School IB economics: Gold price tops $4,000 for first time

This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Specification:

• 2.1 Demand, 2.2 Supply, 2.3 Competitive market equilibrium

Read the article and then answer the questions:

Gold price tops $4,000 for first time

Questions

• Describe what has happened to the price of gold since October 2020 [2]

• Explain how price expectations and the desire to hold gold as an asset have increased demand [4]

• Explain why an increase in the price of gold has increased the quantity supplied [4]

• Using the signalling and incentive functions of price, explain how an increase in the price of gold leads to more resources being allocated to the gold market [10]

Alex Smith, Sevenoaks School, InThinking/thinkIB