In Tunisia, decisions about resource allocation are taken by both the public sector and the private sector. From 2014 to 2018, Tunisia’s GDP rose, yet households put aside less. Income levels can be influenced by shifts in trade union activity and the foreign exchange rate. Between 2014 and 2018, Tunisia saw several strikes organised 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 increased.
(c)[6]
Analyse how a trade union may benefit its members.
(d)[8]
Discuss whether a decline in its foreign exchange rate will 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: “What goods and services should be produced” …