Edexcel A · Theme 4: A global perspective · 4.1 International economics
Edexcel A Economics past paper questions: International economics
Every Edexcel A question on International economics from 2017 to 2025: 11 essays, 11 data response questions, 11 short answer questions and 5 multiple choice questions. It covers Emerging and developing economies, Measures of economic performance, The financial sector, Economic growth and Aggregate demand. Each question links to its paper, mark scheme and examiner report.
SubtopicsEmerging and developing economies 3Measures of economic performance 2The financial sector 2Economic growth 2Aggregate demand 2Poverty and inequality 1Role of the state in the macroeconomy 1Macroeconomic objectives and policy 1
Essay questions on international economics
In 2020, exports as a share of world GDP were 12% higher than in 2000, almost twice as high as 50 years ago. (Source adapted from: https://www.dhl.com/content/dam/dhl/global/dhl-spotlight/ documents/pdf/2021-gci-update-report.pdf ) Evaluate the possible factors contributing to globalisation.
Examiner insight
- What to cover
- Explain the drivers: cheaper container shipping, better communications technology, trade liberalisation through the WTO, the growth of multinationals and global supply chains, and deregulated capital flows. Link each to rising exports as a share of world GDP.
- Watch out
- Drifting into the effects of globalisation rather than the factors that caused it.
Case study: Ghana – cocoa and chocolate production
Evaluate the microeconomic and macroeconomic effects of Ghana joining the African Continental Free Trade Agreement (Extract F).
Examiner insight
- What to cover
- Cover both sides. Micro: cheaper inputs, tougher competition for Ghanaian firms, larger market for chocolate exports. Macro: trade creation and diversion, FDI, growth, tariff revenue loss.
- Watch out
- Assuming free trade areas only create trade. Trade diversion and the loss of tariff revenue must be weighed.
In 2022 the value of UK exports fell by 14% compared with 2020. In contrast, the global average increase in exports was 8.2% over the same time period. The UK’s competitiveness also fell, dropping five places from 18th in 2021 to 23rd in 2022 in the world competitiveness rankings. (Sources: adapted from https://www.ft.com/content/021c629d-5853-4111-9600- ab5f0eb65a35 and https://www.imd.org/centers/world-competitiveness-center/rankings/ world-competitiveness) Evaluate macroeconomic policies that could be used to increase international competitiveness in the UK’s export markets.
Examiner insight
- What to cover
- Cover supply side policies raising productivity through skills, infrastructure and investment incentives, plus looser monetary policy or a weaker pound cutting relative export prices. Link each to unit labour costs and export volumes.
- Watch out
- Confusing a fall in the exchange rate, which is a price effect, with a genuine gain in non-price competitiveness.
Both China and the United States have been gradually increasing the tariffs imposed on each other’s exports as their trade dispute continues. The IMF estimated that the trade dispute between China and the United States would reduce global GDP growth by 0.8 percentage points by the end of 2020. (Source: adapted from https://www.theguardian.com/business/2019/oct/15/imf-recession- world-growth-forecast-central-banks) Evaluate the likely impact of an increase in protectionism on the global economy.
Examiner insight
- What to cover
- Tariffs raise import prices, cut trade volumes and divert trade away from comparative advantage. Global output and AD fall and supply chain costs rise, consistent with the IMF estimate of 0.8 percentage points lost growth.
- Watch out
- Only narrating the US and China dispute and never analysing the effects on the wider global economy.
With global economic growth slowing and inequality rising, the case against globalisation is strengthening. But there are also many benefits to globalisation. Global trade and international trade agreements allow countries to focus on their strengths and share expertise, as well as reducing risk through diversification. (Source: adapted from https://www.ft.com/content/ 7b365844-9b75-11ea-adb1-529f96d8a00b) Evaluate the likely impact of globalisation on the global economy.
Examiner insight
- What to cover
- Explain the gains first: specialisation by comparative advantage, lower prices, economies of scale, foreign direct investment, technology transfer, faster growth and falling absolute poverty. Then build the costs.
- Watch out
- Listing facts about globalisation with no chain of reasoning to global output, prices or living standards.
Case study: The food delivery industry
Evaluate the microeconomic and macroeconomic effects of a depreciation of the pound. Refer to restaurants or other food delivery services in your answer.
Examiner insight
- What to cover
- Cover both sides. Micro: dearer imported food and ingredients raise restaurant costs and prices. Macro: net exports rise, AD rises, imported inflation, effects on the current account.
- Watch out
- Only covering the trade balance. The microeconomic cost effects on named firms carry equal weight.
Case study: The UK economy
Evaluate possible microeconomic and macroeconomic policies which could be used to improve UK competitiveness.
Examiner insight
- What to cover
- Cover both sides. Micro: education and training, infrastructure, competition policy, lower business taxes. Macro: exchange rate depreciation, supply side reform, productivity growth lowering unit labour costs.
- Watch out
- Listing policies without ranking them. A supported final judgement on which policy works best is required.
Three of Africa’s main trading blocs have agreed to form the Tripartite Free Trade Agreement (TFTA). This will create one of the world’s largest free trade areas, stretching across 26 countries with a combined GDP of around £1 trillion. (Source: https://uk.reuters.com/article/uk-africa-trade/mega-african-trade-bloc- paves-way-for-continental-commerce-idUKKBN0OR28M20150611) Evaluate the effects of the growth of trading blocs such as the TFTA on global trading patterns.
Examiner insight
- What to cover
- Explain trade creation inside the TFTA as tariffs fall, so members specialise by comparative advantage and intra bloc trade rises. Then explain trade diversion away from cheaper non members facing the common external tariff.
- Watch out
- Explaining the general benefits of free trade without distinguishing trade creation from trade diversion.
Case study: African countries, 2017
Evaluate the microeconomic and macroeconomic factors, apart from access to credit and banking, influencing growth and development in Mozambique.
Examiner insight
- What to cover
- Cover both sides. Micro: infrastructure, education and skills, property rights, corruption, health of the workforce. Macro: investment, FDI, export diversification away from primary products, exchange rate stability.
- Watch out
- The question excludes credit and banking. Answers that return to finance lose the application marks.
Since the global financial crisis of 2008 there have been over 5 700 increases in tariffs, quotas and administrative controls on international trade. Evaluate the likely effects of an increase in protectionism on the economy of a developing country of your choice.
Examiner insight
- What to cover
- Choose a named developing country. Explain tariffs and quotas raising the price of its exports abroad, cutting export volumes, worsening the current account, lowering AD and slowing growth in a primary export dependent economy.
- Watch out
- Writing only about the country imposing the tariff rather than the developing country losing export sales.
Case study: The UK economy
With reference to the information provided and your own knowledge, evaluate the likely microeconomic and macroeconomic influences on the UK’s international competitiveness.
Examiner insight
- What to cover
- Cover both sides. Micro: unit labour costs, productivity, skills, innovation, investment and regulation in UK firms. Macro: the exchange rate, relative inflation, corporation tax and infrastructure.
- Watch out
- Confusing competitiveness with the size of the trade balance, which is an outcome rather than a cause.
Data response questions on international economics
Case study: Sub‐Saharan Africa – growth and development
Examine two demographic factors influencing development in Kenya.
Examiner insight
- What to cover
- Give two demographic factors and develop each. Options include a high birth rate and young dependency ratio, rapid urbanisation, life expectancy and health, and net migration.
- Watch out
- Drifting into non demographic factors such as corruption or infrastructure. These earn nothing here.
Case study: Sub‐Saharan Africa – growth and development
Using the example of cut flowers (Extract F), discuss how the concept of absolute advantage may lead to growth in Kenya. Use numerical or diagrammatic analysis in your answer.
Examiner insight
- What to cover
- Kenya can produce cut flowers using fewer resources than competitors because of its climate and low labour costs. Show the gain from specialising and trading, using output figures or a PPF.
- Watch out
- The question names absolute advantage. Writing about comparative advantage and opportunity cost ratios misses the concept asked for.
Case study: Trade and aid in Rwanda
With reference to the information provided, examine two likely benefits for the Rwandan economy of the growth in the country’s population.
Examiner insight
- What to cover
- Choose two, such as a larger labour force raising Rwandan productive capacity, and a bigger domestic market allowing economies of scale and stronger consumption. Chain each through to output and growth.
- Watch out
- Confusing a bigger population with higher GDP per capita, so the benefits are overstated.
Case study: Trade and aid in Rwanda
Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the tariff on imports of second-hand clothes. Use an appropriate diagram to support your answer.
Examiner insight
- What to cover
- The tariff raises the price of imported second-hand clothes, so imports and quantity demanded fall. Rwandan clothing manufacturers gain output and revenue, consumers lose surplus, and government gains tariff revenue.
- Watch out
- Drawing the tariff diagram but leaving the areas unlabelled, so the consumer and producer effects earn no analysis marks.
Case study: Trade and aid in Rwanda
Discuss policies, other than import tariffs, that the Rwandan government could use to develop its manufacturing industries.
Examiner insight
- What to cover
- Suggest subsidies, energy and transport infrastructure, education and training, export processing zones, attracting foreign direct investment, or a competitive exchange rate. Explain how each cuts unit costs or raises Rwandan capacity.
- Watch out
- Slipping into tariffs or quotas, which the question rules out.
Case study: Trade and Development Issues in Africa
Nigeria is considering joining the African Continental Free Trade Agreement. Assess policies the Nigerian government could use in response to the concerns of the country’s ‘manufacturers and trade unions’ (Extract B paragraph 3) if they join this trading bloc.
Examiner insight
- What to cover
- The concern is import competition destroying infant manufacturing and jobs. Offer Nigerian policies such as subsidies, retraining, infrastructure and energy investment, and explain how each cuts unit costs or eases the adjustment for workers.
- Watch out
- Describing the costs of joining a trading bloc instead of assessing specific Nigerian government policy responses.
Case study: The UK economy since the financial crisis
With reference to Extract A and Figure 1, examine the likely impact of the change in the sterling exchange rate on the UK economy.
Examiner insight
- What to cover
- Read the direction of the change from Figure 1. A weaker pound raises export competitiveness and net exports, shifting AD right, while dearer imported inputs raise firms' costs and shift SRAS left, raising inflation.
- Watch out
- Giving only the export benefit and ignoring the cost push inflation from dearer imports.
Case study: African countries, 2017
Examine two reasons, apart from access to finance, why 90% of the manufacturing sector in Mozambique ‘is made up of small enterprises’ (Extract E, line 9).
Examiner insight
- What to cover
- Give two distinct reasons and develop each. Options include limited infrastructure and power supply, low skills and human capital, small domestic market size, and weak property rights or regulation.
- Watch out
- Two separate reasons are needed. One reason explained twice scores only once.
Case study: Globalisation and Inequality
With reference to Extract A, discuss two macroeconomic policies, apart from protectionism, that a government could use to reduce the negative effects of globalisation.
Examiner insight
- What to cover
- Choose two policies, such as retraining and education spending to cut structural unemployment, and progressive taxation with benefits to redistribute income. Explain the chain from each policy to the named negative effect of globalisation.
- Watch out
- Discussing tariffs or quotas when the question explicitly excludes protectionism.
Case study: World coal prices, 2006–2016, US dollars per tonne
Using the data in Figure 4 and other information provided, explain the likely change to Indonesia’s terms of trade since 2011.
Examiner insight
- What to cover
- Define the terms of trade as the index of export prices divided by the index of import prices, times 100. Falling commodity export prices since 2011 mean Indonesian terms of trade have worsened.
- Watch out
- Saying a fall in the terms of trade is automatically bad, instead of explaining it as export prices falling relative to import prices.
Case study: The Eurozone economy
Since mid-2015 the euro has appreciated. Assess the likely impact of an appreciation of the euro on the current account of the balance of payments for Eurozone countries.
Examiner insight
- What to cover
- Use the chain: a stronger euro makes Eurozone exports dearer in foreign currency and imports cheaper in euros. Export volumes fall and import volumes rise, worsening the trade balance and the current account.
- Watch out
- Stating the current account must worsen without testing it against the Marshall Lerner condition.
Short answer questions on international economics
Explain what is meant by ‘terms of trade’.
Explain the likely impact of the change in China’s terms of trade from 2012 to 2020 on China’s current account. Assume that demand for China’s exports and imports is price elastic.
Explain the likely impact of this tariff on the steel market in the US.
Case study: Ghana – cocoa and chocolate production
Explain one reason why a country might operate a managed exchange rate. Refer to Extract D in your answer.
Define the term ‘exchange rate’.
Explain the likely impact of the change in the exchange rate of the pound shown in the graph from 1st January 2018 to 1st January 2019 on the UK current account of the balance of payments.
Case study: Turkey – an emerging economy
Explain how the Turkish central bank intervenes in the currency market to prevent ‘excessive appreciation or depreciation of the Turkish lira’ (Extract A, lines 7–8).
Case study: Turkey – an emerging economy
Examine two reasons why the Turkish government may want to avoid a significant fall in the exchange rate of the Turkish lira.
Examiner insight
- What to cover
- Give two reasons and develop each. Options include imported inflation through dearer imports, the rising cost of servicing foreign currency debt, capital flight, and loss of confidence in the lira.
- Watch out
- Treating a falling exchange rate as automatically bad. The reasons must be specific to Turkey's dollar debt and import dependence.
Explain how Estonia’s competitiveness could be affected by rising unit labour costs.
With reference to the theory of comparative advantage, explain how CETA may increase the GDP of both the EU and Canada.
Case study: Copper prices, US dollars per tonne, 2007–2015
With reference to Figure 2, explain one likely reason for the change in the Chile peso exchange rate between 2013 and 2015.
Multiple choice questions
- A-level Paper 2, June 2025, Q2(a)
With reference to the chart above, which one of the following is correct?
- A-level Paper 2, June 2025, Q4(b)
Which one of the following is the percentage change in China’s terms of trade between 2012 and 2020, to the nearest whole number?
- AS Paper 2, June 2022, Q4(b)
Which one of the following represents the percentage change in the £ sterling and US$ exchange rate?
- A-level Paper 2, November 2021, Q3(a)
Which one of the following has been the overall change in the British pound to US dollar exchange rate from 1st January 2018 to 1st January 2019?
- A-level Paper 2, November 2020, Q3(b)
Which one of the following is most likely to happen to Argentina’s currency value as a result of capital flight, assuming it is operating with a floating exchange rate system?
Question text is quoted from the question papers, © Pearson Edexcel, 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.