Cambridge Past Paper Questions

Four countries, A, B, C and D, trade internationally. Each circle in the diagram represents a free trade area between the countries within the circ...

The diagram shows Greece’s trade position with the EU between 2005 and 2014. How does the Greek trade balance with the EU differ in 2014 compared t...

A central bank forecasts a rise in raw material costs. The government plans to increase spending on health and education. The initial equilibrium p...

A country with a floating exchange rate experiences a large surplus on the current account of its balance of payments. What is likely to decrease a...

In 2018 an investor in the United States (US) purchased shares in a German bank. In December 2018 the US investor was paid a dividend on these shar...

Which statement describes disinflation?

In a closed economy a rise in aggregate demand is needed to increase output in the country. What is necessary to achieve this increase in output in...

A country with a fixed exchange rate and a deficit in the current account of its balance of payments enters a recession. It devalues its currency i...

What is an example of fiscal policy aimed at increasing aggregate demand in an economy?

A country with a fixed exchange rate experiences a balance of payments surplus. Which policy measure will enable it to maintain its exchange rate?

An American family is choosing between four holiday destinations in Europe, each at the same price. The table shows the family's order of preferenc...

The diagram shows two production possibility curves for an economy. [diagram] Which combination of movements correctly illustrates these changes in...

What distinguishes the very long run from the long run?

Which statement is a positive statement?

What could not cause a shift in an individual's demand curve for good Z?

The diagram shows the market for sugar which is initially in equilibrium at a price of OP. [diagram] A government then fixes a maximum price of OP1...

The table shows a competitive market in equilibrium in two periods. period market price (cents) quantity traded 1 50 10000 2 60 12000 What could ex...

Which example of consumer behaviour would create consumer surplus?

A manufacturer reduces the price of its goods after developing a more efficient manufacturing process. It makes leather belts that compete against ...

What is the likely price elasticity of supply of highly perishable goods and goods that have low stocks? highly perishable goods goods that have lo...

The diagrams show the initial demand curve D₁ and supply curve S₁ for steel in the European Union (EU). In 2018 European steel firms experienced ri...

The market for wheat is in equilibrium at price P with supply at 40 million tonnes. Due to a drought in the growing season, supply falls to 20 mill...

What is used to calculate the price elasticity of demand?

After a series of poor harvests, a government imposes an effective maximum price on cereals. What would be a consequence of this policy?

What would be a transfer payment?

The government redistributes income by raising the top rate of income tax and using the money raised to finance additional benefits to students and...

A government wishes to increase the supply of houses. It pays a subsidy to brick manufacturers to increase supplies of bricks to S2. The diagram sh...

Why is national defence provided by the government?

Which statement about a rise in the general price level in a country is correct?

A country's terms of trade changed from 100 to 95. What is most likely to have caused this change?

A country replaces a floating exchange rate system with a managed floating exchange rate system. Which statement is correct?

What will be the immediate effect of a devaluation of an economy's foreign exchange rate?

A country has a deficit on the current account of its balance of payments. What might help the country to reduce its deficit?

The diagram shows the effect of removing a tariff on imports of good X into country Y. [diagram] What is the volume, in million units, of the extra...

Which item should be recorded in the financial account of a country's balance of payments?

The table shows a country's consumer prices index (CPI) for March and April 2018. CPI March 2018 151.3 April 2018 148.6 Which statement correctly d...

The diagram shows the rate of inflation over time in four countries. Which country has a rising real value of money over time? [diagram]

The table shows the consumer prices index (CPI) for an economy expressed as an index number. year CPI 2016 100 2017 103 2018 101 2019 97 Which acti...

Other things being equal, what is most likely to be reduced by falling labour productivity?

A government spends money building more schools. How might this be classified? fiscal policy supply-side policy monetary policy

A production possibility curve shows the combinations of outputs an economy can produce using all available resources. At which points on the diagr...

What is a normative economic action based on?

Which function of money overcomes the double coincidence of wants problem that exists in a barter system?

The production possibility curves (PPCs) show the abilities of four economies to produce wheat and rice. Which PPC has the lowest opportunity cost ...

The diagram shows a supply curve for chicken. What explains why the supply curve for chicken slopes upwards? [Figure 5]

The diagram shows the demand and supply curves for cars in India. The initial equilibrium is at X. What will be the new equilibrium if there is a s...

Demand curves are drawn ceteris paribus. Which 'other things' are not required to remain the same when an individual's demand curve for ice cream i...

What is the measure of cross-elasticity of demand for good X in terms of good Y?

When will the price mechanism be least likely to reallocate resources to meet a change in consumer preferences?

A firm estimates that the price elasticity of supply of its product is +1.5. What does this indicate?