Question:

4 Many people from the Philippines work in another country, often in industries that provide merit
goods and public goods. In 2020, the Philippine government raised more tax revenue. Some was
spent on policy measures to increase life expectancy and some on policy measures to reduce
unemployment. The country’s unemployment rate was also affected by a rise in the country’s
foreign exchange rate.
(a) Identify two influences on which country a person decides to work in. [2]
(b) Explain, with examples, the difference between a merit good and a public good. [4]
(c) Analyse how an increase in government spending could increase life expectancy. [6]
(d) Discuss whether or not a rise in a country’s foreign exchange rate would benefit its economy.
[8]

Sample Answers: