Section 4 Review Questions
1. (a) Explain three factors which might cause the value of a currency to appreciate.
(10)
(b) Evaluate the possible effects of such an appreciation on an economy.
(15)
(Total 25 marks)
2. Discuss the possible causes and consequences of a persistent deficit balance in a country’s current account.
(Total 25 marks)
3. (a) Explain why a country’s balance of payments on current account may at times be in deficit and at other times be in surplus.
(12)
(b) To what extent does the existence of a current account deficit represent an economic problem?
(13)
(Total 25 marks)
4. (a) Describe three possible economic consequences of a persistent current account deficit for a country.
(10)
(b) Evaluate different methods of correcting a current account deficit.
(15)
(Total 25 marks)
Review Activity:
Activities:
In small group you will prepare a presentation of the essential information to be covered in each of the possible extended essay questions.
Suggested Outline:
Slide 1: The questions with the key words underlined
Slide 2 : An identification of what the demands of the questions are. What do they want from you. What will you have to do to get the best possible mark?
Slide 3-5 : Outline the definitions and main points to be covered of section (a)
Slide 6: What diagram/s will support your answer?
Slide 7: Which of the CRAMPSS will you use to evaluate in (b).
Slide 8-10 What are the key points to make
Causes and Consequences
Reliability and Validity of Data
Alternative Explanations
Macroeconomic goals
Pros and Cons
Short and Long Term
Stakeholders
