Economics
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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
GCE Advanced Subsidiary Level and GCE Advanced Level
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MARK SCHEME for the October/November 2007 question paper
9708 ECONOMICS
9708/02 Paper 2 (Data Response and Essay (Core)), maximum raw mark 40
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began. All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated. Mark schemes must be read in conjunction with the question papers and the report on the examination.
•
CIE will not enter into discussions or correspondence in connection with these mark schemes.
CIE is publishing the mark schemes for the October/November 2007 question papers for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.
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Mark Scheme GCE A/AS LEVEL – October/November 2007
Syllabus 9708
Paper 02
(a) (i) Summarise the performance of the US current account balance between 1980 and 2002. [2] Mostly in deficit (1), only 3 surplus years (1), cyclical/volatile pattern (1), detail of cycle (1), any 2 points. (ii) Explain how the US might have been able to finance the current account position it faced between 1992 and 2002. [3] A worsening deficit needs extra funds (1), can come from capital, financial inflows (1), borrowing (1), use of reserves (1) – recognition of position (1), explanation of sources (2). (b) Suppose a country has a surplus on its current account. Explain how this may affect its exchange rate. [3] Fall in supply of domestic currency to buy imports (1), rise in demand for
UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
GCE Advanced Subsidiary Level and GCE Advanced Level
e ap .c rs om
MARK SCHEME for the October/November 2007 question paper
9708 ECONOMICS
9708/02 Paper 2 (Data Response and Essay (Core)), maximum raw mark 40
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began. All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated. Mark schemes must be read in conjunction with the question papers and the report on the examination.
•
CIE will not enter into discussions or correspondence in connection with these mark schemes.
CIE is publishing the mark schemes for the October/November 2007 question papers for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.
Page 2 1
Mark Scheme GCE A/AS LEVEL – October/November 2007
Syllabus 9708
Paper 02
(a) (i) Summarise the performance of the US current account balance between 1980 and 2002. [2] Mostly in deficit (1), only 3 surplus years (1), cyclical/volatile pattern (1), detail of cycle (1), any 2 points. (ii) Explain how the US might have been able to finance the current account position it faced between 1992 and 2002. [3] A worsening deficit needs extra funds (1), can come from capital, financial inflows (1), borrowing (1), use of reserves (1) – recognition of position (1), explanation of sources (2). (b) Suppose a country has a surplus on its current account. Explain how this may affect its exchange rate. [3] Fall in supply of domestic currency to buy imports (1), rise in demand for