Economics 0455 · IGCSE · Current account of balance of payments
Current account of balance of payments — practice question
The Canadian government has put in place several policy measures to encourage more women to join the labour force. Canada’s labour force has shrunk as the population has aged. The numbers of workers and their output are affected by movements in the country’s foreign exchange rate and by consumer expenditure. In 2018, the Canadian dollar lost value while Canadian consumer expenditure rose.
(a)[2]
Define the labour force in economics.
(b)[4]
Explain two reasons for an ageing population.
(c)[6]
Analyse how a fall in the value of a country’s foreign exchange rate could lower a deficit on the current account of its balance of payments.
(d)[8]
Discuss whether an economy will, or will not, gain from a rise in consumer expenditure.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “People who are economically active.” …