Economics Paper 2 November 2010

1. Athe ratio of a country's export price index to its import price index, multiplied by 100.
2. Bthe total monetary value of a country's exports minus the total monetary value of its imports for a given period.
3. Cthe exchange rate at which a country's currency trades against its major trading partners' currencies.
4. Dthe physical volume of goods and services a country exports compared with the volume it imports in a year.

1. AIndian and Chinese growth raised global interest rates, increasing the cost of Africa's imported capital goods.
2. BIndian and Chinese growth reduced demand for African clothing and textile exports in international markets.
3. CIndian and Chinese growth reduced the price of raw materials, lowering the value of Africa's raw material exports.
4. DIndian and Chinese growth raised the price of raw materials, which form a large share of Africa's export earnings.

1. Aa normal good, since demand for it rises steadily as household incomes across Mexico increase.
2. Ba luxury good, since its consumption is concentrated among wealthier households seeking dietary variety.
3. Can inferior good, since poorer households consume it heavily and cut back once it becomes unaffordable.
4. Da Giffen good, since consumers purchase more of it every time its price rises, irrespective of income levels.

Answer this when you sit the paper.

1. ASpeculation and hoarding of maize by monopolistic importers, restricting supply.
2. BA sharp rise in the minimum wage, which increased consumer demand for tortilla nationwide.
3. CA government decision to remove subsidies previously paid to tortilla producers.
4. DA decline in Mexican maize production caused by prolonged drought across farming regions.

1. ASubsidising ethanol production to redirect maize supplies away from fuel use entirely.
2. BMonitoring tortilla producers and imposing sanctions on those found speculating on prices.
3. CIntroducing a nationwide price freeze on all maize-based food products sold in local shops.
4. DNationalising the largest maize import and distribution companies operating in Mexico.