0455 Economics November 2025 Question Paper 22

1 (a) Calculate foreign workers as a percentage of Japan’s labour force in 2022. [1]

(b) Identify two reasons why Japan has a high average age of population. [2]

(c) Explain why some young Japanese people emigrate. [2]

(d) Explain two ways Japan could attract more foreign workers. [4]

(e) Draw a demand and supply diagram to show the effect of a decrease in population on the market for furniture. [4]

(f) Analyse the relationship between global GDP per head and global air passenger numbers.

[5]

(g) Discuss whether or not a high savings rate is likely to benefit Japan. [6]

(h) Discuss whether or not labour mobility in Japan is likely to increase in the future. [6] Section B Answer any three questions. Each question is introduced by stimulus material. In your answer you may refer to this material and/or to other examples that you have studied.

2 Some markets in Belgium are in equilibrium. The country produces a wide range of goods and services with different degrees of price elasticity of demand. The Belgian Government wants the economy to move to a production possibility point beyond its current production possibility curve (PPC). Belgium’s scientific industry is one industry which is doing well. Workers in this industry are highly specialised.

(a) Define market equilibrium. [2]

(b) Explain two ways an economy could reach a point outside its current PPC. [4]

(c) Analyse how price elasticity of demand can influence a firm’s pricing decisions. [6]

(d) Discuss whether or not firms benefit from their workers undertaking training. [8]

3 In April 2023, a French cosmetics firm merged with an Australian cosmetics firm. It is expected the merger will lower average total cost as the new firm is likely to benefit from greater internal economies of scale. A manager stated that a key aim is to make the firm’s production more sustainable by using raw materials taken from renewable sources. In most countries, the cosmetics firm’s products, including perfume, are taxed at a higher rate than food.

(a) Define average total cost. [2]

(b) Explain how using renewable raw materials may affect a firm’s profits. [4]

(c) Analyse the internal economies of scale that a cosmetics firm could experience. [6]

(d) Discuss whether or not perfume should be taxed at a higher rate than food. [8]

4 There are several policy measures a central bank or government can use to reduce unemployment. One policy measure a government could use to reduce unemployment is to increase its spending on building houses. The Federal Reserve, the central bank of the US, has two main aims. One is to maintain price stability and the other is to achieve full employment. Some central banks also have economic growth as a target, but none have HDI value as a target.

(a) Identify two policy measures a central bank could use to maintain price stability. [2]

(b) Explain two benefits to an economy of full employment. [4]

(c) Analyse how an increase in government spending on building houses could reduce unemployment. [6]

(d) Discuss whether or not an increase in a country’s economic growth rate will increase its HDI value. [8]

5 Some countries engage in dumping by selling their products at less than cost price in Cambodia. The Cambodian Government wants the country to become a high-income economy by 2050. It uses fiscal, monetary and supply-side policies to increase its economic growth rate. Cambodia subsidises some infant industries. The country has one of the world’s largest deficits on the current account of its balance of payments (as a percentage of GDP). Some economists suggest cutting taxes would reduce this deficit.

(a) Identify two motives for a firm dumping some of its products in a foreign market. [2]

(b) Explain two differences between monetary policy and supply-side policy. [4]

(c) Analyse how a government subsidy could help to protect an infant industry against foreign competition. [6]

(d) Discuss whether or not cuts in taxes will reduce a deficit on the current account of a country’s balance of payments. [8]