AQA A-level Paper 3, Specimen

TopicEconomic performanceMacro objectives & conflictsDevelopment

TopicThe international economyGlobalisationAggregate demand

TopicThe international economyGlobalisationDevelopment

1. Ado not change as output changes.
2. Bfall as output increases.
3. Cinclude rent and raw materials.
4. Dequal total costs minus total variable costs.

TopicProduction, costs and revenueCosts & economies of scale

1. AAn increase in the supply of money.
2. BIncreased government expenditure on welfare benefits.
3. CAn increase in export subsidies.
4. DIncreased government expenditure on education and training.

TopicFiscal policy and supply-side policiesSupply-side policies

1. A30
2. B50
3. C70
4. D300

TopicIndividual economic decision makingUtility

1. Awage of W 1 and employment of L 1
2. Bwage of W 2 and employment of L 2
3. Cwage of W 3 and employment of L 1
4. Dwage of W 4 and employment of L 2

TopicThe labour marketTrade unions & monopsonyLabour demand & supply

1. AUK products becoming more expensive in the US.
2. Ba downturn in the UK’s economic cycle.
3. Ca higher inflation rate in the UK.
4. Dan increase in the UK’s budget deficit.

TopicThe international economyExchange rates

1. Aan increase in household incomes.
2. Ban increase in the price of electricity.
3. Ca decrease in the rate of value added tax (VAT) on light bulbs.
4. Dthe introduction of a government subsidy to the producers of light bulbs.

TopicPrice determination in a competitive marketDemand & supplyIncome elasticity

1. AThe size of the employed labour force.
2. BThe value of the Gini coefficient.
3. CThe size of the income multiplier.
4. DThe marginal rate of income tax.

TopicDistribution of income and wealthInequality & poverty

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 demandAggregate supplyFiscal policy & public finances

1. AWage rates
2. BImports of consumer goods
3. CThe money supply
4. DLabour productivity

TopicHow the macroeconomy works (AD/AS)Aggregate supply

1. ATax product X and subsidise product Y
2. BTax product X and tax product Y
3. CSubsidise product X and tax product Y
4. DSubsidise product X and subsidise product Y

TopicMarket failure and government interventionExternalitiesIndirect taxes & subsidies

1. Athe Bank of Treasury bills Advances bonds England Balances at Government
2. BTreasury bills the Bank of Advances bonds England Balances at Government
3. CAdvances the Bank of Treasury bills bonds England Balances at Government
4. DAdvances Treasury bills the Bank of bonds England

TopicFinancial markets and monetary policyMoney & banking

1. AIts level of money wage rates compared to its trading partners.
2. BIt imposing a higher level of tariffs compared to those of its trading partners.
3. CIts greater productive capacity in some goods compared to its trading partners.
4. DIts lower opportunity cost in the production of some goods compared to its trading partners.

TopicThe international economyTrade & comparative advantage

1. A20% Country X An increase in interest rates in
2. B20% other countries An increase in interest rate in
3. C25% Country X An increase in interest rates in
4. D25% other countries

TopicThe international economyExchange ratesMonetary policy & interest rates

1. Aoverproduction of merit goods.
2. Bequality of private costs with social costs.
3. Coveruse of scarce natural resources.
4. Dan efficient allocation of resources.

TopicMarket failure and government interventionMarket failure (general)Scarcity & choice

1. Anegative output gap and structural unemployment.
2. Bpositive output gap and cyclical unemployment.
3. Cpositive output gap and structural unemployment.
4. Dnegative output gap and cyclical unemployment.

TopicHow the macroeconomy works (AD/AS)Aggregate demandEconomic growth & cycle

1. A0.4%
2. B2.5%
3. C25%
4. D40%

TopicPrice determination in a competitive marketPrice elasticity of supply

1. Arate of interest.
2. Bprice level.
3. Cpercentage change in aggregate demand.
4. Drate of inflation.

TopicEconomic performanceInflation & deflation

1. Acost curve.
2. Brevenue product curve.
3. Cutility curve.
4. Drevenue curve.

TopicThe labour marketLabour demand & supply

1. A£35 million
2. B£70 million
3. C£120 million
4. D£280 million

TopicHow the macroeconomy works (AD/AS)Circular flowAggregate demand

1. Apeople act rationally.
2. Bconsumers attempt to maximise utility.
3. Cpeople consider all the available options when making choices.
4. Demotional factors influence economic decision-making.

TopicIndividual economic decision makingBehavioural economics

1. AIncreasing taxes to finance increased government expenditure.
2. BIncreasing the money supply to maintain very low interest rates.
3. CIncreasing government expenditure financed by increased government borrowing.
4. DCutting government expenditure to balance its budget.

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

1. Ait leads to a reduction in the consumption of demerit goods.
2. Bit leads to a reduction in the subsidies received by firms.
3. Cit reduces the number of competing firms in an industry.
4. Dconsumers are charged for the provision of public goods.

TopicMarket failure and government interventionGovernment intervention (micro)

1. ADecrease Decrease
2. BDecrease Increase
3. CIncrease Increase
4. DIncrease Decrease

TopicFinancial markets and monetary policyMoney & bankingInflation & deflation

1. AOW
2. BOX
3. COY
4. DOZ

TopicProduction, costs and revenueCosts & economies of scale

1. AThe price of the bond will have risen but the yield will be unchanged.
2. BThe price of the bond will have fallen but the yield will have increased.
3. CThe price of the bond will have risen but the yield will have increased.
4. DThe price of the bond will be unchanged but the yield will have fallen.

TopicFinancial markets and monetary policyMoney & banking

1. Ais making a loss in the short run but will remain in the market in the long run.
2. Bis making a profit and will remain in the market in the long run.
3. Cwill exit the market immediately to minimise its loss.
4. Dis minimising its loss by staying in the market in the short run.

TopicMarket structuresPerfect competitionRevenue & profit

1. A10%.
2. B20%.
3. C50%.
4. D100%.

TopicMeasuring macroeconomic performanceGDP & national incomePrice indices & inflation measurementInflation & deflation

1. AA decrease in the money supply.
2. BAn increase in innovation and productivity.
3. CA decrease in the savings ratio.
4. DAn increase in the current account deficit.

TopicEconomic performanceEconomic growth & cycleUnemploymentInflation & deflation

1. Aa movement from X to Y results in an improvement in productive efficiency because the total output of grain increases from 100 to 115 tonnes.
2. Bat point X, the opportunity cost of producing 20 more tonnes of wheat is 40 tonnes of barley.
3. Ca movement from point Y to point Z does not involve an opportunity cost because all resources are fully employed.
4. Dthe maximum amount of grain that the farm can produce in one year is 80 tonnes of wheat and 100 tonnes of barley.

TopicEconomic methodology and the economic problemPPB / PPC

1. AOV OX
2. BOV OY
3. COW OX
4. DOW OY

TopicMarket structuresMonopoly & market power