Question:

5 New Zealand is a high-income country with a low unemployment rate and a surplus of imports

over exports. Recently, its government has made some important economic decisions. In 2022,

it banned everyone born after 2008 from buying cigarettes. A year before, it gave permission for

firms to explore for oil in the country.

(a) Define unemployment rate. [2]

(b) Explain two reasons why a government may discourage cigarette smoking. [4]

(c) Analyse why a country’s exports may decrease. [6]

(d) Discuss whether or not the discovery of oil in a country will benefit its economy. [8]

Sample Answers: