IGCSE Economics Paper-2: Specimen Questions with Answers 36 - 37 of 100

Get top class preparation for Bank-PO right from your home: get questions, notes, tests, video lectures and more- for all subjects of Bank-PO.

Passage

In the recession that began in late 2007 in the United States, the first main element of GDP that faltered was the part of investment called residential structures. When housing prices started falling in 2006, new home construction slowed down. In 2008, this sector had shrunk by more than 40 % from where it had been just a few years earlier.

Question 36 (5 of 5 Based on Passage)

Edit

Write in Short

Short Answer▾

How important is investment?

Explanation

  • Productivity in a business is largely determined by the investment choices that had been made before you began to work.
  • The kind and quality of capital you had to work with strongly influenced your productivity. Capital is available due to the investment choices made by the business.
  • Investment adds to the nation՚s capital stock. An increase in capital shifts the aggregate production function outward, increases the demand for labor, and shifts the long-run aggregate supply curve to the right.
  • Investment therefore affects the economy՚s potential output and thus its standard of living eventually.
  • Investment is a component of aggregate demand. A change in investment will shift the aggregate demand leading to a change in real GDP and the prices in the short run.
  • An increase in investment shifts the aggregate demand curve to the right; a reduction shifts it to the left.

Passage

“Economic and social conditions are giving profession choosing criteria and should be in accordance with labor market providing and the youngers expectations and needs. Job stability, salary, company reputation, prospects for promotion or opportunity to practice as many jobs are currently most common criteria”

Question 37 (1 of 5 Based on Passage)

Edit

Write in Short

Short Answer▾

What are the factors affecting choice of occupation?

Explanation

The choice of occupation depends upon several factors such as individual՚s choice of job, their career, and what job is offering to them.

An individual choice of job is influenced by two factors which Wage factor and non-wage factor:

  • Wages: People are more likely to choose a higher paying job over low paying and this is what makes the occupation desirable.
  • Non-wage factors: Sometimes, people get also influenced by other factors too which are not money oriented such as:
    • Qualifications and skills required: Students and job seeker may also choose a job based on skills and qualification required. For example, a professor job is highly paid but it requires master՚s degree and even PhD qualification. Therefore, this only eliminates many people from becoming a professor and if people don՚t have these qualification and skills then they may choose another job.
    • Cultural expectations: Sometimes few jobs may be based on social and cultural factors. For example, a nurse in a hospital is mostly a woman; therefore, it eliminates men from this occupation.
    • Non-wage satisfaction from a job: Many people choose job only if they get sufficient wage. For example, a job like becoming a nurse may be low paid, but it can bring satisfaction to them who want to pursue this as a career.
Wage and Non-Wage Factors

Developed by: