AQA A-level Paper 3, June 2023

TopicThe international economyDevelopment

TopicPrice determination in a competitive marketCommodity marketsDemand & supply

TopicFiscal policy and supply-side policiesFiscal policy & public financesDevelopment

1. Aa fall in the price of a substitute for lemons, oranges.
2. Ba rise in the price of lemonade.
3. Ca reduction in the price of a complement for lemons, fish.
4. Dfavourable weather leading to a record harvest.

TopicPrice determination in a competitive marketDemand & supplyCommodity markets

1. Aall natural resources have a market price.
2. Ball natural resources will eventually be used up.
3. Cthe environment has an opportunity cost.
4. Dthe environment is a pure public good.

TopicEconomic methodology and the economic problemScarcity & choiceExternalities

1. A–12.5
2. B–0.08
3. C+0.08
4. D+12.5

TopicPrice determination in a competitive marketCross elasticity

1. Aconsumer expenditure at market prices.
2. Bthe output produced by different sectors of the economy.
3. Cthe rate of inflation.
4. Dthe size of the population.

TopicMeasuring macroeconomic performanceGDP & national incomeLiving standards & wellbeing

1. A300 350 350
2. B350 400 250
3. C350 250 350
4. D450 300 250

TopicHow the macroeconomy works (AD/AS)Circular flowFiscal policy & public financesTrade & comparative advantage

1. AA more equitable distribution of income
2. BBringing down the rate of inflation
3. CIncreasing the rate of economic growth
4. DMinimising the rate of unemployment

TopicFinancial markets and monetary policyMonetary policy & interest rates

1. AAnchoring and framing bias
2. BAvailability bias and social norms
3. CRules of thumb and anchoring
4. DSocial norms and rules of thumb

TopicIndividual economic decision makingBehavioural economics

1. ANew firms will enter the market, increasing supply
2. BSome firms will leave the market and the price will rise
3. CThe firm will reduce its output to reduce its average total cost
4. DThe firm will reduce its price to increase its market share

TopicMarket structuresPerfect competitionRevenue & profit

1. ACollusive oligopoly
2. BCreative destruction
3. CHit and run competition
4. DStatic efficiency

TopicMarket structuresContestability & barriersTechnological change

1. A0.4
2. B0.6
3. C2.5
4. D3.0

TopicHow the macroeconomy works (AD/AS)Aggregate demand

1. ANegative output gap Negative output gap
2. BNegative output gap No output gap
3. CPositive output gap No output gap
4. DPositive output gap Positive output gap

TopicEconomic performanceEconomic growth & cycle

1. AM and P
2. BM and V
3. CP and Q
4. DV and Q

TopicFinancial markets and monetary policyMoney & bankingInflation & deflation

1. A4th worker is employed.
2. B5th worker is employed.
3. C6th worker is employed.
4. D7th worker is employed.

TopicProduction, costs and revenueCosts & economies of scale

1. Aequal to average revenue.
2. Bnegative.
3. Cpositive.
4. Dzero.

TopicProduction, costs and revenueRevenue & profitPrice elasticity of demand

1. AProfits are maximised
2. BShareholders make all organisational decisions
3. CThe adoption of satisficing behaviour
4. DThe free-rider problem

TopicMarket structuresBusiness objectives & growth

1. ADemand for exports has risen as a result of the intervention
2. BEconomic agents have higher inflation expectations due to the intervention
3. CThe government cut taxes to reduce unemployment
4. DThe intervention has increased the natural rate of unemployment

TopicEconomic performanceInflation & deflationUnemployment

1. ADeciding how much public funding is given to each government department
2. BEnabling the government to run a budget deficit by issuing government bonds
3. CEvaluating the government’s performance against its own fiscal targets
4. DMaking recommendations to the government on how to reduce its budget deficit

TopicFiscal policy and supply-side policiesFiscal policy & public finances

1. AIncrease its purchases of government securities
2. BIncrease market interest rates by increasing Bank Rate
3. CIncrease the capital ratio required of commercial banks
4. DIncrease the liquidity ratio required of commercial banks

TopicFinancial markets and monetary policyMonetary policy & interest ratesMoney & banking

1. AThe demand curve for carrots shifts due to the rationing function of prices
2. BThe price of carrots increases because carrots and potatoes are in derived demand
3. CThe price of potatoes increases because potatoes and carrots are in joint supply
4. DThe supply curve for potatoes shifts due to the incentive function of prices

TopicPrice determination in a competitive marketDemand & supply

1. A2 units
2. B3 units
3. C4 units
4. D5 units

TopicMarket failure and government interventionExternalities

1. ADividends paid to overseas owners of shares in UK companies
2. BEmergency aid provided to another country following a natural disaster
3. CInvestment in building a factory abroad by a UK firm
4. DPremiums paid by UK based organisations to foreign insurance companies

TopicThe international economyBalance of payments

1. ACountry X has a comparative advantage in the production of both coffee and tea
2. BCountry X has a comparative advantage in the production of coffee and has an absolute advantage in the production of tea
3. CThe opportunity cost of producing both coffee and tea is higher in Country X than in Country Y
4. DThe opportunity cost of producing tea in Country X is lower than the opportunity cost of producing tea in Country Y

TopicEconomic methodology and the economic problemOpportunity costTrade & comparative advantage

1. Astrengthened against the pound sterling and strengthened against the euro.
2. Bstrengthened against the pound sterling and weakened against the euro.
3. Cweakened against the pound sterling and strengthened against the euro.
4. Dweakened against the pound sterling and weakened against the euro.

TopicThe international economyExchange rates

1. Afirms suffer a fall in supernormal profit due to the actions of regulators.
2. Bgovernment regulations reduce the impact of monopoly power.
3. Cgovernment removes regulations that have been acting as a barrier to entry.
4. Dindustry regulators grow too close to the firms they are regulating.

TopicMarket structuresCompetition policy & regulationGovernment failure

1. AA fall in the demand for the final product and a rise in the number of workers training to enter this labour market
2. BA fall in wages in a labour market with similar skill requirements and a fall in the price of a substitute for the output produced
3. CAn increase in the minimum qualifications required for workers in the industry and a fall in the price of a complement for the output produced
4. DAn increase in the unemployment rate across the economy and firms substituting capital for labour in the production process

TopicThe labour marketLabour demand & supply

1. AThe proportion of employers’ total costs which are made up by wages
2. BThe quantity demanded of the final output that the workers produce
3. CThe size of the pool of skilled labour available in the local area
4. DThe time taken to achieve the qualifications needed for the role

TopicThe labour marketLabour demand & supply

1. Aless equal and the Gini coefficient has decreased.
2. Bless equal and the Gini coefficient has increased.
3. Cmore equal and the Gini coefficient has decreased.
4. Dmore equal and the Gini coefficient has increased.

TopicDistribution of income and wealthInequality & poverty

1. AA decrease in the number of people who are economically active
2. BAn improvement in the balance of payments on current account
3. CAn increase in the size of the government’s budget deficit
4. DThe creation of a positive output gap

TopicFiscal policy and supply-side policiesSupply-side policiesAggregate supply

1. AAsymmetric information may lead bank customers to take out loans they cannot repay
2. BBanks may engage in more risky lending if they believe the central bank will support them in a crisis
3. CBanks may experience lower profits if the central bank imposes high capital requirements
4. DRegulations imposed by the central bank may make it harder for low-income groups to get loans

TopicFinancial markets and monetary policyMoney & bankingCompetition policy & regulation

1. A$50bn
2. B$200bn
3. C$275bn
4. D$325bn 30

TopicFiscal policy and supply-side policiesFiscal policy & public finances