CIE A Level Topical Past Paper 2

9.2 Economic growth and sustainability

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In many countries increased government spending is regarded as a cause of economic growth. It is sensible, therefore, for a government to spend more to increase economic growth as it is good for its country.

To what extent do you agree with this argument? [20]

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With the help of a diagram, assess the effectiveness of using fiscal policy to close a negative output gap in an economy [20]

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Explain how governments measure economic growth and discuss why this measurement is important. [12]

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A government allows the merger of two large firms in the same industry.

With the help of a diagram, evaluate the view that this merger should not have been allowed. [20]

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Explain what is meant by infrastructure and consider the view that an increase in investment in infrastructure will promote an increase in both actual and potential economic growth. [12]