CIE IGCSE Topical Past Paper 4.1 Economics The role of government
CIE IGCSE Topical Past Paper 2
4.1 The role of government
In
2020, wages paid to Mexican workers, including those in the primary
sector, fell. This fall contributed to a 9% rise in poverty in the
country. In the same year, many small and medium-sized firms closed
down. The country also suffered from traffic congestion. Its capital,
Mexico City, is the world’s most congested city.
d) Discuss whether or not a government should encourage people to walk to school and work. [8]
Some
firms in Monaco have experienced external growth. Firms in Monaco pay
high wages. Workers in Monaco benefit from fiscal policy which
contributes to high employment. Their government does impose VAT on
food, including fruit. Some economists have suggested that instead of
taxing fruit, governments should provide free fruit to consumers.
d) Discuss whether or not a government should provide free fruit to consumers. [8]
One
reason why the price of houses in cities such as Hong Kong, London, and
New York is very high, is the low price elasticity of supply of houses.
Trade unions in some of these cities are calling for more affordable
housing for workers. Governments are also trying to implement various
microeconomic policy measures to reduce the price of houses. In
addition, the stability of the housing market can impact upon the
effectiveness of monetary policy.
b) Explain two microeconomic policy measures that can be taken by a government to reduce the price of a product. [4]
A
third of the world’s ski resorts are located in the Alps. Prices for
holidays in the Alps are relatively higher than in other regions. The
recent pandemic, however, reduced the revenues of many large and small
firms in the tourism industry in the winter season of 2020/2021. Many
blamed strict government regulations for this. However, government
intervention also helped many firms to survive.
d) Discuss whether or not government intervention is beneficial for firms. [8]
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.
c) Analyse the causes of an increase in a government’s tax revenue. [6]
Trade
union membership is much higher in Sweden than in most countries. In
2019, 70% of Swedish workers were members of a trade union. More than
85% of Swedish workers are employed in the tertiary sector, compared
with only 2% in the primary sector. Swedish workers spend their incomes
on a variety of products some of which, e.g. sweets, are demerit goods.
Sweden has the 7th highest per head consumption of sweets in the world.
b) Explain two ways a government could decrease the consumption of demerit goods. [4]
Botswana’s
net migration varies. In 2019, Botswana had net immigration. Since
2010, its unemployment rate has averaged 18%. Between 2010 and 2019, the
number of women in the labour force increased from 380000 to 490000.
Although Botswana is one of Africa’s richer countries, its households do
not save much of their income.
d) Discuss whether or not a government should encourage an increase in saving. [8]
In
Nagicho, a small town in Japan, a woman on average has 2.8 children in
her lifetime. In Japan as a whole, a woman on average only has 1.4
children in her lifetime. Nagicho’s higher birth rate is partly the
result of a lower cost of living for families, as the prices of basic
items are lower in Nagicho than in the rest of Japan. The local
government not only offers housing at subsidised rates, to get more
labour into the area, but also tries to get more investment into the
town.
a) State two functions of local government. [2]
The
economic problem results in people having to make choices. In Bulgaria,
in recent years, people have changed how much they spend. The Bulgarian
government is encouraging people to spend more. It is trying to ensure
that deflation does not return and that the country will continue to
experience an increase in output.
a) Identify two ways a government could encourage people to spend more. [2]
Trade
union membership is much higher in Sweden than in most countries. In
2019, 70% of Swedish workers were members of a trade union. More than
85% of Swedish workers are employed in the tertiary sector, compared
with only 2% in the primary sector. Swedish workers spend their incomes
on a variety of products some of which, e.g. sweets, are demerit goods.
Sweden has the 7th highest per head consumption of sweets in the world.
b) Explain two ways a government could decrease the consumption of demerit goods. [4]
Botswana’s
net migration varies. In 2019, Botswana had net immigration. Since
2010, its unemployment rate has averaged 18%. Between 2010 and 2019, the
number of women in the labour force increased from 380000 to 490000.
Although Botswana is one of Africa’s richer countries, its households do
not save much of their income.
d) Discuss whether or not a government should encourage an increase in saving. [8]
In
Nagicho, a small town in Japan, a woman on average has 2.8 children in
her lifetime. In Japan as a whole, a woman on average only has 1.4
children in her lifetime. Nagicho’s higher birth rate is partly the
result of a lower cost of living for families, as the prices of basic
items are lower in Nagicho than in the rest of Japan. The local
government not only offers housing at subsidised rates, to get more
labour into the area, but also tries to get more investment into the
town.
b) State two functions of local government. [2]
The
economic problem results in people having to make choices. In Bulgaria,
in recent years, people have changed how much they spend. The Bulgarian
government is encouraging people to spend more. It is trying to ensure
that deflation does not return and that the country will continue to
experience an increase in output.
a) Identify two ways a government could encourage people to spend more. [2]
