Changes in tobacco production and consumption can have both microeconomic and macroeconomic effects. Tobacco plants are grown in at least 124 countries with different levels of development. A higher proportion of the poor than of the rich consume tobacco products. The market for cigarettes, produced using tobacco, is changing. Demand for cigarettes and some other demerit goods is declining in a number of countries.
Define microeconomics.
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2 marksChanges in tobacco production and consumption can have both microeconomic and macroeconomic effects. Tobacco plants are grown in at least 124 countries with different levels of development. A higher proportion of the poor than of the rich consume tobacco products. The market for cigarettes, produced using tobacco, is changing. Demand for cigarettes and some other demerit goods is declining in a number of countries.
Define macroeconomics
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2 marksIn 2019, France produced inside its production possibility curve (PPC). France exports a wide range of its products. It is the world’s top exporter of luxury perfume and the 7th largest exporter of soap. Changes in technology affect the products people produce and buy. The French government plans to upgrade its infrastructure for all households to have internet access
Identify two choices that consumers make as a decision maker in the microeconomy
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2 marksThe South Korean government thinks that Japan is dumping steel. South Korean firms trade with, and produce in, other countries. Some South Korean multinational companies (MNCs) claim to reduce poverty in their host countries. In 2019, South Korean firms were affected by a depreciation in South Korea’s foreign exchange rate. Some firms also experienced a shortage of workers,
which was influenced by the country’s very low birth rate
Identify two choices a MNC may make in the macroeconomy
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2 marksThere was a significant increase in the money supply in Angola in 2019. The National Bank of Angola was concerned that this would keep inflation above 17% and harm Angola’s producers. The Angolan government had concentrated on reducing unemployment, which had fallen from 10% in 2010 to 7% in 2019
Identify two aims of the government's main macroeconomy policy besides reducing unemployment
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8 marksChanges in tobacco production and consumption can have both microeconomic and macroeconomic effects. Tobacco plants are grown in at least 124 countries with different levels of development. A higher proportion of the poor than of the rich consume tobacco products. The market for cigarettes, produced using tobacco, is changing. Demand for cigarettes and some other demerit goods is declining in a number of countries.
Discuss whether microeconomics or macroeconomics is more essential for understanding how economies work
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8 marksIndia and Ecuador are two major producers of bananas. India is the world’s largest producer of bananas while Ecuador is the world’s largest exporter. Multinational companies (MNCs) produce some of the bananas in both countries. The World Health Organization (WHO) recommends that each person should eat 400 grams of fruit and vegetables a day. To encourage people to eat more fruit and vegetables governments may use policy measures such as maximum prices and subsidies.
Discuss whether or not the government have a more important role than firms in decision making in the economy
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4 marksChanges in tobacco production and consumption can have both microeconomic and macroeconomic effects. Tobacco plants are grown in at least 124 countries with different levels of development. A higher proportion of the poor than of the rich consume tobacco products. The market for cigarettes, produced using tobacco, is changing. Demand for cigarettes and some other demerit goods is declining in a number of countries.
Explain, giving examples, the difference between microeconomics and macroeconomics
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4 marksIndia and Ecuador are two major producers of bananas. India is the world’s largest producer of bananas while Ecuador is the world’s largest exporter. Multinational companies (MNCs) produce some of the bananas in both countries. The World Health Organization (WHO) recommends that each person should eat 400 grams of fruit and vegetables a day. To encourage people to eat more fruit and vegetables governments may use policy measures such as maximum prices and subsidies.
Explain two microeconomic choices a government may make with examples
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4 marksIndia and Ecuador are two major producers of bananas. India is the world’s largest producer of bananas while Ecuador is the world’s largest exporter. Multinational companies (MNCs) produce some of the bananas in both countries. The World Health Organization (WHO) recommends that each person should eat 400 grams of fruit and vegetables a day. To encourage people to eat more fruit and vegetables governments may use policy measures such as maximum prices and subsidies.
Explain two microeconomic choices a consumer may make with examples
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4 marksTanzania is a low-income country with relatively high import tariffs. Between 2012 and 2015, Tanzania experienced a high economic growth rate. This allowed the government to provide more public goods. The government also increased its investment in the merit goods of education and healthcare. Tanzania’s central bank influenced household borrowing and spending with the aim of achieving price stability. As a result the country’s inflation rate fell, with money losing less of its value.
Explain two types of government policy used to achieve the macroeconomic aims
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