(5.) Economics Hl. Paper 2, Techniques.

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(J-curve effect)

If you forget to mention both the J-curve effect and the Marshall-Lerner condition and fluff about other stuff, you can earn 6 marks. This implies that even though you may have provided some incorrect or irrelevant information, you can still receive partial credit for the remaining aspects of the question.

A depreciation of a country's exchange rate may not always lead to an improvement in its current account of the balance of payments because it can have various effects on the economy. While a depreciation can make a country's exports cheaper and more competitive, it can also make imports more expensive, leading to a higher import bill. Additionally, a depreciation can also increase the cost of servicing foreign debt, which can negatively impact the current account. Therefore, the relationship between exchange rate depreciation and the current account is complex and depends on various factors such as the elasticity of demand for exports and imports, the composition of a country's exports and imports, and the level of foreign debt.

The correct answer suggests that the best way to use the 60 minutes is by selecting three questions and allocating 20 minutes to each question. This approach allows for equal time distribution among the questions, ensuring that each question receives sufficient attention and effort. By dividing the time equally, you can demonstrate your knowledge and understanding of multiple topics, rather than focusing solely on one question.

If you choose a point inside the curve you are not only illustrating that there is a choice of producing more of the manufacturing good and less of the agricultural good (or vice versa), but also the potential of producing more of both goods simultaneously. That would be to complicate the illustration, thus choose a point along the curve

To earn full marks, the answer should include an accurate diagram and explanation of the equilibrium price. Additionally, it should provide a detailed discussion of two consequences that may result from the organizers setting ticket prices below the equilibrium price. This demonstrates a thorough understanding of the topic and the ability to analyze the situation from multiple perspectives.

Moving from a point inside the production possibility curve (PPF) to the actual curve does not involve opportunity costs. The PPF represents the maximum combination of goods or services that can be produced given the available resources and technology. Points inside the curve indicate that resources are not fully utilized, meaning there is potential for more production without sacrificing other goods. Therefore, moving from a point inside the curve to the actual curve does not require giving up any alternative goods, and thus, there is no opportunity cost involved.

Remember that "demand-side consequence" and "supply-side consequence" is just a way of saying "change in aggregate demand" and "change in aggregate supply".

Let's just say, always try and answer the full question.