question:

7. (a) (i) Explain, with the aid of a diagram, the Circular Flow of Income for an open economy. (ii) Outline how each of the following should affect the level of National Income in Ireland: an increase in Irish exports an increase in the level of savings. (b) Discuss four factors which should be considered when comparing national income statistics from different countries. (c) The Central Bank of Ireland (CBI) raised its forecast for 2015 economic growth to 3.7% from 3.4% citing strong consumer and investment spending. (Central Bank Quarterly Bulletin: Q1 2015) (i) Define the term economic growth. (ii) Discuss possible costs and benefits of economic growth. 8. (a) "A Budget deficit stimulates the economy and therefore should be encouraged. " Discuss this statement with reference to the Irish economy. You may agree or disagree. (b) (i) Outline three policies the Irish Government could consider to achieve balanced regional development. (ii) Outline two economic benefits to rural communities of balanced regional development. (c) (i) Discuss the economic effects of emigration on the Irish economy. (ii) Advise the Government on two policy initiatives/measures that could be introduced in 'Budget 2016' to encourage emigrants to return to Ireland.6. (a) "Prices on average as measured by the Consumer Price Index (CPI) were 0. 1% higher in November 2014 compared with November 2013." (CSO statistics) (i) Do you consider the CPI an accurate measure of changes in the cost of living? Explain your answer. (ii) Discuss two possible economic effects of price deflation on the Irish economy. (b) Economists classify unemployment into different types. State and explain three types of unemployment. Outline one appropriate government policy response for each of two unemployment types that you have explained in part (i) above. (c) According to the Quarterly National Household Survey (ONHS) the rate of unemployment was 1 1.1% in the third quarter of 2014. (1) Name one other commonly used source of unemployment statistics in Ireland. (ii) State and explain the reasons for the differences between both sources. (iii) Outline the possible economic effects which a rise in the level of employment, due to economic recovery in Ireland, may have on the Government current finances