Increase foreign reserves must mean that Chinese authorities are selling Yuan increase SS of Yuan in FX market and purchasing foreign exchange increase DD for FX over the years to exert downward pressure on the value of the Yuan. Good answers should examine the limitations of the measures used and show some knowledge of government failure as well. In fact from to Sep , it rose only by 4. This would result in privatised energy firms focusing on profit maximisation objective. Extent of increase in demand for electricity due to price changes identified in case material is likely to be greater in long term as electricity consumers may be tied to contracts and unable to respond to price changes. The underlying policy therefore seems to be: Increasingly we import labour intensive lower added value products as our own labour force focuses on high value added arising from human capital.

Extent of increase in demand for electricity due to price changes identified in case material is likely to be greater in long term as electricity consumers may be tied to contracts and unable to respond to price changes. Also, the Indian whisky industry need not necessarily collapse if the tariffs are removed since it could still compete on non-price level. Thus, the protection measure by India is not economically justified. The answer should focus on how each of the macroeconomic policy may or may not encourage economic growth both actual and potential. Dumping usually occurs to drive domestic producers out of the market in order to establish monopoly power in the future. However, fears of traditional industries declining job losses are real problems but this could be managed with improvement in the countries institutions and appropriate govt policy e. The aim is to prevent the whisky industry from collapsing last line of extract 6.

h2 econs 2008 case study

General Trend and refinement: A Level – Paper Moreover, Extract 1 also showed that the steep price increases of natural gas resulted in users switching to electricity.


Oligopolistic markets enjoy market power. Besides casing BOP problems for USA and countries in the EU, rising value of imports which exceed exports will cause rising unemployment in these countries structural unemployment. Creation of Energywatch to represent the interest of consumers also limits the ability of energy firms to monopoly price, hence improving allocative efficiency.

Answers to H2 Economics GCE a Level Exam

Alongside entrept port activity which made economic sense explain policy initially favoured import substitution to 65 backed by tariffs and quotas. Different economies due to their different nature of the economy and constraints will require a different policy mix to encourage both actual and potential growth. Introduction – A brief explanation of how market forces can achieve allocative efficiency – Highlight the right assumptions for the price mechanism to work well – The equilibrium outcome of the perfect market would meet the conditions required ie.

Which raises the question is this a good idea? If China is indeed dumping, then action to prevent dumping will be justified as it protects EU consumers in the LR where dase dumping had succeeded in increasing Chinese producer power in the EU market. To manipulate the current account the S’pore government by and large does not use:.

2008 A-Levels H2 Economics Case Study

Competition helps to reduce market power of individual energy firms. Downloads, PC, hard drive. The growing doubt is not well founded. Interests of consumers sfudy not met given the under-utilization of facilities and high market power present in the fuel market. Assess how the markets involved might be affected by these developments.

Protectionism is justified in terms of economic theory. While explaining how the various policies may encourage actual and potential growth, the answer should also address potential limitations of the various policies and also the constraints of the nature of the economy.


Question focuses on 1. This explains why countries like Spore do not rely on traditional FP to pump-prime the economy in a recession although it is used. As the Asian economies grow, theyll be importing more from the West.


We export tourism to Australia and import it from Australia, but the exports and imports are clearly very different, and so are logically determined by exploitation of mutually advantageous trade opportunities.

PED of electricity is negative Law of Demand?

h2 econs 2008 case study

Prior to that, it was on a fixed forex system as evident by the fixed forex rate seen in table 4 from to Impact of developments in modern technology on recorded music and associated products will depend on the relationship whether substitutes or complements ie direction of DD changes and their closeness the extent of DD shift. Price rigidity can be a feature of oligopolistic markets. Q2 Firms pricing and output decisions depend on barriers to entry and the behavior of competitors a Explain why barriers to entry are a key determinant in firms pricing decisions.

The answer should focus on how each of the macroeconomic policy may or caxe not encourage economic growth both actual and potential. China will have C.

h2 econs 2008 case study

Establish what is meant by globalisation: Industry may be dynamically efficient due to the abilities of firms to make long run supernormal profits. Develop CA in areas of higher value added to tap into growing world incomes and to avoid goods such as those primary products exported by many developing countries where prices are volatile. Implications of developments in modern technology like faster broadband internet connections on entry barriers and market structure: Body There is a need to contrast between stuudy market exons with strong barriers to entry versus one with low or no barriers to entry and how they affect prices.