Section ARead the source material carefully before answering Question 1.Source material:Changes in US macroeconomic performance and policiesUS fact file2020Current account of the balance of payments-$470bnImports of goods and services$2800bnImports from China as of total imports20%Economic growth rate-2.8%Inflation rate1.4%Between 2009 and 2019,US real GDP increased every year.This was the result of,among othercauses,low interest rates,land reclamation and an increase in the labour force.The higher USoutput brought a number of benefits but some workers lost their jobs.This was because while someindustries expanded,others closed down.Income also became more unevenly distributed and pollutionincreased.US exports and imports rose over this period.The growth of trade with China,a major trading partnerof the US,was affected later in the period by increases in US tariffs on some Chinese imports.Theseincreases were expected to change the US current account balance,output and tax revenue.The US exports a range of products to China,including ice cream.China is the world's largestconsumer of ice cream,buying a third of all ice cream consumed.Chinese consumers sometimes buychocolate to eat with ice cream.In 2019,the price of chocolate increased.In 2020,US macroeconomic performance changed.The country's price level rose more slowly.largely due to a decrease in consumer expenditure and a reduction in workers'bargaining power.Thecountry's real GDP fell and unemployment rose.These changes influenced US macroeconomic policy.US government spending rose significantly as shown in Table 1.1.Table 1.1 US Government spending and unemployment rate 2015-2020YearGovernment spending($billion)Unemployment(%)201537005.3201639004.9201740004.4201841003.9201944003.7202066006.7The US central bank,the Federal Reserve,announced in September 2010 that it would allow theinflation rate to rise and would not increase the interest rate.In the past,central banks have aimed tokeep the inflation rate low because of the effects that inflation can have on,for example.investment.exports,the distribution of income and tax revenue.The Federal Reserve stated that it wanted to raiseeconomic growth which can increase income per head,employment and tax revenue.Answer all parts of Question 1.Refer to the source material in your answers.1 (a)Calculate the value of US imports from China in 2020.1(b)Identify two causes of the increase in the quantity of US factors of production.(c)Explain one way that import tariffs could improve the US economy.(d)Explain two reasons why the US inflation rate fell in 2020.(e)Draw a demand and supply diagram to show the effect of an increase in the price of acomplement on the market for ice cream.(f)Analyse the relationship between government spending and unemployment.(g)Discuss whether or not a central bank should aim for a low inflation rate(h)Discuss whether or not economic growth benefits everyone in the US.Section BAnswer any three questions.Each question is introduced by stimulus material.In your answer you may refer to this material and/orto other examples that you have studied.2Vietnam has a high number of female entrepreneurs.Some of their firms have grown and nowcompete with foreign multinational companies(MNCs)and public sector firms.The Vietnamesegovernment encourages MNCs to locate in Vietnam as a host country.It also intervenes in theeconomy to encourage the consumption of merit goods.(a)Identify two reasons why people become entrepreneurs.(b)Explain two benefits that an MNC can bring to its host country.[4(c)Analyse how a government could encourage the consumption of merit goods.6(d)Discuss whether or not private sector firms are likely to charge lower prices than public sectorfirms.3 In 2019,India became the world's largest producer of sugar.Sugar cane is grown in the countryby a large number of mainly low-income farmers.They sell sugar cane to mills which process thesugar cane into sugar.Processing the sugar cane is more capital-intensive than growing it.TheIndian government sets a minimum price for sugar cane and subsidises the export of sugar.(a)Define a minimum price.21(b)Explain two advantages of capital-intensive production.(c)Analyse why low-income farmers are likely to have low living standards.(d)Discuss whether or not a government subsidy on the export of sugar will help it achieve itsmacroeconomic aims.4Safiye Ali became the first female doctor in Turkey in 1923.By 2020,40%of Turkish doctors werewomen.Over this period,labour productivity increased.Turkey also experienced advances intechnology,a change in the current account balance on its balance of payments and a significantincrease in the size of its population.(a)Identify two causes of an increase in labour productivity.(b)Explain two reasons why someone may choose to become a doctor.[4(c)Analyse how advances in technology may improve the current account balance on a country'sbalance of payments.[6(d)Discuss whether or not a country with a high population growth rate is likely to experience ahigh economic growth rate.