HWA CHONG INSTITUTION

College 2 Preliminary Examination 2009

General Certificate of Education Advanced Level

Higher 2

ECONOMICS

9732/02

PAPER 2 Essay Questions

14 September 2009

Additional Materials: Answer Paper

2 hours 15 minutes

READ THESE INSTRUCTIONS FIRST

Write your name and CT on all the work you hand in.
Write in dark blue or black pen on both sides of the paper.
You may use a soft pencil for any diagrams, graphs or rough working.
Do not use staples, paper clips, highlighters, glue or correction fluid and tape.
Answer three questions in total, of which one must be from Section A, one from Section B and one from
either Section A or Section B.
At the end of the examination, fasten all your work securely together with the cover page provided.
The number of marks is given in brackets [ ] at the end of each question or part question.

This document consists of 2 printed pages

HWA CHONG INSTITUTION

[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)

Explain the likely causes of unemployment and inflation in Singapore.

[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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HCI Preliminary Exam 2009

9732/02/S/09