Edexcel A · Theme 2: The UK economy, performance and policies · 2.1 Measures of economic performance

Edexcel A Economics past paper questions: Measures of economic performance

Every Edexcel A question on Measures of economic performance from 2016 to 2025: 6 essays, 21 data response questions, 40 short answer questions and 26 multiple choice questions. It covers Macroeconomic objectives and policy, Aggregate demand, Economic growth, International economics and The financial sector. Each question links to its paper, mark scheme and examiner report.

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SubtopicsMacroeconomic objectives and policy 9Aggregate demand 5Economic growth 5International economics 5The financial sector 1Poverty and inequality 1

Essay questions on measures of economic performance

A-level Paper 2, June 2024, Q7Optional25 marks
In 2021 Brazil’s current account deficit on the balance of payments was US$46.12 billion. The Central Bank of Brazil intervened to sell its own currency, the real, on September 23rd 2022. This was the first time it has intervened in foreign currency markets since December 2021. (Source adapted from: https://www.statista.com/statistics and https://www.centralbanking. com/central-banks/reserves/foreign-exchange/7953193/brazil-makes-first-fx-intervention- of-the-year) Evaluate macroeconomic policies that could be used to reduce a current account deficit. Refer to a country of your choice in your…

Examiner insight

What to cover
Cover expenditure switching through depreciation or protectionism, expenditure reducing through tighter fiscal or monetary policy, and supply side policies raising competitiveness. Apply each to a named country such as Brazil.
Watch out
Failing to name and apply a specific country, which throws away the application marks.
Question paper p.29Mark scheme p.30Examiner report p.54Open in the tool
A-level Paper 2, June 2023, Q8Optional25 marks
UK inflation, as measured by the CPI, rose to 10.1% in the 12 months to July 2022, compared to 2.0% in the 12 months to July 2021. (Source: adapted from https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/ consumerpriceinflation/july2022) Evaluate macroeconomic policies, apart from monetary policy, the UK government could use to reduce inflation.

Examiner insight

What to cover
Use contractionary fiscal policy, with higher taxes and lower spending shifting AD left, and supply side policies raising LRAS and productivity to cut unit costs. Note that 2022 inflation was largely cost push.
Watch out
Discussing interest rates and the Bank of England, when the question explicitly excludes monetary policy.
Question paper p.29Mark scheme p.22Examiner report p.57Open in the toolPractise the AD/AS diagram
AS Paper 2, June 2023, Q6(f)OptionalEvaluate20 marks

Case study: UK balance of trade and inflation

Evaluate the main influences on the UK’s net trade balance.

Examiner insight

What to cover
Explain the main influences on exports minus imports: the exchange rate, relative inflation and competitiveness, real incomes at home and abroad, productivity, and non-price factors such as quality.
Watch out
Net trade is exports minus imports, so both sides must be explained, not exports alone.
Question paper p.14Mark scheme p.16Examiner report p.6Open in the tool
A-level Paper 2, November 2021, Q8Optional25 marks
It has been estimated that if climate change led to the world’s temperature rising 2.5 °C compared to the temperature in 2010, then global GDP per capita would be 15% lower by 2100. If temperatures rise by 4 °C compared to the temperature in 2010, then by 2100 global GDP per capita would decline by more than 30%. (Source adapted from: https://www.nature.com/articles/s41586-018-0071-9) Evaluate the potential trade-offs between environmental protection and other macroeconomic objectives.

Examiner insight

What to cover
Show the conflicts: green taxes and regulation raise firms costs and shift SRAS left, so inflation rises and growth and employment fall, and international competitiveness weakens. Use the GDP per capita losses in the stimulus.
Watch out
Treating the environment as a standalone objective and never showing the trade-off with growth, inflation or employment.
Question paper p.30Mark scheme p.20Open in the tool
A-level Paper 3, June 2019, Q2(e)OptionalEvaluate25 marks

Case study: African countries, 2017

Evaluate the likely microeconomic and macroeconomic effects of relatively high inflation rates in many African countries.

Examiner insight

What to cover
Cover both sides. Micro: menu costs, shoe leather costs, distorted price signals, real wage erosion for the poorest. Macro: loss of competitiveness, uncertainty and lower investment, higher nominal interest rates.
Watch out
Listing costs of inflation with no reference to African economies. Application marks need a named country or context.
Question paper p.22Mark scheme p.24Examiner report p.61Open in the toolPractise the AD/AS diagram
AS Paper 2, June 2016, Q6(f)Evaluate20 marks

Case study: UK incomes, inflation and monetary policy

Evaluate whether the MPC has been successful in controlling the UK’s inflation rate since 2011.

Examiner insight

What to cover
Compare CPI inflation with the 2 per cent target across the period using the data. Explain how Bank Rate and quantitative easing work through borrowing, spending and aggregate demand to prices.
Watch out
Listing inflation figures without linking them to the target or to MPC decisions.
Question paper p.11Mark scheme p.16Examiner report p.31Open in the toolPractise the AD/AS diagram

Data response questions on measures of economic performance

AS Paper 2, June 2025, Q6(b)Explain5 marks
With reference to the first paragraph of Extract A, explain the likely relationship between real incomes and subjective happiness.

Examiner insight

What to cover
Higher real income raises happiness because more wants can be met, but the gain shrinks as income rises because of diminishing marginal utility and comparison with others. Use the first paragraph of Extract A.
Watch out
The link is positive but weakening, so explain why extra income adds less utility as income grows.
Question paper p.12Mark scheme p.9Examiner report p.5Open in the tool
AS Paper 2, June 2025, Q6(c)10 marks
With reference to Extract A and your own knowledge, assess the limitations of using GDP to compare living standards over time.

Examiner insight

What to cover
Use Extract A to set out limitations: the need for real and per capita figures, the hidden economy, inequality hidden by averages, quality changes, and unpaid work, leisure and environment ignored.
Watch out
The comparison is over time, so use real GDP per capita and avoid slipping into country comparisons.
Question paper p.12Mark scheme p.10Examiner report p.5Open in the tool
A-level Paper 2, June 2024, Q6(d)12 marks

Case study: The UK Economy

With reference to Extract B, discuss the use of quantitative easing in preventing deflation.

Examiner insight

What to cover
QE buys assets, so yields fall, the money supply and asset prices rise, and lending, consumption and investment increase. AD shifts right, raising the price level and stopping a deflationary spiral.
Watch out
Never explaining why deflation is harmful, so the purpose of preventing it is left unproven.
Question paper p.16Mark scheme p.22Examiner report p.39Open in the toolPractise the AD/AS diagram
AS Paper 2, June 2023, Q6(b)Explain5 marks

Case study: UK balance of trade and inflation

With reference to Figure 2, explain how the CPI inflation rate is measured. Refer to the concept of weights in your answer.

Examiner insight

What to cover
Describe the survey of household spending that sets the basket, monthly price collection, and weighting each item by its share of spending. The annual change in the index is the inflation rate. Use Figure 2.
Watch out
Weights must be explained as shares of household spending, not as an unweighted average of price changes.
Question paper p.14Mark scheme p.10Examiner report p.5Open in the tool
AS Paper 2, June 2023, Q6(c)10 marks

Case study: UK balance of trade and inflation

With reference to Extract A, assess the likely impact of a rise in the value of exports on the UK economy.

Examiner insight

What to cover
Higher export revenue raises net trade, so AD shifts right. The multiplier raises real GDP and employment and the trade balance improves. Use the figures in Extract A.
Watch out
A rise in export value may be higher prices rather than more goods sold, so check volume.
Question paper p.14Mark scheme p.11Examiner report p.5Open in the tool
AS Paper 2, June 2023, Q6(d)Explain6 marks

Case study: UK balance of trade and inflation

With reference to Extract B, explain two reasons for the increase in the rate of UK inflation.

Examiner insight

What to cover
Give two developed reasons from Extract B, such as higher global energy and commodity prices, a weaker pound raising import costs, or recovering demand meeting supply shortages.
Watch out
Each reason must be traced through to the price level; naming energy prices alone is not an explanation.
Question paper p.14Mark scheme p.12Examiner report p.5Open in the tool
AS Paper 2, June 2023, Q6(e)Discuss15 marks

Case study: UK balance of trade and inflation

Discuss the likely economic effects of the high rate of UK inflation on consumers and workers.

Examiner insight

What to cover
For consumers, show falling real incomes, lost purchasing power and eroded savings. For workers, show real wage cuts, wage demands and the risk to jobs as firms face higher costs.
Watch out
Both consumers and workers must be covered; an answer on only one group cannot reach the top level.
Question paper p.20Mark scheme p.14Examiner report p.5Open in the toolPractise the AD/AS diagram
A-level Paper 2, June 2022, Q6(c)10 marks

Case study: UK Government spending and inequality

With reference to Figure 2, assess whether an increase in real income improves subjective happiness within the UK.

Examiner insight

What to cover
Explain that higher real income raises consumption and material living standards, so reported wellbeing should rise. Use Figure 2 to say whether the relationship holds and whether extra income adds less happiness.
Watch out
Ignoring Figure 2 and simply asserting that money cannot buy happiness with no economic reasoning.
Question paper p.15Mark scheme p.13Examiner report p.28Open in the tool
AS Paper 2, June 2022, Q6(c)10 marks

Case study: UK investment and productivity

With reference to the fourth paragraph of Extract A, assess the limitations of using GDP to compare living standards over time.

Examiner insight

What to cover
Use the fourth paragraph of Extract A. Explain that GDP must be real and per capita, that the hidden economy is missed, and that inequality, quality changes and unpaid work are ignored.
Watch out
Keep the comparison over time and use real GDP per capita rather than nominal totals.
Question paper p.12Mark scheme p.10Examiner report p.5Open in the tool
A-level Paper 2, June 2019, Q6(c)10 marks

Case study: The UK economy since the financial crisis

With reference to the last paragraph in Extract C, assess the impact of a fall in real incomes on subjective happiness.

Examiner insight

What to cover
Explain that lower real incomes cut consumption of goods and services and raise financial stress and job insecurity, so measured life satisfaction falls. Use the happiness evidence in the last paragraph of Extract C.
Watch out
Treating real GDP per head and subjective happiness as the same thing rather than testing the link.
Question paper p.14Mark scheme p.12Examiner report p.28Open in the tool
AS Paper 2, June 2019, Q6(c)Explain5 marks

Case study: UK inflation and economic growth

With reference to the last paragraph of Extract A and Figure 2, explain one reason why it is necessary to regularly update the CPI basket of goods and services.

Examiner insight

What to cover
Spending patterns and tastes change over time, so old items and weights stop reflecting what households buy. Use the last paragraph of Extract A and Figure 2 to show the resulting measurement error.
Watch out
Give one reason for updating the basket rather than a general list of CPI weaknesses.
Question paper p.16Mark scheme p.11Examiner report p.5Open in the tool
AS Paper 2, June 2019, Q6(e)15 marks

Case study: UK inflation and economic growth

With reference to Figure 4, Extract B and your own knowledge, discuss the limitations of using GDP data to compare living standards between the UK and developing countries.

Examiner insight

What to cover
Set out limitations using Figure 4 and Extract B: need for per capita and PPP adjustment, large informal economies, inequality, poor data quality, and welfare factors GDP misses.
Watch out
Keep to comparison between countries; do not drift into comparing UK living standards over time.
Question paper p.16Mark scheme p.14Examiner report p.5Open in the tool
AS Paper 2, June 2017, Q6(b)10 marks

Case study: UK economic recovery

With reference to the information provided and your own knowledge, assess the likely causes of the UK’s trade deficit.

Examiner insight

What to cover
Give causes such as weak relative productivity and competitiveness, a strong pound, strong domestic demand pulling in imports, and weak demand in export markets. Link each to the data.
Watch out
Confusing the trade deficit on the current account with a government budget deficit.
Question paper p.13Mark scheme p.11Examiner report p.20Open in the tool
AS Paper 2, June 2017, Q6(d)Explain6 marks

Case study: UK economic recovery

With reference to Figure 2 and Extract A, explain two likely reasons why the growth of the UK’s nominal GDP per capita at PPPs was slower than that of Germany after 2010.

Examiner insight

What to cover
Use Figure 2 and Extract A. Give two reasons, such as weaker UK productivity growth and faster UK population growth, which spreads output over more people.
Watch out
Comparing total GDP growth when the measure is GDP per capita at purchasing power parity.
Question paper p.13Mark scheme p.14Examiner report p.25Open in the tool
AS Paper 2, June 2017, Q6(e)Evaluate15 marks

Case study: UK economic recovery

Evaluate policies the government could use to increase the UK’s productivity.

Examiner insight

What to cover
Cover supply side policies such as investment in education and training, infrastructure spending, tax incentives for capital investment and support for research. Explain how each raises output per worker.
Watch out
Offering demand side policies such as an interest rate cut when the aim is higher productivity.
Question paper p.13Mark scheme p.15Examiner report p.28Open in the tool
AS Paper 2, June 2016, Q6(d)Explain6 marks

Case study: UK incomes, inflation and monetary policy

With reference to the data, explain two likely reasons for the UK’s falling inflation rate.

Examiner insight

What to cover
Use the data. Give two causes, such as falling oil and commodity prices cutting firms' costs, and a stronger pound lowering import prices. Explain each as a cost push or demand pull effect.
Watch out
Saying prices are falling when a lower inflation rate means prices still rise, only more slowly.
Question paper p.11Mark scheme p.13Examiner report p.23Open in the tool
AS Paper 2, June 2016, Q6(e)15 marks

Case study: UK incomes, inflation and monetary policy

With reference to Extracts A and B and your own knowledge, discuss whether the MPC should be concerned about the risk of deflation in the UK economy.

Examiner insight

What to cover
Define deflation as a sustained fall in the price level. Falling prices delay spending, raise the real value of debt and cut aggregate demand, pushing inflation below the 2 per cent target.
Watch out
Treating every fall in prices as harmful without separating supply side from demand side causes.
Question paper p.11Mark scheme p.14Examiner report p.26Open in the toolPractise the AD/AS diagram

Short answer questions on measures of economic performance

Multiple choice questions

  1. A-level Paper 2, June 2025, Q3(a)

    With reference to the chart above, which one of the following is correct?

  2. A-level Paper 2, June 2025, Q5(c)

    Which one of the following would be the most likely result of an increase in the rate of employment?

  3. A-level Paper 2, June 2023, Q2(a)

    With reference to the chart, which one of the following is true?

  4. AS Paper 2, June 2023, Q2(b)

    Which one of the following is the most likely effect of the change in real GDP per capita between 2019 and 2020?

  5. AS Paper 2, June 2023, Q4(b)

    Assume 2019 is the base year. Which one of the following represents the index number for 2020?

  6. A-level Paper 2, June 2022, Q2(a)

    With reference to the chart, which one of the following is true? Average UK house prices:

  7. AS Paper 2, June 2022, Q2(b)

    Using the above GDP data, which one of the following represents the index number for 2016, if 2017 is the base year?

  8. AS Paper 2, June 2022, Q5(a)

    Which one of the following can be deduced from the chart?

  9. A-level Paper 2, November 2021, Q5(a)

    From the data in the graph above, which one of the following may be deduced?

  10. A-level Paper 2, November 2020, Q1(c)

    With reference to the chart on page 2, which one of the following is correct over the period shown?

  11. A-level Paper 2, November 2020, Q4(c)

    Which one of the following types of unemployment is most likely to be caused by a technological change in an industry?

  12. AS Paper 2, November 2020, Q1(c)

    From the above data, it can be deduced that the percentage point difference between CPI and RPI was:

  13. AS Paper 2, November 2020, Q5(b)

    Which one of the following represents the ratio of Gross National Income in 2015 to Gross National Income in 2017?

  14. A-level Paper 2, June 2019, Q3(c)

    The increase in Austria’s unit labour costs between 2010 and 2017 is:

  15. A-level Paper 2, June 2018, Q3(c)

    Using the chart on page 6, which one of the following may be inferred about the United States balance of payments?

  16. A-level Paper 2, June 2018, Q5(b)

    Which one of the following is most likely to result from an increase in bank lending to individuals?

  17. AS Paper 2, June 2018, Q1(c)

    Which one of the following is the most likely effect of an increase in real GDP per capita?

  18. A-level Paper 2, June 2017, Q1(a)

    Which one of the following types of unemployment best explains the change in the data between 2008 and 2010?

  19. A-level Paper 2, June 2017, Q3(a)

    Which one of the following statements is correct about the UK’s inflation record between September 2011 and January 2013? Based on the data shown, the UK experienced:

  20. AS Paper 1, June 2017, Q2(c)

    The percentage change in wheat production from 2014 to 2015 was:

  21. AS Paper 2, June 2017, Q1(c)

    Which one of the following is most likely to be a cause of deflation? A fall in:

  22. AS Paper 2, June 2017, Q2(b)

    Which one of the following is the most likely reason for a fall in the unemployment rate?

  23. AS Paper 2, June 2017, Q3(a)

    Which one of the following can be inferred from the chart?

  24. AS Paper 2, June 2016, Q2(b)

    The Office for National Statistics estimates that the UK population was 64 million in 2013. Using the data, what was the UK’s total GDP in 2013?

  25. AS Paper 2, June 2016, Q3(c)

    Which one of the following is likely to cause a reduction in the claimant count?

  26. AS Paper 2, June 2016, Q4(a)

    Which one of the following can be inferred from Figure 1 in the period shown?

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.