National and International Economy · 7136/2

AQA A-level Paper 2, June 2023

All 14 written questions from AQA A-level Paper 2 (June 2023), National and International Economy. Case studies: Corporation tax in Ireland and Quantitative easing in the UK. Each question shows its marks and topic, with an examiner insight on 10, and opens the question paper and mark scheme at the right page.

Question paper Mark scheme Examiner report

Context 1

Corporation tax in Ireland

Extracts: Irish corporation tax · Extra tax revenue?

Q1Calculate2 marks

Using the data in Extract A (Figure 1), calculate the difference between Ireland’s corporation tax rate and the mean corporation tax rate of the other five European nations.
Give your answer to one decimal place.

TopicFiscal policy and supply-side policiesFiscal policy & public finances

Question paper p.3 Mark scheme p.5 Examiner report p.3 Open in the tool

Q2Explain4 marks

Explain how the data in Extract A (Figure 2), show that Ireland’s economy performed better than the economies of France and Spain in 2021.

TopicEconomic performanceMacro objectives & conflictsEconomic growth & cycle

Question paper p.3 Mark scheme p.6 Examiner report p.3 Open in the tool

Q3Explain9 marks

Extract C (line 13) states: ‘High economic growth rates allowed Ireland to run a budget surplus in 2018 and 2019.’
With the help of a diagram, explain how high economic growth could help to create a budget surplus.

TopicFiscal policy and supply-side policiesFiscal policy & public financesEconomic growth & cycle

Examiner insight

What to cover: Growth raises tax revenue and lowers benefit spending, so a surplus can appear.
Diagram: AD/AS diagram with rising output.
Watch out: Explain automatic stabilisers.

Question paper p.3 Mark scheme p.7 Examiner report p.4 Open in the tool Draw it: AD/AS diagram

Q4Assess25 marks

Extract B (lines 1–3) states: ‘Ireland has dropped its low-tax policy of the past 18 years, which had helped to persuade some of the world’s biggest companies, including Google and Facebook, to site their European headquarters in Ireland.’
Using the data in the extracts and your knowledge of economics, assess the view that a rise in Ireland’s corporation tax rate is likely to have a damaging effect on its macroeconomic performance.

TopicFiscal policy and supply-side policiesFiscal policy & public financesMacro objectives & conflicts

Examiner insight

What to cover: A higher corporation tax could reduce FDI, investment and growth.
Evaluation: It raises revenue for public services and Ireland has other advantages (skills, EU access). Judge using Ireland's data.
Watch out: Use the data in the extracts.

Question paper p.3 Mark scheme p.9 Examiner report p.4 Open in the tool Practise the AD/AS diagram

Context 2

Quantitative easing in the UK

Extracts: Unconventional monetary policy? · Quantitative easing – a dangerous addiction?

Q5Calculate2 marks

Using the data in Extract D (Figure 3), calculate the value of bonds that had been purchased by November 2020 for every £1 worth of bonds purchased by November 2009.
Give your answer in £s and to two decimal places.

TopicFinancial markets and monetary policyMonetary policy & interest rates

Question paper p.5 Mark scheme p.10 Examiner report p.4 Open in the tool

Q6Explain4 marks

Explain how the data in Extract D (Figure 4), show that the growth in quantitative easing (shown in Figure 3) may have been successful in helping the UK achieve its macroeconomic objectives since 2009.

TopicFinancial markets and monetary policyMonetary policy & interest ratesMacro objectives & conflicts

Question paper p.5 Mark scheme p.11 Examiner report p.4 Open in the tool

Q7Explain9 marks

Extract E (lines 4–5) states: ‘...banks in the UK decreased lending, reducing the availability of credit for households and firms. This damaged the real economy and created high unemployment.’
With the help of a diagram, explain how reduced availability of credit from banks may lead to increased unemployment.

TopicFinancial markets and monetary policyMoney & bankingUnemployment

Examiner insight

What to cover: Less credit reduces consumption and investment, so AD and output fall and firms employ fewer workers.
Diagram: AD/AS diagram with AD shifting left.
Watch out: Link to unemployment clearly.

Question paper p.5 Mark scheme p.12 Examiner report p.4 Open in the tool Draw it: AD/AS diagram

Q8Assess25 marks

Extract F (lines 18–19) states: ‘Some say that the use of QE is a dangerous addiction and its overuse can lead to problems in the future.’
Using the data in the extracts and your knowledge of economics, assess the view that the continued use of quantitative easing (QE) is damaging for the UK economy.

TopicFinancial markets and monetary policyMonetary policy & interest rates

Examiner insight

What to cover: QE can cause asset bubbles, inequality and inflation risk.
Evaluation: It supported growth after the financial crisis and the pandemic. Judge using the data.
Watch out: Define QE clearly.

Question paper p.5 Mark scheme p.14 Examiner report p.5 Open in the tool Practise the AD/AS diagram

Q9Essay 1Explain15 marks

Explain the main causes of globalisation.

Essay stimulus. Over the last two centuries, international trade has grown faster than global GDP, completely transforming the world economy. Today, about one quarter of total global output is exported. Globalisation has generated gains for the UK economy but has also made it vulnerable to external shocks.

TopicThe international economyGlobalisation

Examiner insight

What to cover: Causes of globalisation: lower transport and communication costs, technology, trade liberalisation, growth of MNCs, and free movement of capital.
Watch out: Give examples for each cause.

Question paper p.6 Mark scheme p.16 Examiner report p.5 Open in the tool

Q10Essay 1Assess25 marks

Assess the view that increased globalisation has been beneficial for the UK economy.

TopicThe international economyGlobalisation

Examiner insight

What to cover: Benefits: lower prices, export markets, FDI and specialisation.
Evaluation: Costs: job losses in manufacturing, inequality, dependence. Judge by sector.
Watch out: Use UK examples.

Question paper p.6 Mark scheme p.17 Examiner report p.5 Open in the tool

Q11Essay 2Explain15 marks

Explain the possible causes of a shift in the short-run aggregate supply curve to the left.

Essay stimulus. Throughout 2021 and 2022, the UK suffered from supply-side problems which caused prices to rise. Within an economic cycle, there are often trade-offs between different macroeconomic objectives. However, many economists argue that the government should do more to reduce the likelihood of these trade-offs persisting in the long run.

TopicHow the macroeconomy works (AD/AS)Aggregate supply

Examiner insight

What to cover: SRAS shifts left when costs rise: higher wages, raw material or energy prices, indirect taxes, a weaker currency, or lower productivity.
Diagram: SRAS shifting left.
Watch out: Explain each cause.

Question paper p.6 Mark scheme p.18 Examiner report p.5 Open in the tool Practise the AD/AS diagram

Q12Essay 2Evaluate25 marks

Evaluate how, in the long-run, governments could try to reconcile conflicts between the various objectives of economic policy.

TopicEconomic performanceMacro objectives & conflicts

Examiner insight

What to cover: Supply-side policies raise capacity and can reduce conflicts in the long run.
Diagram: LRAS shifting right.
Evaluation: Judge by cost and time lags.
Watch out: Name the conflicts first.

Question paper p.6 Mark scheme p.19 Examiner report p.5 Open in the tool Practise the Phillips curve diagram Practise the AD/AS diagram

Q13Essay 3Explain15 marks

Explain possible causes of economic growth.

Essay stimulus. According to the Office for National Statistics, the UK’s real gross domestic product (GDP) increased by an estimated 7.5% in 2021, the fastest rate in 80 years. This followed a fall in real GDP of 9.4% in 2020.

TopicEconomic performanceEconomic growth & cycle

Examiner insight

What to cover: Short-run growth: rising AD. Long-run growth: more investment, technology, education and population.
Diagram: AD and LRAS shifting right.
Watch out: Separate short-run and long-run growth.

Question paper p.7 Mark scheme p.20 Examiner report p.6 Open in the tool Practise the AD/AS diagram Practise the PPF diagram

Q14Essay 3Evaluate25 marks

Evaluate the view that economic growth usually leads to an improvement in living standards.

TopicEconomic performanceEconomic growth & cycle

Examiner insight

What to cover: Growth raises real incomes and funds public services.
Evaluation: It can harm the environment and raise inequality. Judge by type of growth.
Watch out: Define living standards.

Question paper p.7 Mark scheme p.21 Examiner report p.6 Open in the tool

Question text is quoted from the question papers, © AQA, for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Corporation tax in Ireland

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Quantitative easing in the UK

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