RVHS H2 ECONS P2 QP RV

This document consists of 2 printed pages. [Turn over ECONOMICS 9732/02 Paper 2: Essay Questions 22 September 2014 2 hour 15 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your index number and name on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer three questions in total, of which one must be from Section A, one from Section B and one from either Section A or Section B. Start each question on a new sheet of paper. At the end of the examination, fasten your work securely together. Your answers for Section A and B are to be handed in separately, with t he cover page placed on top. Indicate on the cover page the question(s) you have attempted for that section. The number of marks is given in brackets [ ] at the end of each question or part question. RIVER VALLEY HIGH SCHOOL YEAR 6 Preliminary Examination in preparation for General Certificate of Education Advanced Level Higher 2

2 © RVHS 2014 9732/02 Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 Increasing affluence and advances in modern technology have contributed to the proliferation of e -reading devices and e -books. In addition, an increasing number of publishing companies have started to produce e-books. Discuss how these developments might affect the revenue earned from the sales of e - books and related products. [25] 2 The degree of market dominance is often associated with the size of a firm. (a) Explain how the degree of market dominance affects the amount of profits earned by a firm. [10] (b) Discuss whether economic analysis favours large firms over smaller ones. [15] 3 (a) Using the product and resource markets, explain the signalling and incentive functions of prices. [10] (b) Discuss the extent to which these functions of prices are reliable. [15] Section B One or two of your three chosen questions must be from this section. 4 Faced with a huge budget deficit, the governments of many countries have had their hands tied in reviving their economies. (a) Explain the factors that will determine whether a budget deficit is a major concern to an economy. [8] (b) Assess the policy options available to stimulate an economy if its budget deficit is of a major concern. [17] 5 The IMF highlighted that the first line of defence against slowing growth should be to allow the automatic stabilisers to operate, monetary policy easing and measures to ease the flow of credit. (a) Explain how automatic stabilisers and measures to ease the flow of credit are the first line of defence against slowing growth. [8] (b) Discuss whether it is useful to adopt a more aggressive fiscal policy. [17] 6 Higher oil costs, rising housing rents, more expensive private transportation and unemployment near a three -year low have l ed the Monetary Authority of Singapore to raise its 2012 inflation forecast. Discuss the view that Singapore’ s ability to achieve price stability is determined by her economic integration with the rest of the world. [25]