RVHS H2 ECONS P2 QP

This document consists of 3 printed pages and 1 blank page. [Turn over ECONOMICS 9757/02 Paper 2: Essay Questions 15 September 2017 2 hours 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 as the answers are to be handed in separately. Indicate clearly the question number . 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 II in preparation for General Certificate of Education Advanced Level Higher 2

2 © RVHS 2017 9757/02 Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 Just a year ago, anticipation of higher profits pro mpted cattle farmers in the European Union (EU) to switch to produce dairy, a major ingr edient of many dairy-based products such as cheese. At the same time, the EU abolished dairy production quotas while China, a key importer of EU products, saw slower economic growth. The Economist, August 2015 Using economic analysis, discuss the impact these e vents are likely to have had on EU consumers and farmers. [25] 2 The cornerstone of the Singapore government’s philo sophy towards public housing lies in the Home Ownership Scheme introduced in 1964. It involves the provision of fairly generous and broad-based subsidies to ensure afford able and thus widespread home ownership. Source: Lee Kuan Yew School of Public Policy, 2014 (a) Using appropriate examples, explain the key differences between a merit good and a public good. [10] (b) Discuss the determinants of a government’s decision to intervene in the market for public housing. [15] 3 ‘There is little difference between perfect and imp erfect markets. They all have profit maximisation as an aim, they all are subject to competition and they all exploit resources to benefit the producers rather than the consumers.’ Discuss the validity of this statement. [25]

3 © RVHS 2017 9757/02 Section B One or two of your three chosen questions must be from this section. 4 The prospect that the US Federal Reserve will decid e to start raising interest rates has raised fears about the effects it will have on the economies of emerging markets. (a) Explain how the decision to raise interest rates in the US might affect the economic agents in the domestic sector and its economy. [10] (b) Discuss whether the fears are justified. [15] 5 Economists often distinguish small and open economi es, such as Singapore, from large and less open ones. (a) Explain how size and openness could account for why economies pursue policy mix to different extent. [10] (b) Discuss how far the size and openness of Singapore have influenced her choice of policies to achieve price stability. [15] 6 Discuss how far government policies adopted in Sing apore affect the economy’s patterns of trade. [25]

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