ECO702 Economics and the Business Environment Coursework 2 Assessment Questions 2025 | UU

Question 1

Read the news article ‘Trainer Wars’ from The Economist. See below for full reference and a link to the article through Ulster University library.

Trainer wars. (2024, Nov 16). The Economist, 453, 66. Retrieved from 

i) How would you describe the market structure of the global sportswear industry? Briefly explain your answer. (5 marks)

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ii) Outline the characteristics of the global sportswear industry that have enabled rivals to gain a foothold in recent years. (5 marks)

Answer:

iii) What strategy have challenger brands pursued to gain a foothold in the industry, and what errors have the dominant brands made? (5 marks)

Answer:

Question 2

Read the news article ‘Foxconnification’ from The Economist. See below for full reference and a link to the article through Ulster University library.

Foxconnification. (2024, Oct 19). The Economist, 453, 66. Retrieved from

i) “Cars aren’t what they used to be” The car industry is moving increasingly towards electric vehicles. According to this Economist article, outline briefly the opportunities this creates for traditional car manufacturers to increase profits. (10 marks)

Question 3

Read the news article ‘Nations fail, academics succeed’ from The Economist. See below for full reference and a link to the article through Ulster University library.

Nations fail, academics succeed. (2024, Oct 19). 

i) How have economists traditionally explained long-run economic growth? (5 marks)

ii) How do Acemoglu and Robinson explain long-run economic growth? (5 marks)

iii) Briefly explain why unequal states are prone to instability. (5 marks)

Question 4

Illustrate and explain the aggregate demand/ aggregate supply model. (10 marks)

Answer:

Question 5

Explain how monetary policy operates to tackle high inflation. (10 marks)

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Question 6

Throughout 2022-2023, many developed economies, such as the USA and the UK, have been experiencing high inflation along with low unemployment. In this environment, governments have been employing loose fiscal policy.

i) Do you think loose fiscal policy is appropriate in these circumstances? Use the aggregate demand/aggregate supply model to illustrate and explain your answer. (5 marks)

Answer:

ii) Explain how the loose fiscal policy will impact the decisions of monetary policy decision makers seeking to tame inflation? (5 marks)

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iii) Explain the impact of the fiscal and monetary policy stance on public debt levels and the sustainability of fiscal policy. (5 marks)

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Question 7

Devastating forest fires in California and floods in Valencia are just two recent examples of economic and human disasters that have been exacerbated by global climate change. Carbon emissions, as a result of economic activity, contribute to global climate change.

i) Use the concept of market externalities to explain why the petrol market will result in a sub-optimal level of carbon emissions. Use a model to explain your answer. (5 marks)

ii) Explain how the government may use taxation to achieve an efficient level of output in the petrol market. Use a model to illustrate your answer. (5 marks)

iii) Should the government levy the tax on the consumer or the producer? Explain your answer. (5 marks)

iv) How does economic theory explain the lack of government action, at a global level, to sufficiently reduce carbon emissions? (3 marks)

Question 8

Explain the theory of purchasing power parity and evaluate the usefulness of the Economists’ Big Mac index in explaining long-run currency fluctuations. (7 marks)
 
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