During 2020, the price of gold declined in Vietnam. In that year, Vietnam was among Asia’s strongest-performing economies. In contrast with some other Asian economies, Vietnam did not go into recession. Total output, exports and imports all rose. Unemployment did rise from 2.0% to 2.3% but it still stayed very low. One possible aim of fiscal policy is to reach full employment.
(a)[2]
Identify how a demand curve for gold would illustrate a fall in the price of gold.
(b)[4]
Explain two drawbacks of a recession.
(c)[6]
Analyse why a country may buy more imports.
(d)[8]
Discuss whether fiscal policy is able to achieve full employment.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Movement downward / along the demand curve” …