经济真题至15年11月

UNIVERSITYOFCAMBRIDGEINTERNATIONALEXAMINATIONS

General ofEducationAdvancedLevel

ECONOMICS 9708/41

Paper4DataResponseandEssay(Supplement) May/June20112hours15minutes

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SectionA

AnswerQuestion1.

SectionB

Answeranytwoquestions.

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SectionA

Answerthisquestion.

Hightaxesdonothelpinarecession

In2009,therewasaneconomicrecessioninmanycountries.Oneaspectoftherecessionwasthatunemploymentrose.ernmentspaidlargesubsidiestoanumberofindustriestotrytostoptheriseinunemployment.Thisincreasedtheernments’debtandaffecteditsotherexpenditure.

Inanattempttorecoverpartoftheextraexpenditure,someernmentshadaofincreasedetaxratesonpeoplewhohadhighsalaries.

However,criticsofthisarguethathighertaxratesdonotwork.Theysaythattheproportionofrevenuereceivedfromtoptaxpayersfallsanddoesnotriseastaxesincreaseandthehighertaxescausedamagingeffectsontheeconomy.Itisbettertheysaytodecreasetaxes.Thedecreaseintaxesbringstheernmentmorerevenue,notlessrevenue.TheiropinionissupportedbyevidencefromthepastasisseenintheeffectontaxreceiptsofchangingtaxratesintheUSasshowninFig.1.

FIG.1CUTTINGTAXESRAISESREVENUE

Top-rate etaxcuts Whatthetop1%paidintax

RonaldReagan

US :1981–1989

Proportionoftotaltaxrevenue

27.5%

30%

25

70%

28%

17.6%

1981

20

15

1988

(Source:TheTimes,May72009p.28.)

Itissuggestedthatthisoppositeofreducingtaxratesisbetter.Lowertaxratesactuallyboostboththeeconomyandtaxrevenues.Forexample,Russia,LatviaandEstoniareducedtheirhighesttaxrateandrecedacomplicatedsystemoftaxeswithasingle etaxrateof10%.Theyenjoyedahugeeconomicboostasaresult.

Anotheraspectoftherecessionwasthatbusinessesfounditdifficulttoborrowmoneyfromthecommercias.Inordertotryandmakeborrowingeasierandhelpbusinesses,somecentralbanksloweredtheirinterestrates.Thecentrasalsoboughternmentbondsinanattempttoincreasethesupplyofmoneyintheeconomy.

Exinwhatismeantbyarecession. [3]

Thearticlestatesthat‘highertaxratesdonotwork’.

Whatdoesthearticlemeanbythisstatement? [3]

Isthereenoughevidenceinthearticletojustifythisstatement? [6]

Discusswhytheactionsofthecentra smentionedinthearticlemighthavebeenexpectedtoeasetherecession. [8]

SectionB

Answertwoquestions.

Discusswhethereconomicefficiencycanbeimprovedifernmentsareinvolvedintheregulationandprovisionofgoodsandserviceswhenthereismarketfailure. [25]

(a)yse,withtheaidofadiagram,whetherthereisalinkbetweendiminishingmarginalreturnsandeconomiesofscale. [12]

(b)Discusswhethertheobjectivesofafirminaperfectlycompetitivemarketarelikelytobedifferentfromtheobjectivesofafirminanimperfectmarketstructure. [13]

Doyouagreethatthewageoflabourisdeterminedbythemarketlikeanyotherprice? [25]

(a)ExinwhatismeantbyGDPanddescribethealternativemethodsbywhichitiscalculated.

[12]

(b)‘GDPfigureslusmanythingceptthatwhiakeslifeworthwhile.Theylusnothingabouteducation,healthandqualityoflife.Theyare,therefore,oflittlevalue.’Discusstheextenttowhichyouagreewiththisargument. [13]

(a)ExinhowtheimpactoftheKeynesianmultiplierprocesswillchangeifa-marketclosedeconomy esamixedeconomywithforeigntrade. [12]

(b)ysehowachangetotheequilibriumlevelof eresultingfromthemultiplierprocessmightleadtounemploymentorinflation. [13]

Themainwayadevelocountrycould eadevelopedcountryisforernmenttoconcentrateontheprotectionofdomesticindustryandinvestmentininfrastructure.Doyouagreethatthisisthebest? [25]

BLANKPAGE

CopyrightAcknowledgments:

Question1 ©adaptedfromEamonnButler;It’sGCSEeconomics:hightaxesdon’twork;TheTimes;7May2009.

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