Following are some samples of IGCSE Economics questions and answers. The download links for the pdfs are given below each solution and are free. More Solutions can be found in the members area.
Topic:1 Nature of economic problem:
Question 1 : Explain three reasons why inflation is regarded as a serious economic problem.
Answer: 1 Inflation is considered as a serious problem due to the following reasons. The cost of living is increased due to inflation. The people's condition becomes even more worse if the incomes do not rise as much as the prices, because the purchasing power of the people becomes less.People with fixed income are affected severely as compared to those people who atleast get some increase in their wages , each year. The lenders alos become more reluctant to lend money and this can reduce the extent of investments too.
Question 2:
Mexico, Indonesia, Nigeria and Turkey, known as the Mints, are four emerging economies that are predicted to grow rapidly. The four countries have relatively large populations, from 75 million in Turkey to 242 million in Indonesia in 2014. They also have high birth rates, from 17 in Turkey to 41.5 in Nigeria per 1000 people. Both income per head and the countries’ Human Development Index ranking are improving. The changes, however, do not mean that everyone in the four countries is satisfied. As incomes increase, so do people’s wants, and what people would like to consume exceeds the maximum output that countries are capable of producing.
Output and consumption are increasing in each of the four countries. Nigeria, for example, is predicted to be one of the world’s 20 largest economies by 2020. Productivity is rising in most sectors of the Nigerian economy although it remains low in agriculture. Despite some security concerns, more multinational companies are setting up in the country, attracted by its expanding markets.
Nigeria and Turkey both had annual inflation rates above 8% in 2014. Indonesia’s was 5.7% and Mexico’s 5.2%. The Mexican Government had used monetary policy measures in that year to keep the inflation rate down. In August 2014 it opened up its energy market, allowing private sector firms to compete against the country’s state-owned petroleum firm. It also increased spending on state-provided health care, which operates alongside private medical care.
The four countries saw fluctuations in their exchange rates in 2014. Indonesia’s currency, the rupiah, changed from 10 685 per US$ the year before to 11 450 per US$ in 2014. Turkey’s currency, the Turkish Lira, followed a similar trend.
Changes in the exchange rate can affect firms’ costs of production, as can industrial action. In June 2014 Turkish trade unions organised a number of strikes seeking to gain better wages and working conditions for their members. However, the power of Turkish trade unions is limited by restrictive trade union legislation and a small membership, with only 9% of workers belonging to trade unions. This means that collective bargaining is not a key feature of Turkish labour markets and Turkish trade unions do not have much influence on economic policy.
Using information from the extract, explain how the Mints illustrate the economic problem. [2]
Answer: 2 From the extract it is clear that What people would like to consume exceed the maximum output the countrie sare capable of producing .
Following are a few LMR Sheets -Last Mnute Revision Sheets for IGCSE Economics
1-The economic problem can never be solved.pdf
7-Factor of production-Enterprise features.pdf
6-Countrys factor of production and export.pdf
5-Difference between labour and enterprise.pdf
4-Do consumers benefit from horizontal mergers.pdf
3-Increase in bank lending can increase economic growth.pdf
2-Workers Specialising can reduce av. cost of production.pdf
Write a public review