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Edexcel IGCSE Economics 2.1.3 Relationships Between Objectives and Policies Questions

Use policy-trade-off questions to connect lower unemployment, environmental restrictions and inflation with gains and costs for the economy.

Syllabus
First assessment 2019
Course
Economics 4EC1

Exam points

  • Explain how lower unemployment can raise spending and demand-pull inflation.
  • State or analyse trade-offs between inflation, growth, unemployment and the current account.
  • Apply growth versus environmental protection trade-offs to restrictions on firms.

Covered syllabus points

2.1.3.a Macroeconomic policy trade-offs

Question 1

[Maximum number: 6]

GDP per capita is a measure of a country's economic output that accounts for population. Figure 4 shows the population and gross domestic product (GDP) for

Vietnam in 2016.

Figure 4

Figure 4

The unemployment rate fell in Vietnam between 2015 and 2016 but in the same period the inflation rate increased.

Analyse how a fall in unemployment may have caused an increase in Vietnam's inflation rate.

Question 2

[Maximum number: 3]

In China there are restrictions on coal consumption and emissions from factories. These restrictions have led to job losses in some industries.

Explain one reason why there might be a trade-off between economic growth and environmental protection for an economy such as China.

Question 3

[Maximum number: 1]

State one possible trade-off with inflation.

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