9708A. 23 March

1. Which supply curve (S) indicates that eventually an individual will choose to spend more time on
leisure rather than continue working for increased wages?

2. When is a trade union less likely to gain a large pay rise for its workers?
A It represents a large proportion of the workforce in the company.
B It represents a workforce that has an elastic demand for its labour.
C It represents a workforce that is increasing its labour productivity.
D It represents a workforce that works for a highly profitable monopoly firm.

3. Which statement does not support the view that extraction of mineral resources by a foreign
company will make it more difficult for a developing economy to achieve future economic growth?
A Exports of these mineral resources will result in an appreciation of the exchange rate.
B Reduced tax rates aimed at encouraging the foreign company to invest in the country will
increase inflation.
C The foreign company will raise the skill levels of the local population through training
D The foreign company will send profits back to its own country.

4. Growth rates can be calculated using changes in the value of GDP from year to year.
Why is real GDP considered to be a better indicator than nominal GDP for this calculation?
A Real GDP adjusts for price changes by using a base year.
B Real GDP ignores the effects of fluctuations in exchange rates on purchasing power.
C Real GDP includes changes in the size of the population.
D Real GDP measures GDP at factor cost rather than market prices.

5. Why is disaster relief money sent by non-governmental organisations to a South American
country not classified as official foreign aid?
A It does not finance a long-term investment programme.
B It does not incur payment of interest.
C It is not supplied by a government.
D Only countries in Asia and Africa are classified as developing.


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