The National Economy in a Global Context · 7135/2

AQA AS Paper 2, June 2022

All 12 written questions and 20 multiple choice questions from AQA AS Paper 2 (June 2022), The National Economy in a Global Context. Case studies: Economic growth and Government spending and taxation. Each question shows its marks and topic, with an examiner insight on 4, and opens the question paper and mark scheme at the right page.

Question paperMark schemeInsert

Context 1

Economic growth

Extracts: Real GDP growth, annual percentage change, various · The global economy goes into recession · Can we look forward to a decade of prosperity and

Q25Explain10 marks
Extract B (line 2) states: ‘...there were signs that economies were in the midst of a global slowdown’.
Explain how a global slowdown can affect employment in the UK.

TopicEconomic performanceEconomic growth & cycleUnemployment

Examiner insight

What to cover
A global slowdown reduces UK exports and investment, so output falls and firms cut jobs.
Diagram
AD/AS diagram.
Watch out
Explain derived demand for labour.
Question paper p.16Mark scheme p.10Insert p.1Open in the tool
Q26Evaluate25 marks
Extract C (lines 2–4) states: ‘...the Prime Minister, Boris Johnson, had promised to make the 2020s a “decade of prosperity and opportunity”. If this is to be achieved, it will be essential to find ways to boost both short-run and long-run growth’.
Use the extracts and your knowledge of economics to evaluate different policies that can be used to increase the long-run rate of growth of the UK economy.

TopicEconomic performanceEconomic growth & cycle

Examiner insight

What to cover
Policies: supply-side (education, infrastructure), fiscal and monetary.
Diagram
LRAS shifting right.
Evaluation
Judge by cost and time lags.
Watch out
Use the extracts.
Question paper p.18Mark scheme p.11Insert p.1Open in the tool

Context 2

Government spending and taxation

Extracts: Composition of UK government spending, 1997–98 to · Government spending to the rescue · How should the money be spent?

Q31Explain10 marks
Extract F (lines 1–2 and 8) states: ‘As part of fiscal policy, government spending can be used to allocate resources to different regions and sectors of the economy and consequently, change the pattern of economic activity...Taxation also has a role to play in affecting the pattern of activity’.
Explain ways in which a government can use fiscal policy to affect the pattern of economic activity.

TopicFiscal policy and supply-side policiesFiscal policy & public finances

Examiner insight

What to cover
Fiscal policy can shift activity between regions and sectors: regional spending, tax breaks, subsidies and taxes on particular goods.
Watch out
Explain ways clearly.
Question paper p.26Mark scheme p.16Insert p.1Open in the toolPractise the AD/AS diagram
Q32Assess25 marks
Extract E (lines 4–6) states: ‘...the report suggested that significant increases in spending would be required to help improve the wellbeing of the UK population’.
Use the extracts and your knowledge of economics to assess the view that a long-term, significant increase in government spending would be beneficial for the UK economy.

TopicFiscal policy and supply-side policiesFiscal policy & public finances

Examiner insight

What to cover
More spending can raise wellbeing, growth and public services.
Diagram
AD/AS diagram.
Evaluation
Consider debt, taxes and crowding out. Judge using the data.
Watch out
Use the extracts.
Question paper p.28Mark scheme p.17Insert p.1Open in the toolPractise the AD/AS diagramPractise the multiplier diagram
Q11 mark
Which one of the following is most likely to be an objective of government economic policy?
  1. AA low level of employment
  2. BA lower price level
  3. CAn equal distribution of income
  4. DAn increase in productive potential
Show the answer

The answer is D.

TopicEconomic performanceMacro objectives & conflicts

Question paper p.2Mark scheme p.3Open in the tool
Q21 mark
Figure 1 shows the aggregate demand (AD) and short-run aggregate supply (SRAS) curves for an economy.
Figure 1
Which one of the following combinations of events is most likely to cause the curves to shift from AD1 to AD2 and from SRAS1 to SRAS2?
  1. AA higher rate of savings and faster labour productivity growth
  2. BFaster economic growth abroad and lower world commodity prices
  3. CHigher money wages and more household consumption
  4. DLower interest rates and a higher rate of indirect taxes
Show the answer

The answer is B.

TopicHow the macroeconomy works (AD/AS)Aggregate demandAggregate supply

Question paper p.3Mark scheme p.3Open in the tool
Q41 mark
Unemployment rose in an economy despite overall economic growth. This is most likely to be explained by an increase in
  1. Acyclical unemployment.
  2. Bjob vacancies.
  3. Cstructural unemployment.
  4. Dthe school leaving age.
Show the answer

The answer is C.

TopicEconomic performanceEconomic growth & cycleUnemployment

Question paper p.4Mark scheme p.3Open in the tool
Q51 mark
An economy experiences an increasing negative output gap. Which one of the following combinations of outcomes most accurately describes the likely effects of this?
Inflationary Imports Unemployment pressure
  1. AFalling Falling Rising
  2. BFalling Rising Falling
  3. CRising Falling Rising
  4. DRising Rising Falling
Show the answer

The answer is A.

TopicEconomic performanceEconomic growth & cycleUnemploymentInflation & deflationTrade & comparative advantage

Question paper p.4Mark scheme p.3Open in the tool
Q71 mark
Index numbers for real GDP per head for Country X and Country Y, are shown in Table 1.
Table 1
Year Country X Country Y 2016 100 100 2017 102 104 2018 101 103 2019 105 107 From Table 1 it can be concluded that real GDP per head
  1. Agrew at the same rate between 2018 and 2019 in both countries.
  2. Bgrew every year throughout the period in both countries.
  3. Crose faster in Country X between 2017 and 2019.
  4. Dwas higher in Country Y than in Country X from 2017 to 2019.
Show the answer

The answer is C.

TopicMeasuring macroeconomic performanceGDP & national incomeLiving standards & wellbeing

Question paper p.5Mark scheme p.3Open in the tool
Q81 mark
Nominal GDP for an economy fell from £318 billion to £310 billion. Average prices also fell over the same period. It can be concluded that
  1. Adeflation resulted in a recession.
  2. Boutput fell, but by less than £8billion.
  3. Creal GDP was lower at the end of the period.
  4. Dreal incomes may have risen or fallen.
Show the answer

The answer is D.

TopicMeasuring macroeconomic performanceGDP & national income

Question paper p.5Mark scheme p.3Open in the tool
Q91 mark
An economy has a positive output gap and the government decides to increase interest rates. Which one of the following outcomes is most likely to result from the higher interest rates?
Investment Output gap Savings
  1. ADecrease Decrease Increase
  2. BDecrease Increase Decrease
  3. CIncrease Decrease Decrease
  4. DIncrease Increase Increase
Show the answer

The answer is A.

TopicFinancial markets and monetary policyMonetary policy & interest ratesAggregate demand

Question paper p.6Mark scheme p.3Open in the tool
Q121 mark
The Bank of England decides to raise interest rates to bring inflation back to its target rate.
This policy is less likely to be effective if at the same time
  1. Afirms’ profits and investment fall.
  2. Bincome tax rates are reduced.
  3. Clabour productivity grows more quickly.
  4. Dother countries reduce their demand for UK exports.
Show the answer

The answer is B.

TopicEconomic performanceInflation & deflationMonetary policy & interest rates

Question paper p.7Mark scheme p.3Open in the tool
Q131 mark
A small island economy suffers extensive damage from a hurricane. The following diagrams show aggregate demand (AD), short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) for the economy. Equilibrium before the hurricane is at E1.
Which one of the following diagrams shows the most likely position of E2, the equilibrium reached after the hurricane?
  1. A(see diagram in paper)
  2. B(see diagram in paper)
  3. C(see diagram in paper)
  4. D(see diagram in paper)
Show the answer

The answer is C.

TopicHow the macroeconomy works (AD/AS)Aggregate supply

Question paper p.8Mark scheme p.3Open in the toolPractise the AD/AS diagram
Q151 mark
Table 2 shows the components of aggregate demand in an economy which is in equilibrium.
Table 2
£ billion Consumer expenditure 1000 Investment 200 Government expenditure 350 Exports 150 Imports 200 If imports increase to £230 billion and the multiplier is 1.5, then the new level of national income would be
  1. A£1155 billion
  2. B£1455 billion
  3. C£1545 billion
  4. D£1845 billion
Show the answer

The answer is B.

TopicHow the macroeconomy works (AD/AS)Aggregate demand

Question paper p.9Mark scheme p.3Open in the tool
Q171 mark
An economy has a deficit on the current account of its balance of payments.
Which one of the following sets of circumstances is most likely to cause the deficit to increase?
  1. AA depreciating exchange rate and lower unemployment
  2. BBetter supply-side policies and lower interest rates
  3. CExpansionary fiscal policy and a stronger exchange rate
  4. DIncreased labour productivity and lower interest rates
Show the answer

The answer is C.

TopicThe international economyBalance of payments

Question paper p.10Mark scheme p.3Open 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.