Updated in Sep 2016

Hong Kong Diploma of Secondary Education Examination

Economics

Sample Question of Data Response Questions

In 2019 HKDSE Examination, a data response question (DRQ) will be introduced in Paper 2, Section B. The followingsample question wasdraftedon September 2016. Together with the sample question drafted in 2014, they serve as reference for teachers and students in preparation for the 2019 Exam. The marks of the DRQ may vary across years but the total number of marks in each section in Paper 2 is fixed.

The following table outlines the various components of the public assessment of Economics in 2019 HKDSE:

Component / Weighting / Duration
Paper1 / Multiple-choice questions will be set on the compulsory part of the curriculum. All questions are compulsory. / 30%
(45marks) / 1 hour
Paper2 / Section A: Short questions will be set on the compulsory part of the curriculum. All questions are compulsory. / 26%
(44 marks) / 2 hours 30 minutes
Section B: Structured/essay-type /data response questions will be set on the compulsory part of the curriculum. All questions are compulsory. / 35%
(60 marks)
Section C: Structured/essay-type questionswill be seton the elective parts of the curriculum. Candidates are only required to attempt the questions from one of the two elective parts. / 9%
(16 marks)
Total for paper 2 / 70%
(120 marks)

Sample question for data-response question (effective from 2019 HKDSE onward)

Recommended time: 35 minutes

A group of Secondary Six students is doing a research about “timecurrency.” They found that there is money denominated in terms of “time” in Hong Kong issued by a non-government organization in Wan Chai. “Time currency” may help the poor improve their living standard.

Source A:The sample of time currency circulated in Wan Chai community

Source B: Time currency scheme in Wan Chai

To get time currency, you should register as a member of the time currencyscheme and:

  1. provide service to other members (or to the scheme) to earn time currency. Service includes:after-school care, private tuition, cleaning, catering, repairing, Chinese medical service etc; or
  2. sell new/ second hand products in the flea market/ second hand market organized by the scheme.

To spend time currency, you can:

  1. pay for theservice provided by other members; or
  2. pay for new/second hand products in the flea market/second hand market.

Updated in Sep 2016

Source C: News report about the scheme

/ Mr Ma (63 years old): After being sacked by an electronic company, I learned how to do haircut and join the time currency scheme, responsible for haircut and second-hand furniture matching hotline. Providingsuch services is enjoyable, with satisfactionand friendship gained.
Price for some of the goods/services:
- 60minutesofhouse cleaning service: 1 hour of time currency
- pants: 10-20 minutes of time currency
- CD/DVD: 5-15 minutes of time currency

Source D:An extract of a research on the time currency scheme

Among 150 members surveyed only one-fifth live in Wan Chai. The active members tend to have low-medium income and qualification, while half of them are middle-aged (40-59 years old). However, members are not fully utilizing the time currency: in the past year most members earned less than 2 hours of time currency and spent less than 1 hour of it.

The major reason of not using the time currency is neither the limited choice of goods and service, nor high price of the goods. Instead, members cited “lack of time” and “inconvenience venue” as the reasons.

Reference:

Questions: (21 marks)

a)Refer to Sources A and B. In what way the time currency helps the barter exchange among the residents? (2 marks)

b)List TWO economic phenomena during economic recession. Refer to SourcesC and D, explain why the time currency may become more popular in the time of economic recession.

(4 marks)

c)One hour of time currency can exchange for one hour of service. Compare the time currency system with the existing cash system in different aspects such as

‐acceptability,

‐the signaling function of prices, or

‐other aspects.

Based on your comparison, give some suggestions to increase the popularity of time currency system. (12 marks)

d)If the time currency becomes more popular in an economy, would the GDP underestimate the actual output of the economy? Explain your answers. (3 marks)

Suggested answers:

a)Function of time currency in barter:

‐It helps solve the problem of double coincidence of wants.(2M)

OR

‐It helps store the value as the time currency can be used later. (2M)

b)Economic phenomena:

‐low/negative real GDP growth

‐low inflation/ deflation

‐low levels of investment and consumption or low/ negative growth rate of investment and consumption

‐high/rising unemployment

Reasons:

‐Time cost in recession is lower and people are more willing to spend their time to small scale production/production that does not generate income in monetary term. (2M)

‐There are more unsold stocks/idle capacities that can be used in the exchange of time currency. (2M)

‐Using time currency can increase the demand for goods and services as consumers can pay in terms of time - no need to use their income during recession. (2M)

Updated in Sep 2016

c)It should be aware that candidates may take a different approach, which, if appropriate, should be rewarded.

9-12 marks:
Shows an accurate understanding of economic concepts and theories.
Presents an in-depth analysis/application with reference to the source/data.
Supports synthesis/evaluation by appropriate theories and evidence.
Uses language that expresses ideas clearly and fluently.
Presents well-organised and coherent arguments.
5-8 marks:
Shows a fair understanding of economic concepts and theories.
Presents an analysis/application in moderate level with reference to the source/data.
Attempts to evaluate/synthase with some support of theories and evidence.
Uses language that conveys a clear message.
Presents arguments in an organised way.
1-4 marks
Shows a weak understanding of economic concepts and theories.
Presents little analysis/application.
Shows limited ability to express ideas.
Presents inconsistent arguments.
0 mark
The answer of a candidate fails to meet the minimum requirement of the assessment standard.

Answers may include the following:

Acceptability:

HK dollars are legal tender/generally accepted as a medium of exchange while time currency are of limited acceptance. (2M)

Signaling function:

The change in price in terms of money reflects the change in demand and supply of the good i.e. the change of behavior of the consumers and producers. “Price” in the time currency only reflects time spent on the production. (4M)

Updated in Sep 2016

Other aspects for comparison:

Using time currency can only access limited range of goods and services (mainly locally produced goods) while using money can buy all kinds of goods and services without limitation of places. This may benefit the localsmall firms.(4M)

There may be no/very limited lending and borrowing of time currency which restrain the transaction using time currency while people can borrow cash from bank for transaction or investment and save money to bank for earning interest. (4M)

Under time currency the prices of goods and services tend to be more stable as it is related to the time spent during production, while price level in terms of money is subjected to higher fluctuation e.g. monetary policies will affect price level.(4M).

Time currency can help lower income group to access more goods/services in the time of recession while in monetary system they may be unemployed and/or earning low wage so that many goods/services are beyond their affordability. (4M)

Price is in terms of Hong Kong dollar in the monetary system while time currency is in terms of time. (2M)

Time currency is less divisible than cash. (2M)

Time currency may be more easily counterfeit than banknotes. (2M)

Suggestions for increasing the popularity:

  1. Increasing the benefit of using the time currency:

Expand the scheme to more shops/ large chains/public services to raise the acceptability of the time currency. (2M)

Set up a time currencybank that can have borrowing/lending of,paid interest to the deposit of, and monitor the quantity of time currency. (2M)

  1. Reducing the cost of using the time currency:

Allow mixed use of time currency and cash during purchase /set an exchange rate so that people can convert cash to time currency to join the time currency scheme in a more convenient way. (2M)

Develop an app/website for matching the good/services provided by time currency users to reduce the time spent on searching the shops in the time currency scheme. (2M)

Students are expected to make suggestions supported by their arguments made in their discussion.

(Note: Students may use some answers from other parts of the question as long as their arguments are organized and logically consistent with their stand.)

d)Yes. GDP tends to underestimate the actual output as some outputs (e.g. services) are not bought and sold in the marketusing money. Instead some outputs are obtained using time currency which is not calculated in the GDP. (3 marks)