NYJC_H2_ECONS_CSQ2_QP_with_answers

Question 2: UK and EU: A Tale of Two Economies Extract 4: The Evolution of the Eurozone The common currency was an outgrowth of efforts that began in the mid-20th century, as Europe reeled from the carnage and disruption of two world wars. In 1957, this vision came closer to being a reality with the signing of the Rome treaty, which established the European Economic Communi ty (EEC), comprising of Belgium, France, Italy, Luxembourg, the Netherland s and West Germany. Step by step, restrictions were eased on work, travel and trade between the ex panding list of EEC countries. The European Union (EU) was established in 1993 and created much of its economic structure and institutions – including setting in motion the process of adopting a common currency, the Euro. Advocates of the Eurozone rightly argue that it was not just an economic project that sought to improve standards of living by increasing the efficiency of resource allocation, pursuing the principles of comparative advantage, enhancin g competition, taking advantage of economies of scale and st rengthening economic stability. More importantly, it was a political project; it was supposed to enhance the political integration of Europe, bringing the people and countries closer together and ensuring peaceful coexistence. Source: The Problem with Europe is the Euro, The Guardian, August 2016 Extract 5: Brexit Countries band together to promote trade, defend human rights, protect the environment and repel threats. They sign treat ies and join international groups, and each time they do, they give up a bi t of independence. That happened in a big way with the creation of the Eur opean Union (EU), a free-tr ade zone and global political force forged from different European countries. Freedom of movement for labour is one of the key principles of the EU. However, this ease of movement has been attacked in the UK, which had an unexpectedly high level of migration from several old Soviet bloc states after they joined the EU. Findings from the British Social Attitudes (BSA) survey revealed that Brexit was the result of widespread concern over the numbers of people coming to the UK that strained public services– millions of whom have done so under the EU’s freedom of movement rules in recent years. As a result, the people of the UK, in a June 2016 referendum, shocked the world by voting to leave the bloc they'd joined in 1973. The way many Britons saw it, the EU was expensive, out of touch and a source of uncontrolled immigration. They chose what's become known as Brexit. Adapted from: Bloomberg, December 2017

Extract 6: The Pros and Cons of Leaving the EU The Eurozone economy is growing twice as fast as the UK’s. The Eurozone economy’s gross domestic product grew 0.6 percent in r eal terms in the second quarter of the year — versus 0.3 percent for the UK Contrary to appearances, this is good news for Britain. But it also illustra