Economics · 2013 · May · Paper 2 · SL · Question paper

M13/3/ECONO/SP2/ENG/TZ0/XX ECONOMICS STANDARD lE vEl PAPER 2 Friday 3 May 2013 (morning) INSTRUCTIONS TO CaNdIda TES  d o not open this examination paper until instructed to do so.  You are not permitted access to any calculator for this paper.  Section a: answer one question.  Section B: answer one question.  Use fully labelled diagrams and references to the text/data where appropriate.  The maximum mark for this examination paper is [40 marks]. 1 hour 30 minutes 2213-5113 9 pages © International Baccalaureate Organization 2013 2213511 3 M13/3/ECONO/SP2/ENG/TZ0/XX 2213-5113 – 2 – SECTION A Answer one question from this section. 1. Study the extract below and answer the questions that follow. Boom or bust  The freely floating Australian dollar has been appreciating, creating winners and losers. Australian tourists overseas are getting bargain hotel rooms while some local exporters are suffering huge falls in demand. The appreciation of the Australian dollar gives a good reason to foreign students not to study in Australia. But as the Australian dollar continues to gain strength it seems that the economy is coping with the appreciating currency better than many economists expected.  Australia’s exports are dominated by minerals, energy and agricultural products, and all are enjoying record prices. Continued strong demand means that the exporters of these products have not needed to look for other markets. For example, coal and iron ore prices have more than doubled in the last two years, these commodity prices rising even more quickly than the appreciating currency.  The Australian dollar is only one factor affecting exporters, and at the moment the strong economic growth of the Asian economies is adding to the increasing demand for Australian commodities.  However, not everyone in Australia is happy. Service industries have not enjoyed an increase in the price of their output, nor have they enjoyed booming foreign demand. The problems with the appreciating Australian dollar are most evident in the fact that fewer students and tourists are coming to Australia. Manufacturers have a similar problem and are suffering from the results