UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Advanced Level
.c rs om
ECONOMICS Paper 4 Data Response and Essays (Supplement) Additional Materials: * 3 2 7 9 8 8 3 0 9 5 *
October/November 2012 2 hours 15 minutes
READ THESE INSTRUCTIONS FIRST If you have been given an Answer Booklet, follow the instructions on the front cover of the Booklet. Write your Centre number, candidate number and name on all the work you hand in. Write in dark blue or black pen. You may use a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Section A Answer Question 1. Section B Answer any two questions. You may answer with reference to your own economy or other economies that you have studied where relevant to the question. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question.
This document consists of 4 printed pages.
DC (NF/CGW) 52329/5 © UCLES 2012
2 Section A Answer this question.
Budget deficits The recent world recession has resulted in an increased government budget deficit in many European countries. Fig. 1 shows budget deficits and economic growth rates for 2010 together with expected economic growth for 2011 for selected countries. Fig. 1 UK budget deficit % of GDP economic growth rates 2.1% 10.4% 1.2% 5.0% 2011 2010 1.2% 2010 1.6% budget deficit % of GDP Germany economic growth rates
budget deficit % of GDP
Portugal economic growth rates
Hungary economic budget growth rates deficit % of GDP
2.8% 8.0% 0.5% 2010 2010 0.7% 2011 2010 4.1% 0% 2010 2011
Below are two opinions about budget deficits. First opinion Budget deficits should be reduced quickly by immediate reductions in public spending. An economy needs to grow and...