MACRO TOPICS
9708/21/M/J/23
4 (a) With the help of an AD/AS diagram(s), explain cost-push inflation and demand-pull inflation
in an economy and consider in what circumstances one may be more damaging than the other.
[8]
(b) Assess whether monetary policy or supply-side policy is likely to be more successful
in reducing the rate of inflation in an economy.
[12]
OR
5 (a) With the help of a diagram(s), explain the likely causes of a depreciation of a floating exchange rate
and consider whether such a depreciation is always beneficial to an economy.
[8]
(b) Assess whether the arguments for protectionism in the context of international trade are
always stronger than the arguments against.
[12]
9708/22/M/J/23
4 (a) Two countries each produce two products and wish to trade with each other.
Explain the difference between the principles of absolute advantage and comparative
advantage and consider whether the principle of comparative advantage is always the more
important influence when each country is deciding whether to trade with each other.
[8]
(b) Assess whether protectionism is the best way to correct a deficit in the current account of the
balance of payments.
[12]
OR
5 (a) Explain the difference between costpush and demandpull inflation and consider which
is more likely to occur if there is a depreciation in the exchange rate of a country with few
natural resources.
[8]
(b) Assess whether monetary policy is the only way to control a high rate of
inflation. [12]
9708/23/M/J/23
EITHER
4 (a) With the help of a circular flow of income diagram, explain how equilibrium is determined
in an open economy and consider whether a budget deficit or a trade deficit is more likely to
cause lasting disequilibrium.
[8]
(b) Assess whether an increase in investment in new infrastructure projects will always have
a positive impact on the circular flow of income in an economy.
[12]
OR
5 (a) Explain how monetary policy may be able to reduce the rate of inflation in an economy
and consider the likely success of this policy.
[8]
(b) Assess how governments use macroeconomic intervention to achieve their macroeconomic
objectives.
[12]
Specimen paper 2023
EITHER
4 (a) Compare the causes of structural unemployment and cyclical unemployment and
consider which of these types of unemployment is likely to be more harmful to an economy.
[8]
(b) Assess whether expansionary monetary policy is likely to be successful in reducing all
types of unemployment.
[12]
OR
5 (a) Explain what is meant by a deficit on the current account of an economy ’s balance
of payments and consider whether a high rate of inflation will always lead to a deficit on the
current account of an economy ’s balance of payments.
[8]
(b) Assess whether a high rate of inflation or a deficit on the current account of the balance of payments is the
more serious problem for an economy.
[12]
9708/22/F/M/24
EITHER
4 (a) Explain what is meant by a depreciation of the exchange rate and consider whether a
depreciation is likely to increase domestic real output. [8]
(b) Assess whether contractionary fiscal policy is likely to be the best way to reduce a current
account deficit on the balance of payments. [12]
OR
5 (a) With the help of an aggregate demand and aggregate supply diagram, explain how a
decrease in interest rates could cause economic growth and consider whether economic
growth will always result in inflation. [8]
(b) Assess whether economic growth is always desirable for an economy. [12]
9708/21/M/J/24
EITHER
4 (a) Explain three of the components of aggregate demand and consider the extent to which they
may be increased without leading to inflation.
[8]
(b) The Chinese government has re-emphasised its commitment to rebalancing the economy
from one focused mainly on investment and exports to one aiming to increase the proportion
spent on domestic consumption.
Assess the extent to which it would be possible to achieve this by fiscal policy alone.
[12]
OR
5 (a) Explain three causes of unemployment and consider which cause is likely to be most
damaging to a high-income economy.
[8]
(b) Assess which expansionary macroeconomic policy would be most likely to enable a
government to meet its economic objective of a low rate of unemployment.
[12]
9708/22/M/J/24
EITHER
4 (a) With the help of a diagram, explain what is meant by the circular flow of income in an open
economy and consider the extent to which it can explain economic growth in such an
economy.
[8]
(b) Assess whether supply-side policy is the most effective way to achieve long-run economic
growth.
[12]
OR
5 (a) Explain what is meant by protectionism and consider the effectiveness of using tariffs as a
method of protectionism.
[8]
(b) Assess whether free trade is always better than a policy of protectionism for a developing
economy that wishes to trade internationally.
[12]
9708/23/M/J/24
EITHER
4 (a) With the help of a diagram, explain how increases in aggregate demand affect the level of real
output and the price level in an economy and consider when such increases may become a
problem.
[8]
(b) Assess whether increases in aggregate demand are the best way of reducing unemployment
in a high-income country.
[12]
OR
5 (a) Explain two possible causes of a change in the terms of trade in an economy and consider
which of these causes is likely to be more important for low-income countries.
[8]
(b) Assess the extent to which different tools of protection can impact on the terms of trade in an
economy.
[12]
