Unit 2: Macroeconomic performance and policy · WEC12/01

Edexcel International AS Unit 2, January 2023

All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 2 (January 2023), Macroeconomic performance and policy. Case studies: The German 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 a likely cause of 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 consume
DAn increase in the marginal propensity to import

Show the answer

The answer is D.

TopicAggregate demand

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

Q21 mark

Which one of the following is most likely to be a cost of economic growth?

AA decrease in profits for firms
BAn increase in damage to the environment
CA decrease in government tax revenues
DAn increase in the level of investment

Show the answer

The answer is B.

TopicEconomic growth

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

Q31 mark

Which one of the following best describes the cause of unemployment experienced in the USA?

ASeasonal
BStructural
CDemand deficient
DFrictional

Show the answer

The answer is C.

TopicMacroeconomic objectives and policy conflicts

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

Q41 mark

Which one of the following is the most likely effect of this change in real GDP per capita?

AAn increase in the standard of living
BAn increase in the rate of unemployment
CA decrease in consumer confidence
DA decrease in the purchasing power of consumers

Show the answer

The answer is A.

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 impact of this increase in the base rate of interest?

AAn increase in the rate of economic growth
BAn increase in the rate of unemployment
CA decrease in the cost of borrowing
DA decrease in the reward for saving

Show the answer

The answer is B.

TopicEconomic growth

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

Q61 mark

Which one of the following represents the ratio of GNI in 2018 to GNI in 2020?

A1 : 0.79
B1 : 0.96
C1 : 1.04
D1 : 1.27

Show the answer

The answer is A.

TopicMeasures of economic performance

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

Section B

Q7Explain4 marks

With reference to the chart, explain one likely cause of the deficit in Austria's balance of trade in goods and services.

Mark splitKnowledge 1Application 1Analysis 2

TopicMeasures of economic performance

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

Q8Draw4 marks

Draw an AS and AD diagram to show the negative output gap.

Mark splitKnowledge 1Application 3

TopicAggregate demand

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

Q9Calculate4 marks

Based on this information, calculate the change in Bulgaria's GDP between 2015 and 2020. Show your workings.

Mark splitKnowledge 1Application 3

TopicMeasures of economic performance

Question paper p.8 Mark scheme p.9 Examiner report p.6 Open in the tool

Q10Explain4 marks

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

Mark splitKnowledge 1Application 1Analysis 2

Question paper p.9 Mark scheme p.10 Examiner report p.6 Open in the tool

Q11Explain4 marks

With reference to the trend shown in the chart, explain what is meant by the 'savings ratio'.

Mark splitKnowledge 2Application 2

TopicNational income, the circular flow and the multiplier

Question paper p.10 Mark scheme p.11 Examiner report p.6 Open in the tool

Section C

Case study

The German economy

Extracts: Figure 1: Index of business confidence (January 2015=100), seasonally adjusted, · Figure 2: Inflation rate*, as measured by the consumer price index (CPI), · Extract A: Economic outlook · Figure 1: adapted from https://tradingeconomics.com/germany/business-confidence · Figure 2: adapted from https://tradingeconomics.com/germany/inflation-cpi · Extract A: adapted from https://www.ft.com/content/fe2e23ed-95b4-4031-a1c5-0d3a3ae72d6e

In the extracts: Jan Apr Jul Oct, CPI, German, Index, Inflation

Q12(a)Define2 marks

Define the term 'seasonally adjusted' (Figure 1).

Mark splitKnowledge 2

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.12 Examiner report p.7 Open in the tool

Q12(b)Explain4 marks

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

Mark splitKnowledge 2Application 2

TopicMacroeconomic objectives and policy conflicts

Question paper p.12 Mark scheme p.13 Examiner report p.7 Open in the tool

Q12(c)Analyse6 marks

With reference to Extract A, analyse two roles of a central bank.

Mark splitKnowledge 2Application 2Analysis 2

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.14 Examiner report p.4 Open in the tool

Q12(d)Examine8 marks

With reference to Figure 1 and Extract A, examine the likely impact of a fall in business confidence on Germany's real output.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.15 Examiner report p.7 Open in the tool Practise the AD/AS diagram

Q12(e)Discuss14 marks

With reference to the information provided, discuss the likely macroeconomic effects of a high rate of inflation on the German economy.

Mark splitEvaluation 6

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.17 Examiner report p.8 Open in the tool Practise the AD/AS diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate the view that very high global oil prices will always harm a country's macroeconomy.

Mark splitEvaluation 8

TopicAggregate demand

Question paper p.20 Mark scheme p.21 Examiner report p.9 Open in the tool

Q14OptionalEvaluate20 marks

Evaluate government policies that could be used to increase the rate of employment. Refer to a country of your choice in your answer.

Mark splitEvaluation 8

Question paper p.20 Mark scheme p.25 Examiner report p.4 Open in the tool

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 German economy

Section D

Other years of Edexcel International AS Unit 2

Topics on this paper