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IGCSE Economics 0455 May June 2024 Paper 2, Variant 1 – Sample Answers and Examiner Commentary – Question 5

Question:

5 In 2020, the price of gold fell in Vietnam. That year, Vietnam was one of Asia’s best performing
economies. Unlike some Asian economies, Vietnam did not experience a recession. Its total output, exports and imports all increased. Unemployment did increase from 2.0% to 2.3% but
remained very low. One of the aims of fiscal policy can be to achieve full employment.
(a) Identify how the effect of a fall in the price of gold would be shown on a demand curve for
gold. [2]
(b) Explain two disadvantages of a recession. [4]
(c) Analyse why a country may demand more imports. [6]
(d) Discuss whether or not fiscal policy can achieve full employment. [8]

Sample Answers: