AQA A-level Paper 3, June 2025

TopicEconomic performanceEconomic growth & cycleTrade & comparative advantage

TopicThe international economyTrade & comparative advantageExchange ratesBalance of payments

TopicMarket failure and government interventionIndirect taxes & subsidies

1. AA limited range of options is provided
2. BIndividuals are required by law to choose an option
3. COptions are framed to influence the outcome of decisions
4. DThe option is selected automatically if an alternative is not chosen

TopicIndividual economic decision makingBehavioural economics

1. AOS
2. BOT
3. CST
4. DYZ

TopicEconomic methodology and the economic problemOpportunity costPPB / PPC

1. AApply logic to make connections between normative and positive economic concepts
2. BCreate a hypothesis and test whether it can predict the behaviour of economic agents
3. CDevelop a number of policies and test whether they are successful in the real world
4. DForm a set of value judgements and test whether they are supported by statistical data

TopicEconomic methodology and the economic problemPositive & normative

1. A(see diagram in paper)
2. B(see diagram in paper)
3. C(see diagram in paper)
4. D(see diagram in paper)

TopicHow the macroeconomy works (AD/AS)Aggregate supplyFiscal policy & public finances

1. AA fall in the number of Jobcentres provided by the government
2. BA persistent fall in reported levels of consumer confidence
3. CA reduction in the rate at which Jobseeker’s Allowance is paid
4. DA significant real terms increase in the National Living Wage

TopicEconomic performanceUnemployment

1. AA reduction in the rate of tax on income from retirement pensions
2. BA reduction in the tax on a good with positive consumption externalities
3. CAn increase in the rate of an inheritance tax
4. DAn increase in the tax on a good with very inelastic demand

TopicFiscal policy and supply-side policiesFiscal policy & public financesExternalities

1. ADiseconomies of scale
2. BFalling labour productivity
3. CIncreasing marginal returns
4. DIncreasing returns to scale

TopicProduction, costs and revenueCosts & economies of scaleProductivity & efficiency

1. A£180 000
2. B£125 000
3. C£75 000
4. D£22 500

TopicProduction, costs and revenueRevenue & profitOpportunity cost

1. A(see diagram in paper)
2. B(see diagram in paper)
3. C(see diagram in paper)
4. D(see diagram in paper)

TopicPrice determination in a competitive marketDemand & supply

1. AAn increase in investment leads to a larger increase in national income
2. BAn increase in productive capacity leads to a larger change in investment
3. CThe growth of productive capacity depends on the growth in investment
4. DThe level of investment depends on the rate of change in national income

TopicHow the macroeconomy works (AD/AS)Aggregate demand

1. APoint A
2. BPoint B
3. CPoint C
4. DPoint D

TopicEconomic performanceEconomic growth & cycleUnemployment

1. AFinland had a faster rate of growth than the UK.
2. BFinland’s Human Development Index was 1.1% higher than the UK’s.
3. CIreland’s gross national income per capita was higher than Finland’s.
4. DIreland had a more equitable distribution of income than Finland.

TopicMeasuring macroeconomic performanceLiving standards & wellbeingDevelopment

1. Ais less price inelastic when price increases from £8 to £10 than when it increases from £10 to £15.
2. Bis more price inelastic when price increases from £8 to £10 than when it increases from £10 to £15.
3. Cis price elastic when the price increases from £8 to £10 and when it increases from £10 to £15.
4. Dis unitary price elastic when price increases from £8 to £10 and when it increases from £10 to £15.

TopicPrice determination in a competitive marketPrice elasticity of supply

1. AMarket forces are likely to encourage landlords to reduce the rent they charge
2. BMarket forces are likely to lead to an increase in the average rent and fewer houses available for tenants
3. CSome landlords who would like to rent houses out at R1 cannot find tenants
4. DSome potential tenants who would like to rent a house at R1 cannot find a house to rent

TopicPrice determination in a competitive marketDemand & supplyPrice controls

1. AAs part of their earnings, managers receive profit-related pay and share options
2. BDue to the satisficing principle, managers act in the interests of shareholders
3. CMoral hazard means shareholders take more risks to achieve greater rewards
4. DProfit maximisation is not the most important objective for all managers

TopicMarket structuresBusiness objectives & growth

1. Aprices were lower at the start of the year and employment was lower at the end of the year.
2. Bthe quarterly inflation rate fluctuated whilst the unemployment rate increased throughout the year.
3. Cthe relationship between the change in the inflation and unemployment rates was positive in each quarter.
4. Dthere was an inverse relationship between prices and unemployment in each quarter.

TopicEconomic performanceInflation & deflationUnemployment

1. ACommercial banks’ deposits with the central bank
2. BNotes and coins held by households
3. CSavings deposited with commercial banks that have more than a year to maturity
4. DThe total amount owed on credit cards that has been outstanding for more than 28 days

TopicFinancial markets and monetary policyMoney & banking

1. ABank Y is less profitable than Bank Z and is less secure.
2. BBank Y is less profitable than Bank Z but is more secure.
3. CBank Y is more profitable than Bank Z and is more secure.
4. DBank Y is more profitable than Bank Z but is less secure.

TopicFinancial markets and monetary policyMoney & banking

1. ABefore and after new firms enter Before and after new firms enter the market the market
2. BBefore and after new firms enter Only after new firms enter the market the market
3. COnly after new firms enter Before and after new firms enter the market the market
4. DOnly after new firms enter Only after new firms enter the market the market

TopicMarket structuresPerfect competitionProductivity & efficiency

1. AFalls for both off-peak and peak-time passengers
2. BFalls for off-peak passengers and rises for peak-time passengers
3. CFalls for peak-time passengers and rises for off-peak passengers
4. DRises for both off-peak and peak-time passengers

TopicMarket structuresMonopoly & market power

1. A3.8%
2. B5.3%
3. C5.6%
4. D9.8%

TopicThe labour marketTrade unions & monopsony

1. AA firm pays supermarket The firm negotiates pay rates with shelf-stackers from one ethnic trade unions and the two groups of group less per hour than workers are represented by shelf-stackers from a different different trade unions. ethnic group.
2. BFull-time female workers for a firm Earnings include a bonus for each earn less on average than male year of service and males have colleagues performing similar roles. longer service on average.
3. CThe average female teacher in a A larger percentage of the male school earns less in a year than the teachers work full-time compared average male teacher. to the female teachers.
4. DWorkers in a factory aged under 20 are paid less per hour than workers All workers in the factory are paid aged over 20 who are performing the national minimum wage. similar roles.

TopicThe labour marketDiscrimination & pay gaps

1. AA major housebuilding programme helps to reduce the number of workers who are geographically immobile
2. BAverage earnings in an economy rise more slowly than the increase in the national minimum wage
3. CThe government changes the income tax system in a country to make it more progressive
4. DThe rate of increase in the price of necessities, such as energy, is higher than for all goods and services

TopicDistribution of income and wealthInequality & poverty

1. ACountry X has both an absolute advantage and a comparative advantage in producing canoes
2. BIn Country Y, the production of rowing boats requires two and a half times as many resources as the production of canoes
3. CThe maximum number of canoes and rowing boats that Country X and Country Y can produce between them is 400
4. DThe opportunity cost of producing a canoe in Country Y is 25% lower than it is in Country X

TopicEconomic methodology and the economic problemPPB / PPC

1. AUS$2300 million
2. BUS$3300 million
3. CUS$4050 million
4. DUS$5200 million

TopicThe international economyProtectionism & trading blocs

1. AA significant and sustained reduction in Bank Rate by the Monetary Policy Committee of the Bank of England
2. BDeregulation that makes it easier for UK transnational corporations to invest abroad
3. CIncreasing the supply of pounds on the foreign exchange market to reduce the exchange rate and make exports cheaper
4. DTax breaks for manufacturing firms that invest in upgrading their machinery and other capital goods

TopicFiscal policy and supply-side policiesSupply-side policiesBalance of payments

1. AAn objective of competition policy is to reduce firms’ profits by preventing firms from charging prices that are higher than their marginal cost of production.
2. BCompetition policy aims to increase social welfare by discouraging existing firms from entering new markets that have a low concentration ratio and are already very competitive.
3. CCompetition policy recognises that a monopoly may be preferable to many small firms producing in a competitive market due to the existence of diseconomies of scale.
4. DHigh concentration ratios and consumer complaints are examples of indicators which may suggest anti-competitive behaviour and prompt further investigation by the Competition and Markets Authority.

TopicMarket structuresCompetition policy & regulation

1. AFirms are likely to delay investment into more environmentally friendly production methods
2. BOnly the firms that generate the most pollution are likely to react at all
3. COver time, more firms will have an incentive to reduce their pollution
4. DThe firms with the lowest costs of reducing pollution will buy the most permits

TopicMarket failure and government interventionExternalitiesGovernment intervention (micro)

1. AThe amounts outstanding on households’ existing mortgages will fall in real terms
2. BThe nominal value of people’s incomes before tax will fall
3. CThe price of all goods and services sold in the UK will increase
4. DThe real value of the money deposited in commercial banks will increase

TopicEconomic performanceInflation & deflation

1. A$23 750
2. B$25 479
3. C$26 500
4. D$30 250 30

TopicMeasuring macroeconomic performanceGDP & national income