CIE IGCSE Topical Past Paper 3.1 Economics Money and banking

CIE IGCSE Topical Past Paper 2

3.1 Money and banking  

 

 

0455/22/F/M/25

Finland is a high-income country that usually has a higher value of exports than imports. It has a strong commercial banking sector which has increased its lending in recent years. The country has an ageing population, with more than a quarter of its population aged over 65. In 2022, Finland’s Government had a budget deficit with government spending exceeding tax revenue.

b) Explain why commercial bank may increase their lending. [4] 

0455/22/M/J/24

Tajikistan is one of Asia’s low-income countries. Its currency, the somoni, has the key characteristics of money. More than one million Tajik people work abroad, mostly in Russia. In 2020, the Tajik government was concerned that the country’s economy might experience a recession which could cause a fall in tax revenue. Despite this possibility, some Tajik firms bought new capital equipment.

b) Explain two characteristics of money. [4] 

0455/21/M/J/24 

In recent years, the mobility of labour, the number of women in the labour force and GDP have increased in Bangladesh. In 2019, the central bank of Bangladesh approved three new commercial banks. In that year, women on average earned 77% of the pay of men in Bangladesh. The country’s economy experienced the world’s seventh highest economic growth rate, with an increase in GDP of 7.4%.

b) Explain two benefits that consumers may gain from having more commercial banks. [4]

0455/21/O/N/23 

Digital money, such as cryptocurrencies, is increasingly being used. Digital money transactions take place on electronic devices such as computers and smartphones. However, there can be market failure due to external costs arising from high energy usage of non‑renewable sources. One way of reducing external costs is to tax the product. 

b) Explain two functions of money. [4] 

0455/21/M/J/23

Living standards, including education, have improved for most people in South Africa in recent years. Most households have more money and the government has more tax revenue. There is, however, considerable income inequality. In 2020, 36% of the population were living in poverty. An increase in unemployment benefit payments might reduce this poverty.

a) Identify two functions of money. [2]

0455/22/M/J/23

In 2020, the largest Thai commercial bank merged with a smaller commercial Thai bank. It was expected that the merger would affect the price charged for bank services and the amount that would be lent. Thai commercial banks operate in the private sector. A growing private sector can move an economy towards a market economic system.

a) Identify two influences, other than price, on a customer’s choice of bank. [2]

0455/22/M/J/21 

The money supply in Bangladesh increased every year from 2010 to 2018. Changes in the money supply and the foreign exchange rate can affect a government’s macroeconomic policy aims, including full employment. There have been few mergers between commercial banks in Bangladesh, although its banks are larger than many of its other firms. 

a) Identify two functions of money. [2] 
b) Explain two reasons why commercial banks may want to merge.[4]

0455/23/O/N/20 

It was announced in November 2016 that 500 and 1000 rupee banknotes could no longer be used in shops in India. These were replaced by the central bank, an institution that makes extensive use of division of labour. In India, cash is still an important form of money used in economic transactions. The replacement of banknotes put pressure on banking staff and other workers in the tertiary sector, and affected the general price level. 

a) State two functions, other than issuing banknotes and coins, of a central bank. [2] 

0455/22/O/N/20 

Italy is home to the world’s oldest bank and some of the world’s oldest car producers. Internationally, both industries are facing a number of challenges. The wages of bank workers and car workers are increasing. Demand for bank loans and for cars is changing, in part, due to changes in population size. It is predicted that the price elasticity of demand (PED) for cars will also change in the future. 

a) State two functions of a commercial bank. [2] 

0455/22/M/J/20 

A number of countries are withdrawing high value banknotes. For instance, Singapore plans to stop issuing its $10000 note. High value notes were originally intended to act as a convenient store of value. Central banks are concerned some notes are now being used illegally. The Singapore Police Force and the Monetary Authority of Singapore (its central bank) were trying to recruit more workers in 2017. It was expected that the central bank would raise the rate of interest in 2018. 

a) State two functions of money, other than a store of value. [2] 
b) Explain two advantages banknotes have as a form of money. [4] 

0455/23/M/J/18 

In early 2016, the central bank of the Republic of Turkey cut interest rates five times. This was despite an inflation rate of 7.6%. The economy had a combination of a low saving rate and weak investment. To stimulate economic growth the Turkish government announced a package of reforms including subsidies for research and investment. 

a) Identify two functions of a central bank. [2] 

0455/22/M/J/18 

In February 2016, share prices on stock exchanges fell throughout the world. There were a number of reasons for this; including concerns about the slowdown in world growth, the possibility of deflation and unemployment, and fears that some commercial banks could go out of business. 

a) Define commercial bank. 
b) Explain how a stock exchange could encourage economic growth. [4]