IB Economics Paper 1 Macro Past Paper Q 12.1 The level of overall economic activity 1.Economic activity a.Explain the impact that a cut in taxation and an increase in government spending might have on the circular flow of income. [N19/HP1/TZ0/3a] b.Discuss whether the real gross national income (GNI) per capita of a country is a good indicator of its standard of living. [N19/HP1/TZ0/3b] c.Discuss the view that, apart from indicating economic growth rates over time, national income statistics are of little use. [N18/HP1/TZ0/4b] d.Explain how an increase in leakages can affect the size of the circular flow of income. [N18/SP1/TZ0/4a] e.To what extent is the use of national income statistics an effective way of comparing standard of living between countries? [N18/SP1/TZ0/4b] f.With reference to the income, output and expenditure approaches, explain how the real gross national product (GNP) / gross national income (GNI) per capita of a country can be measured. [N17/SP1/TZ0/4a] g.Explain the effect of a rise in taxation and a fall in government expenditure on the circular flow of income of an economy. [M15/SP1/TZ1/3a] h.Explain the effect of a rise in saving and a fall in investment on the circular flow of income of an economy. [M15/SP1/TZ2/3a] i.Explain the income, output and expenditure methods used to measure real gross domestic product (GDP). [M14/SP1/TZ2/3a] j.Discuss the usefulness of real GDP per capita as a method of measuring the living standards of a country’s population. [M14/SP1/TZ2/3b] k.Explain how changes in the size of the circular flow depend on the relative size of injections and leakages. [N13/HP1/TZ0/3a]
