In Tunisia, decisions about resource allocation are taken by both the public sector and the private sector. Tunisia’s GDP rose between 2014 and 2018, yet households saved less. Income levels can be influenced by changes in trade union activity and in the foreign exchange rate. From 2014 to 2018, Tunisia saw several strikes arranged by its biggest trade union, the Tunisian General Labour Union. Its foreign exchange rate also fell sharply.
(a)[2]
Identify any two of the three resource-allocation decisions.
(b)[4]
Explain two reasons why households may save less even though their income has risen.
(c)[6]
Analyse the ways in which a trade union may benefit its members.
(d)[8]
Discuss whether a fall in its foreign exchange rate will or will not improve a country’s macroeconomic performance.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Which goods to produce” …