Unit 2: Macroeconomic performance and policy · WEC12/01

Edexcel International AS Unit 2, January 2022

All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 2 (January 2022), Macroeconomic performance and policy. Case studies: The eurozone economy. Each question shows its marks and topic, and opens the question paper and mark scheme at the right page.

Question paper Mark scheme Examiner report

Section A

Q11 mark

Which one of the following is compared when calculating PPP?

AThe price of a basket of comparable goods and services in different countries
BReal incomes, national happiness and wellbeing in different countries
CThe external value of one currency in terms of the US dollar
DInflation rates in different countries over a given time period

Show the answer

The answer is A.

TopicMeasures of economic performance

Question paper p.2 Mark scheme p.4 Examiner report p.5 Open in the tool

Q21 mark

If 2017 is the base year, which one of the following represents the index number for 2019?

A100.0
B102.0
C106.3
D108.4

Show the answer

The answer is D.

TopicMeasures of economic performance

Question paper p.2 Mark scheme p.4 Examiner report p.5 Open in the tool

Q31 mark

3 Which one of the following is likely to cause a decrease in the value of a country's multiplier?

AA decrease in the marginal propensity to tax
BA decrease in the marginal propensity to save
CAn increase in the marginal propensity to import
DAn increase in the marginal propensity to consume

Show the answer

The answer is C.

TopicAggregate demand

Question paper p.3 Mark scheme p.4 Examiner report p.5 Open in the tool

Q41 mark

Which one of the following can be deduced from the chart over the period shown?

AThe value of injections was always greater than the value of withdrawals
BThe Government was spending more than it received in taxation
CEgypt's balance of trade was always in a surplus
DThe value of imports was always greater than the value of exports

Show the answer

The answer is D.

TopicMeasures of economic performance

Question paper p.3 Mark scheme p.4 Examiner report p.5 Open in the tool

Q51 mark

Ceteris paribus, which one of the following is the most likely effect of this increase in the savings ratio?

AA decrease in withdrawals from the circular flow of income
BAn increase in injections into the circular flow of income
CA decrease in consumption
DAn increase in imports

Show the answer

The answer is C.

TopicNational income, the circular flow and the multiplier

Question paper p.4 Mark scheme p.4 Examiner report p.3 Open in the tool

Q61 mark

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

AThe positive output gap increased between 2017 and 2018
BThere was a negative output gap in 2018 and 2019
CThere was a positive output gap in 2018 and 2019
DThe negative output gap decreased between 2018 and 2019

Show the answer

The answer is B.

TopicEconomic growth

Question paper p.4 Mark scheme p.5 Examiner report p.5 Open in the tool

Section B

Q7Explain4 marks

With reference to the table, explain one reason why it is necessary to regularly update the CPI basket of goods and services.

Mark splitKnowledge 1Application 1Analysis 2

TopicMeasures of economic performance

Question paper p.5 Mark scheme p.6 Examiner report p.7 Open in the tool

Q8Draw4 marks

Draw a SRAS and AD diagram to show the effect of the decrease in the price of natural gas on the price level and real output for Japan.

Mark splitKnowledge 1Application 3

TopicAggregate demand

Question paper p.6 Mark scheme p.7 Examiner report p.7 Open in the tool Draw it: AD/AS diagram

Q9Calculate4 marks

Based on this information, calculate the change in Argentina's GDP per capita between 2018 and 2019. Show your workings.

Mark splitKnowledge 1Application 3

TopicMeasures of economic performance

Question paper p.7 Mark scheme p.8 Examiner report p.7 Open in the tool

Q10Explain4 marks

With reference to the chart, explain one likely macroeconomic impact of an increase in house prices on existing homeowners.

Mark splitKnowledge 1Application 1Analysis 2

Question paper p.8 Mark scheme p.9 Examiner report p.7 Open in the tool

Q11Explain4 marks

With reference to the information above, explain what is meant by net migration.

Mark splitKnowledge 2Application 2

Question paper p.9 Mark scheme p.10 Examiner report p.7 Open in the tool

Section C

Case study

The eurozone economy

Extracts: Figure 1: Annual real GDP growth rate, Q1 2018 to Q3 2020 · Figure 2: Inflation rate, as measured by the Consumer Price Index (CPI), · Extract A: Monetary policy · Figure 1: adapted from https://tradingeconomics.com/euro-area/gdp-growth-annual · Figure 2: adapted from https://tradingeconomics.com/euro-area/inflation-cpi · Extract A: adapted from FT; https://www.ft.com/content/94d82ff8-b56d-4f3c-aea4-2bdc975ec340

In the extracts: Q1 Q2 Q3 Q4, Jan Feb Mar Apr, Sep Oct Nov Dec, European Central Bank, Jun Jul Aug, CPI, Economists, GDP, Annual, ECB's

Q12(a)Define2 marks

Define the term 'real GDP' (Figure 1).

Mark splitKnowledge 2

TopicMeasures of economic performance

Question paper p.11 Mark scheme p.11 Examiner report p.8 Open in the tool

Q12(b)Explain4 marks

With reference to Figure 2, explain the difference between disinflation and deflation.

Mark splitKnowledge 2Application 2

TopicMeasures of economic performance

Question paper p.11 Mark scheme p.11 Examiner report p.4 Open in the tool

Q12(c)Analyse6 marks

With reference to Figure 1 and the first paragraph of Extract A, analyse two influences on the level of investment in the eurozone.

Mark splitKnowledge 2Application 2Analysis 2

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.12 Examiner report p.8 Open in the tool

Q12(d)Examine8 marks

Examine the likely effects of 'the increase in the exchange rate of the euro against the US dollar' (Extract A, lines 25-26) on the net trade balance of the eurozone.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicMeasures of economic performance

Question paper p.14 Mark scheme p.13 Examiner report p.8 Open in the tool

Q12(e)Discuss14 marks

With reference to the information provided and your own knowledge, discuss the likely macroeconomic effects of the ECB's monetary policy on the eurozone economy.

Mark splitEvaluation 6

TopicFiscal, monetary and supply-side policy

Question paper p.16 Mark scheme p.15 Examiner report p.9 Open in the tool Practise the AD/AS diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate the potential conflicts between the objective of economic growth and two other macroeconomic objectives.

Mark splitEvaluation 8

TopicMacroeconomic objectives and policy conflicts

Question paper p.20 Mark scheme p.19 Examiner report p.4 Open in the tool

Q14OptionalEvaluate20 marks

Evaluate supply-side policies that the Indian government could use to increase the country's productivity.

Mark splitEvaluation 8

TopicFiscal, monetary and supply-side policy

Question paper p.20 Mark scheme p.21 Examiner report p.10 Open in the tool Practise the AD/AS diagram

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.

Section A

Section B

Section C

The eurozone economy

Section D

Other years of Edexcel International AS Unit 2

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