1. (a) The economy in China is changing from a centrally planned economic system to a

mixed economic system.

(i) Explain each of the underlined terms.

(ii) State one other example of a centrally planned economic system and one other example

of a mixed economic system.

(iii) Outline one possible economic advantage for Chinese citizens of this change

towards a mixed economic system.

(b) Some Less Developed Countries (LDCs) experience difficulties in trying to achieve

economic growth.

(i) Explain the underlined term.

(ii) Outline two other economic difficulties which LDCs may experience.

(iii) Outline two measures which Irish citizens could take to help improve the standard of

living of citizens in LDCs.

(c) In recent years Ireland has been in recession and has experienced little or no economic growth.

(i) What is the name of the official measurement of the size of the economy?

(ii) Outline one benefit of economic growth to each of the following in the Irish economy:

Irish citizens;

Retailers;

Government finances.

2. (a) In Budget 2014 The Minister for Finance decided to retain the reduced 9% VAT rate in the

tourism sector and to remove the 3 Airport travel tax.

(i) Explain the term 'Value Added Tax'.

(ii) Are the taxes underlined above direct taxes or indirect taxes? Explain your answers.

(iii) Discuss two possible economic reasons why the Minister for Finance decided on the

above measures.

(b) The Budget 2014 is considered to be an 'austerity' budget. NOTE: 'Austerity' refers to

measures taken by the government to reduce government budget deficits.

(i) State two examples of austerity measures introduced by the Irish government in recent

years.

(ii) Outline two economic effects which austerity measures may have on Irish citizens.

(c) Outline one economic argument in favour of and one economic argument against

ANY TWO of the following government measures announced in Budget 2014:

A reduction in Jobseekers Allowance (i.e. dole payment) to 100 for unemployed

people under 25 years;

Increase in rate of Deposit Interest Retention Tax (DIRT) from 33% to 41%;

Increase in excise duty on tobacco (e.g. 10c increase on a packet of 20 cigarettes).

3. (a) Irish businesses face many challenges in attempting to control their costs.

(i) Define fixed cost and variable cost and state one example of each.

(ii) State and explain two reasons why it is important for a business to control its costs.

(b) Patrick Joy was named Entrepreneur of the Year in 2013. He is the founder of Suretank, a

Louth-based manufacturer of cargo-carrying units for the offshore oil and gas industry.

(i) Explain the underlined term.

(ii) Outline two reasons why entrepreneurs are essential for the Irish economy.

(iii) Outline two actions which the government could take to encourage entrepreneurship in

Ireland.

(c) Businesses need factors of production to produce output or provide a service.

(i) State and explain the three factors of production, other than enterprise.

(ii) Outline two economic factors which an entrepreneur should consider when choosing a

suitable location for his/her business in Ireland.

4. (a) Explain the following terms:

(i) Barter;

(ii) Money;

(iii) Price Inflation.

(b) In November 2013 the ECB reduced interest rates.

(i) What do the initials ECB represent?

(ii) Explain the underlined term.

(iii) Discuss three possible economic effects of a reduction in interest rates on the Irish

economy.

(c) A number of retail banks have shut down operations in Ireland in recent times and some credit

unions are in financial difficulty.

(i) Outline two functions of commercial/retail banks.

(ii) Outline two economic effects of the reduction in the number of banks on the Irish

economy.

(iii) Outline one reason why some credit unions are in financial difficulty