National and International Economy · 7136/2

AQA A-level Paper 2, June 2024

All 14 written questions from AQA A-level Paper 2 (June 2024), National and International Economy. Case studies: Productivity and living standards and Globalisation and deglobalisation. 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 paperMark schemeExaminer report

Context 1

Productivity and living standards

Extracts: Indicators of economic performance and living standards, selected nations, 2021 · The UK’s productivity puzzle · Falling living standards in the UK?

Q3Explain9 marks
Extract C (lines 4–5) states ‘Energy and food bills had risen dramatically due to shocks to the economy, such as labour shortages, a depreciation of the pound...’
With the help of a diagram, explain how a depreciation of the pound may cause inflation.

TopicEconomic performanceInflation & deflationExchange rates

Examiner insight

What to cover
A depreciation raises import prices and costs, so SRAS shifts left (cost-push inflation). Cheaper exports also raise AD (demand-pull).
Diagram
SRAS shifting left, or AD shifting right.
Watch out
Link to both types of inflation.
Question paper p.3Mark scheme p.7Examiner report p.3Open in the toolDraw it: AD/AS diagram
Q4Assess25 marks
Extract B (lines 4–5) states: ‘Historically, productivity has increased over time, which has contributed to real wage rises and improved living standards.’
Using the data in the extracts and your knowledge of economics, assess the view that the government should make raising productivity a priority in order to improve living standards in the UK.

TopicMeasuring macroeconomic performanceLiving standards & wellbeingSupply-side policies

Examiner insight

What to cover
Higher productivity raises real wages and living standards.
Diagram
LRAS shifting right.
Evaluation
Consider cost, time lags and other priorities (inequality, public services). Judge using the data.
Watch out
Use the data in the extracts.
Question paper p.3Mark scheme p.9Examiner report p.4Open in the tool

Context 2

Globalisation and deglobalisation

Extracts: Macroeconomic performance indicators, selected Southeast Asian economies, · Made in Vietnam · A period of deglobalisation?

Q7Explain9 marks
Extract E (lines 17–18) states: ‘A low rate of corporation tax has also contributed to both short-run and long-run economic growth.’
With the help of a diagram, explain how a low rate of corporation tax may cause short-run and long-run economic growth.

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

Examiner insight

What to cover
Lower corporation tax raises investment, so AD rises in the short run and LRAS shifts right in the long run.
Diagram
AD and LRAS shifting right.
Watch out
Cover both the short and long run.
Question paper p.5Mark scheme p.12Examiner report p.4Open in the toolDraw it: AD/AS diagram
Q8Discuss25 marks
Extract F (lines 19–20) states: ‘The slowing, or reversal, of globalisation could mean that the benefits of specialisation and foreign direct investment are lost.’
Using the data in the extracts and your knowledge of economics, discuss the view that a slowing, or reversal, of globalisation would be harmful to developing economies such as Vietnam.

TopicThe international economyGlobalisationDevelopment

Examiner insight

What to cover
Deglobalisation can reduce FDI, trade and specialisation for developing economies.
Evaluation
It may reduce dependence and protect infant industries. Judge using Vietnam's data.
Watch out
Use the data on Vietnam.
Question paper p.5Mark scheme p.14Examiner report p.4Open in the tool
Q9Essay 1Explain15 marks
Explain possible reasons why a country may enter a recession.
Essay stimulus. In November 2022, the Bank of England warned there was a risk that the UK was heading for a recession. This announcement came shortly after the money supply fell, following its rapid growth in 2020 and 2021.

TopicEconomic performanceEconomic growth & cycle

Examiner insight

What to cover
A recession can follow a fall in AD (higher interest rates, lower confidence, a global slowdown) or a negative supply shock (energy prices).
Diagram
AD/AS diagram.
Watch out
Define a recession clearly.
Question paper p.6Mark scheme p.16Examiner report p.5Open in the toolPractise the AD/AS diagramPractise the economic cycle diagram
Q10Essay 1Assess25 marks
Assess whether an increase in the money supply is always damaging for an economy.
Essay stimulus. In November 2022, the Bank of England warned there was a risk that the UK was heading for a recession. This announcement came shortly after the money supply fell, following its rapid growth in 2020 and 2021.

TopicFinancial markets and monetary policyMoney & bankingInflation & deflation

Examiner insight

What to cover
Faster money supply growth can cause inflation (quantity theory).
Evaluation
With spare capacity, more money can raise output instead. Judge by the state of the economy.
Watch out
"Always" invites counter-examples.
Question paper p.6Mark scheme p.17Examiner report p.5Open in the toolPractise the AD/AS diagram
Q11Essay 2Explain15 marks
Explain the factors which determine the natural rate of unemployment.
Essay stimulus. In August 2022, the Office for National Statistics (ONS) announced that the unemployment rate had reached 3.5%, the lowest rate in almost 50 years. Some argue this is below the natural rate of unemployment (NRU) and that very high levels of employment may cause problems for the economy.

TopicEconomic performanceUnemployment

Examiner insight

What to cover
The natural rate depends on frictional and structural unemployment: benefits, skills, mobility, information and labour market flexibility.
Watch out
Explain each factor.
Question paper p.6Mark scheme p.18Examiner report p.5Open in the toolPractise the Phillips curve diagram
Q12Essay 2Discuss25 marks
Discuss the view that high levels of employment are always beneficial for an economy.
Essay stimulus. In August 2022, the Office for National Statistics (ONS) announced that the unemployment rate had reached 3.5%, the lowest rate in almost 50 years. Some argue this is below the natural rate of unemployment (NRU) and that very high levels of employment may cause problems for the economy.

TopicEconomic performanceUnemployment

Examiner insight

What to cover
High employment raises output, incomes and tax revenue.
Evaluation
It can cause inflation and skills shortages. Judge by productivity and wage growth.
Watch out
"Always" invites counter-examples.
Question paper p.6Mark scheme p.19Examiner report p.5Open in the toolPractise the Phillips curve diagramPractise the AD/AS diagram
Q13Essay 3Explain15 marks
Explain how the multiplier and accelerator affect the overall level of economic activity.
Essay stimulus. In November 2022, the UK government announced large public spending cuts and tax rises in order to reduce the budget deficit. Some economists worry that this may cause a negative multiplier effect and damage economic activity.

TopicHow the macroeconomy works (AD/AS)Aggregate demand

Examiner insight

What to cover
The multiplier: a change in spending causes a larger change in income. The accelerator: changes in income growth cause larger changes in investment. Together they amplify the economic cycle.
Watch out
Explain both and how they interact.
Question paper p.7Mark scheme p.20Examiner report p.6Open in the toolPractise the multiplier diagram
Q14Essay 3Evaluate25 marks
Evaluate the view that increasing taxation is the best way to reduce a budget deficit.
Essay stimulus. In November 2022, the UK government announced large public spending cuts and tax rises in order to reduce the budget deficit. Some economists worry that this may cause a negative multiplier effect and damage economic activity.

TopicFiscal policy and supply-side policiesFiscal policy & public finances

Examiner insight

What to cover
Tax rises raise revenue.
Evaluation
They can reduce AD and growth. Compare with spending cuts and growth. Judge by the state of the economy.
Watch out
Compare with other ways to cut the deficit.
Question paper p.7Mark scheme p.21Examiner report p.6Open 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.