(a) "Barter' and 'money' are used as mediums of exchange. Money has a number of characteristics including the following: relatively scarce; portable and durable (i) Explain any two of the underlined terms. (ii) Outline the difficulty of using 'barter' as a medium of exchange. (iii) Explain two functions of money other than a "medium of exchange'. (b) The ECB decreased interest rates in 201 1 with the aim of increasing economic growth. (i) Explain the underlined term. (ii) What do the initials ECB stand for? (iii) State and explain two possible economic effects which an increase in economic growth may have on the Irish Economy. (c) One measure of price inflation is the CPI. (1) Explain the underlined term. (ii) What do the initials CPI stand for? (iii) Explain how a fall in the rate of price inflation may affect each of the following: Employees; People in receipt of social welfare; Business. Social welfare payments and student grants are examples of transfer payments. (i) Explain the underlined term. (ii) Explain why transfer payments are not included in National Income. (iii) State and explain two possible uses of National Income Statistics. (b) The Multiplier formula for an open economy is: MPS + MPM Assume that MPM is 0.2 and MPS is 0.3. (i) Explain each of the above underlined terms. (ii) Calculate, using the above formula, the size of the Multiplier. (Show all your workings.) (c) The Irish government is concerned about the size of the 'black economy'. (i) Explain the underlined term. (ii) State two examples of activities considered part of the black economy. (iii) State and explain two actions the Irish Government could take to discourage activities in the black economy.(a) The table below illustrates the Law of Comparative Advantage. Country Output Production per worker per week Wine Cars Germany 1600 litres 1200 units France 800 litres 400 units Total Output 2400 litres 1600 units Although Germany is more efficient in the production of both goods, according to the Law of Comparative Advantage each country will specialise in the production of one good. (i) Which good will Germany produce? Explain briefly. (ii) Which good will France produce? Explain briefly. (iii) If each country specialises in the good you have selected, calculate the resulting total output. (Show your workings.) (b) Irish people attending the Olympic Games in London 2012 is an example of an invisible import for Ireland. (i) Explain the underlined term and state one other example of an invisible import. (ii) Discuss three benefits to the Irish economy of increasing exports. (c) IDA Ireland has been successful in attracting investment in the form of multinational companies (MNCs) to Ireland. (i) Name two MNCs in Ireland. (ii) State and explain two reasons why MNCs are attracted to Ireland, (iii) Discuss two economic advantages to the Irish economy of MNCs locating here.(a) Explain any three of the following: Current Budget Deficit; Progressive Tax; . . . Nationalisation; Economic recession. (b) An increased rate of VAT, increased carbon taxes, and a new 6100 household charge were introduced in the 2012 Government Current Budget. (i) Explain each of the underlined taxes. (ii) Discuss one economic effect which these tax increases will have for each of the following: Households; Retailers in Ireland; . Government's Current Budget Deficit. (c) One of the functions of the NTMA is to manage Ireland's National Debt on behalf of the Government. (i) What do the initials NTMA stand for? (ii) Explain the underlined term. (iii) State and explain two economic disadvantages of Ireland's National Debt
