1. (a) Explain FOUR assumptions underlying the Law of Comparative Advantage.

(b) Ireland relies heavily on international trade.

Explain THREE factors which affect the competitiveness of Irish-based firms in international

trade. Use examples to support your answers.

(c) The enlargement of the European Union (EU) to include many new countries will be economically

significant for Ireland.

Outline the main economic opportunities and challenges for the Irish economy following

enlargement of the EU.

2. (a) Outline, using appropriate figures, how the Irish economy performed in the past twelve months

in each of the following areas:

(i) employment;

(ii) price inflation;

(iii) economic growth;

(iv) government spending.

(b) In recent years Ireland's National Debt as a percentage of Gross Domestic Product (GDP)

has declined.

Discuss the economic consequences of this development for the Irish Economy.

(c) (i) Outline the main sources of government revenue.

(ii) Discuss the economic consequences of a government policy to increase public service

charges (e.g. road tolls, bin charges, TV, licences) rather than raise tax levels for the Irish

economy.