M14/3/ECONO/SP2/ENG/TZ0/XX

22145113

ECONOMICS
STANDARD LEVEL
PAPER 2
Tuesday 6 May 2014 (morning)
1 hour 30 minutes
INSTRUCTIONS TO CANDIDATES
 not open this examination paper until instructed to do so.
Do
 are not permitted access to any calculator for this paper.
You

Section A: answer one question.

Section B: answer one question.
 fully labelled diagrams and references to the text/data where appropriate.
Use
 maximum mark for this examination paper is [40 marks].
The

2214-5113

9 pages
© International Baccalaureate Organization 2014

M14/3/ECONO/SP2/ENG/TZ0/XX

–2–
SECTION A
Answer one question from this section.
1.

Study the extract below and answer the questions that follow.
Japan …show more content…

(ii)
Describe two responsibilities of a country’s central bank (paragraph ).

(b) With reference to the text, explain how Japan’s current account can be in surplus while it has a trade in goods deficit (paragraph ).

(c)

[2 marks]
[2 marks]
[4 marks]

Using an exchange rate diagram, explain how Japanese authorities might intervene in the currency market as a result of their concern about the value of the Japanese yen (paragraph ).

[4 marks]

(d) Using information from the text/data and your knowledge of economics, discuss the possible consequences of the appreciation of the Japanese yen
(paragraph ).

[8 marks]

2214-5113

Turn over

M14/3/ECONO/SP2/ENG/TZ0/XX

–4–
2.

Study the extract below and answer the questions that follow.
Text removed for copyright reasons
[Source: http://www.theage.com.au/national/car-makers-plead-for-help-20111207-1ojc3.html]

(This question continues on the following page)

2214-5113

–5–

M14/3/ECONO/SP2/ENG/TZ0/XX

(Question 2 continued)

(a)

(i)

Define the term currency appreciation indicated in bold in the text
(paragraph ).

(ii) Define the term subsidies indicated in bold in the text (paragraph ).

[2 marks]
[2 marks]

(b) a demand and supply diagram, explain the impact of the “recent currency