NYJC_H2_Economics_P1

J2 H2 Economics (9732/1) 1 PAPER 1 Thursday 4 September 2014 08:00 – 10:15 TIME : 2 hours 15 mins INSTRUCTIONS TO CANDIDATES Do not open this paper until you are told to do so. Write your name, class and name of economics tutor in the space provided on the writing paper. Answer all questions. The number of marks is given in the brackets at the end of each question. Write your answers on the writing papers provided. If you use more than one sheet of paper, fasten the sheets together. Submit the answers for both case study questions separately. You are advised to spend several minutes per question reading through the data and questions before you begin writing your answers. There are _8_ printed pages including this cover page PRELIMINARY EXAM 2014 Economics JC2 H2 (9732) NYJC

J2 H2 Economics (9732/1) 2 Answer all questions. Question 1 Ageing Population Extract 1: Economic opportunities in an ageing population The ageing population offers a myri ad of opportunities for businesses. Some 135 pharmaceutical and biotechnology companies are now developing 294 medicines aimed at diseases that disproportionately affect older people, like cancer, heart disease and stroke, according to study results that were released last week by the Pharmaceutical Research and Manufacturers of America, a trade group based in Washington. Pharmaceutical companies may be steadily losing the patent protection on their established drugs in the United States, but sa les from new medications that cater to an aging population could more than make up for any lost revenue. And there are plenty of these drugs in the pipeline. Source: http://www.globalaging.org/health/us/ph.htm Figure 1

J2 H2 Economics (9732/1) 3 Extract 2: A billion shades of grey The world is on the cusp of a staggering rise in the number of old people, and they will live longer than ever before. T he experience of the 20th cent ury, when greater longevity translated into more years in retirement ra ther than more years at work, has persuaded many observers that this shift will lead to slower economic growth and “secular stagnation”, while the swelling ranks of pensioners will bust government budgets. But the notion of a sharp division between the working young and the idle old misses a new trend, the growing gap bet ween the skilled and the unskilled. Employment rates are falling among younger unskilled people, whereas older skilled folk are working longer. The divide is most extreme in America, w here well-educated baby-boom ers are putting off retirement while many less-skilled younger people have dropped out of the workforce. Policy is partly responsible. Many European governments have abandoned policies that used to encourage people to retire