Documente Academic
Documente Profesional
Documente Cultură
Higher 2
ECONOMICS
9732/02
14 September 2009
2 hours 15 minutes
[Turn over
2
Answer three question total.
Section A
One or two of your three chosen questions must be from this section.
Prices of agricultural products increased by 14% in recent years, compared with only 3% for
manufactured goods.
(a)
Using economic analysis, account for the differences in prices of agricultural and manufactured
products.
[10]
(b) Discuss how the changes in the agricultural prices would affect the economies of exporting
countries and importing countries.
[15]
Explain what is meant by productive efficiency and allocative efficiency, and assess whether in
reality, it is in consumers interest when firms are both productive efficient and allocative efficient. [25]
Chinas rapid market reforms since 1978 had created a strong middle class and a burgeoning
industrial sector. However, many lower income earners, mired in a polluted environment especially in
the mining and industrial areas, are left behind economically.
(a)
Explain how income inequality and pollution are causes of market failure.
[10]
(b)
Discuss appropriate measures, if any, that the Chinese government could adopt to solve these
problems.
[15]
Section B
One or two of your three chosen questions must be from this section.
4
(a)
[10]
(b)
Discuss the extent to which demand-side policies could be adopted to address the problems of
inflation and unemployment in Singapore.
[15]
Explain the key determinants of household saving and discuss whether high household savings rates
are desirable for an economy.
[25]
(a) Explain the supply-side and trade policies the Singapore government could adopt to improve
global competitiveness.
[10]
(b) Discuss how pursuing global competitiveness could lead to conflicts in achieving Singapores
economic goals.
[15]
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9732/02/S/09