The National Economy in a Global Context · 7135/2

AQA AS Paper 2, June 2025

All 12 written questions and 20 multiple choice questions from AQA AS Paper 2 (June 2025), The National Economy in a Global Context. Case studies: Population changes and the UK economy and Business investment in the UK economy. 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

Population changes and the UK economy

Extracts: UK population changes, 2015 to 2020 · Why are changes in population important? · Making the most of the labour force: achieving a

Q25Explain10 marks
Extract B (lines 6–7) states: ‘A shortage of labour is one of the factors that has contributed to rising inflation, threatening macroeconomic stability.’
Explain how a shortage of labour might contribute to rising inflation.

TopicEconomic performanceInflation & deflationLabour demand & supply

Examiner insight

What to cover
A labour shortage raises wages, so costs and prices rise (cost-push inflation).
Diagram
SRAS shifting left.
Watch out
Explain cost-push inflation.
Question paper p.17Mark scheme p.10Insert p.1Open in the toolPractise the AD/AS diagram
Q26Evaluate25 marks
Extract C (lines 8–9) states: ‘Increased spending on education and training is likely to be essential to achieve a long-term improvement in macroeconomic performance.’
Use the extracts and your knowledge of economics to evaluate the view that increased government spending on education and training is essential to achieve a long-term improvement in UK macroeconomic performance.

TopicFiscal policy and supply-side policiesSupply-side policiesMacro objectives & conflicts

Examiner insight

What to cover
Education and training raise productivity and LRAS.
Diagram
LRAS shifting right.
Evaluation
Consider cost and time lags. Judge using the data.
Watch out
Use the extracts.
Question paper p.19Mark scheme p.11Insert p.1Open in the toolPractise the AD/AS diagram

Context 2

Business investment in the UK economy

Extracts: UK business investment and real GDP, 2017 to 2022 · Why has UK business investment been weak? · How can business investment be increased?

Q31Explain10 marks
Extract E (lines 12–13) states: ‘To increase revenue, the main rate of corporation tax, the tax payable on firms’ profits, was increased to 25%.’
Explain why an increase in the tax payable on firms’ profits may lead to lower productivity growth.

TopicFiscal policy and supply-side policiesFiscal policy & public financesSupply-side policiesProductivity & efficiency

Examiner insight

What to cover
Higher tax lowers post-tax profits, so investment in new capital and technology falls and productivity growth slows.
Watch out
Explain the link clearly.
Question paper p.27Mark scheme p.17Insert p.1Open in the toolPractise the AD/AS diagram
Q32Evaluate25 marks
Extract F (lines 11–13) states: ‘There are signs that business investment is starting to increase again, but government intervention may be needed to encourage firms to continue investing, to try to ensure the increase in investment is sustained.’
Use the extracts and your knowledge of economics to evaluate what more, if anything, the Government should do to achieve a sustained increase in investment in the UK economy.

TopicHow the macroeconomy works (AD/AS)Aggregate demandSupply-side policies

Examiner insight

What to cover
Policies: investment allowances, lower interest rates, infrastructure spending, political stability.
Diagram
AD/AS and LRAS diagrams.
Evaluation
Judge by cost and effectiveness.
Watch out
Use the extracts.
Question paper p.29Mark scheme p.18Insert p.1Open in the toolPractise the AD/AS diagram
Q11 mark
Which one of the following is most likely to be an objective of government macroeconomic policy?
  1. AAchieving deflation in the average price level
  2. BCreating a budget surplus during a recession
  3. CGenerating stable and sustained economic growth
  4. DImproving productivity in an electronics firm
Show the answer

The answer is C.

TopicEconomic performanceMacro objectives & conflicts

Question paper p.2Mark scheme p.3Open in the tool
Q21 mark
In an economy, the number of people in work is unchanged but the rate of growth of labour productivity slows from 2.3% to 0.4%.
It can be concluded that there will be an increase in
  1. Acyclical unemployment.
  2. Bnational income.
  3. Craw material prices.
  4. Dthe negative output gap.
Show the answer

The answer is B.

TopicHow the macroeconomy works (AD/AS)Aggregate supplyProductivity & efficiency

Question paper p.2Mark scheme p.3Open in the tool
Q41 mark
Figure 1 shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves for an economy.
Figure 1
All other things being equal, which one of the following is most likely to cause aggregate demand to shift from AD1 to AD2 and long-run aggregate supply to shift from LRAS1 to LRAS2?
  1. AA fall in spending on imports and a rise in productivity
  2. BA reduction in exports and an increase in imports of capital goods
  3. CAn increase in Bank Rate and a reduction in firms’ costs of production
  4. DAn increase in saving and a rise in government spending on infrastructure
Show the answer

The answer is A.

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

Question paper p.3Mark scheme p.3Open in the tool
Q51 mark
Which one of the following statements concerning short-run economic growth and long-run economic growth is correct?
  1. AShort-run growth is inflationary whereas long-run growth will cause a fall in the average price level
  2. BShort-run growth may occur independently of the government whereas long-run growth is only achieved as a result of government policy
  3. CShort-run growth may occur when governments use demand-side policies but these do not affect long-run growth
  4. DShort-run growth may reduce spare capacity whereas long-run growth increases productive capacity
Show the answer

The answer is D.

TopicEconomic performanceEconomic growth & cycle

Question paper p.4Mark scheme p.3Open in the tool
Q71 mark
Table 1 shows the levels of government spending and national income in a country in Year 1 and Year 2.
Table 1
Government National income Year spending (£bn) (£bn) 1 1120 2200 2 1250 2500 All other things being equal, what is the value of the multiplier to two decimal places?
  1. A0.43
  2. B1.14
  3. C2.00
  4. D2.31
Show the answer

The answer is D.

TopicHow the macroeconomy works (AD/AS)Aggregate demand

Question paper p.5Mark scheme p.3Open in the tool
Q81 mark
Which one of the following is most likely to cause a leftward shift in the short-run aggregate supply curve?
  1. AA reduction in the national minimum wage
  2. BA rise in the general price level
  3. CA rise in the price of imported raw materials
  4. DAn increase in government subsidies to firms
Show the answer

The answer is C.

TopicHow the macroeconomy works (AD/AS)Aggregate supply

Question paper p.5Mark scheme p.3Open in the tool
Q91 mark
Table 2 shows various macroeconomic indicators for an economy from 2021 to 2023.
Table 2
Balance of Real GDP Unemployment payments on Year Inflation (%) growth (%) rate (%) current account (£bn) 2021 2.5 4.7 2.5 –12.7 2022 2.8 4.2 2.9 –13.4 2023 2.9 3.9 3.1 –15.1 Which one of the following can be concluded from the data in Table 2?
  1. AIncomes are more equitably distributed due to lower unemployment
  2. BThe central bank should reduce interest rates
  3. CThe government’s budget deficit has increased
  4. DThere is evidence of a conflict between macroeconomic policy objectives
Show the answer

The answer is D.

TopicEconomic performanceMacro objectives & conflicts

Question paper p.6Mark scheme p.3Open in the tool
Q111 mark
Figure 2 shows a production possibility curve for an economy producing consumer and capital goods.
Figure 2
The movement from point X to point Y is most likely to have been caused by
  1. Aa fall in the exchange rate.
  2. Ba fall in the trade surplus.
  3. Ca rise in the foreign currency price of exports.
  4. Da rise in the volume of imports.
Show the answer

The answer is A.

TopicThe international economyTrade & comparative advantagePPB / PPC

Question paper p.7Mark scheme p.3Open in the tool
Q141 mark
The textile industry is a major employer of unskilled labour in an economy. The introduction of labour-saving technology in this industry is most likely to lead to an increase in
  1. Acyclical unemployment.
  2. Bfrictional unemployment.
  3. Cseasonal unemployment.
  4. Dstructural unemployment.
Show the answer

The answer is D.

TopicEconomic performanceUnemploymentTechnological change

Question paper p.8Mark scheme p.3Open in the tool
Q151 mark
To reduce the impact of rising inflation, the government cut indirect taxes on several key goods and services and made a one-off payment to all low-income households.
Which one of the following diagrams illustrates the most likely impact on the macroeconomy?
  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 A.

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

Question paper p.9Mark scheme p.3Open in the toolPractise the AD/AS diagram
Q161 mark
All other things being equal, which one of the following is most likely to reduce the deficit on the UK’s balance of payments on current account?
  1. AA recovery in the world economy
  2. BA rise in the value of the pound
  3. CAn increase in the price level in the UK
  4. DRising real income levels for UK households
Show the answer

The answer is A.

TopicThe international economyBalance of payments

Question paper p.10Mark scheme p.3Open in the tool
Q171 mark
Which one of the following is most likely to contribute to a decision by the Bank of England’s Monetary Policy Committee to increase Bank Rate?
  1. AA decrease in the Consumer Price Index
  2. BA fall in the number of people applying for mortgages
  3. CAn increase in the number of job vacancies
  4. DDeflation in countries supplying imports to the UK
Show the answer

The answer is C.

TopicFinancial markets and monetary policyMoney & bankingMonetary policy & interest rates

Question paper p.10Mark scheme p.3Open in the tool
Q181 mark
Table 3 shows the tax-free allowance and income tax rates in four countries, A, B, C and D. The tax-free allowance is the amount of income on which a person does not pay any income tax.
Table 3
Tax-free Country Income tax rate allowance ($) Country A 0 20% Country B 10 000 30% Country C 8 000 35% Country D 15 000 40% In which country would a person earning $40 000 pay the most income tax?
  1. ACountry A
  2. BCountry B
  3. CCountry C
  4. DCountry D
Show the answer

The answer is C.

TopicFiscal policy and supply-side policiesFiscal policy & public finances

Question paper p.11Mark scheme p.3Open in the tool
Q191 mark
According to the accelerator process
  1. Aa fall in the price of capital goods encourages more investment.
  2. Ban increase in investment leads to a greater increase in national income.
  3. Cfirms invest to increase spare capacity.
  4. Dinvestment is determined by past changes in national income.
Show the answer

The answer is D.

TopicHow the macroeconomy works (AD/AS)Aggregate demand

Question paper p.12Mark 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.