Essay about Econo Sl

1818 Words Dec 23rd, 2015 8 Pages
M14/3/ECONO/SP2/ENG/TZ0/XX

22145113

ECONOMICS
STANDARD LEVEL
PAPER 2
Tuesday 6 May 2014 (morning)
1 hour 30 minutes
INSTRUCTIONS TO CANDIDATES
 not open this examination paper until instructed to do so.
Do
 are not permitted access to any calculator for this paper.
You

Section A: answer one question.

Section B: answer one question.
 fully labelled diagrams and references to the text/data where appropriate.
Use
 maximum mark for this examination paper is [40 marks].
The

2214-5113

9 pages
© International Baccalaureate Organization 2014

M14/3/ECONO/SP2/ENG/TZ0/XX

–2–
SECTION A
Answer one question from this section.
1.

Study the extract below and answer the questions that follow.
Japan
…show more content…
The Japanese yen’s appreciation to record highs against the euro and relative strength against the US dollar has led to a boom in outward foreign direct investment (FDI). Exporters are transferring their operations from
Japan to other economies, where parts and labour costs are lower.
 Japan’s current account surplus could move into a deficit sooner than 2015 if more companies shift production abroad to combat losses from a strong Japanese yen. In 2011 Japanese firms purchased a record number of firms across the rest of Asia. Worldwide the number of Japanese purchases reached 455, only just short of its record of 463 in 1990.


Japanese firms are also acquiring shares in natural resource companies. Mitsubishi spent more than $5 billion buying a quarter of mining giant Anglo-American’s Chilean copper unit, and trading group Itochu bought a $1 billion stake in a US oil and gas firm.



The Japanese Prime Minister has encouraged the trend. “We will take advantage of the appreciating Japanese yen to support Japanese companies in purchasing foreign companies and acquiring resource interests,” he said.

 However, Japanese authorities have signalled there are concerns about a further appreciation of the Japanese yen. The central bank said last month that it plans to increase the funds available for currency intervention.
[Source: adapted from www.bloomberg.com, 5 January 2012; www.chinadaily.com.cn, 12 January 2012 and…