual currency secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. It is a form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities. Some experts believe blockchain and related technologies will disrupt many industries, including finance and law. The advantages of cryptocurrencies include cheaper and faster money transfers and decentralized systems that do not collapse at a single point of failure. The disadvantages of cryptocurrencies include their price volatility, high energy consumption for mining activities, and use in criminal activities. Source: Investopedia, assessed 3 December 2024 Extract 2: Why Investors buy Crypto In a little more than a decade, investors have transformed cryptocurrency from a techno - curiosity into a trillion-dollar-plus opportunity that has the potential to one day reshape the global economy. A new study by Harvard Business School professor Marco Di Maggio shows that on average, cryptocurrency investors have higher household incomes, live in wealthier and more educated ZIP codes, like to gamble, frequently use credit cards, and often overdraft their checking accounts. Moreover, these investors are drawn by the lure of potentially higher returns in a “lottery-style payoff” than the returns expected from traditional investments. Plus, the COVID-19 stimulus money led new investors to experiment with cryptocurrencies, according to the study. Yet while crypto investors might have a higher risk tolerance than more typical investors, they make decisions based on the same variables as other investors in traditional asset markets. At the same time, the industry finds itself in the spotlight of regul