Edexcel International AS Unit 2, June 2021

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

Q41 mark

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

AThe economy is in recovery between points U and V
BA positive output gap exists at point V
CUnemployment is rising between points W and X
DA positive output gap exists at point X

Show the answer

The answer is D.

TopicEconomic growth

Question paper p.3 Mark scheme p.6 Open in the tool Practise the economic cycle diagram

Q51 mark

Which one of the following was the most likely cause of this increase in investment?

AA decrease in the rate of economic growth
BAn increase in indirect taxation
CAn increase in the tax on company profits
DA decrease in interest rates

Show the answer

The answer is D.

Question paper p.4 Mark scheme p.6 Open in the tool

Q61 mark

Based on this estimate, which one of the following is the value of the multiplier for Denmark?

A0.51
B1.96
C2.04
D4.90

Show the answer

The answer is B.

TopicNational income, the circular flow and the multiplier

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Section B

Q7Explain4 marks

Explain one likely economic effect of this investment tax relief.

Mark splitKnowledge 1Application 1Analysis 2

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Q8Explain4 marks

Explain one possible impact of this change in house prices on the level of consumption.

Mark splitKnowledge 1Application 1Analysis 2

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

Q9Draw4 marks

Draw a diagram showing the change in AD for Saudi Arabia's economy following the increase in the price of oil. Show the effect on the price level and real output.

Mark splitKnowledge 1Application 3

Question paper p.7 Mark scheme p.9 Open in the tool Draw it: AD/AS diagram

Q10Explain4 marks

With reference to the overall trend of the data, explain what is meant by the term 'growth of real GDP'.

Mark splitKnowledge 2Application 2

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Q11Calculate4 marks

Ceteris paribus, calculate the aggregate demand for the USA in 2018.

Mark splitKnowledge 1Application 3

Question paper p.9 Mark scheme p.11 Open in the tool

Section C

Case study

East African* economies

Extracts: Figure 1: Annual real GDP growth, 2014-2018 · Figure 2: Current account on the balance of payments as a percentage of GDP, · Extract A: Rapid growth in East Africa · Extract B: East African infrastructure investment needed · Figure 1: , Figure 2 and Extract A and Extract B adapted from 'East Africa Economic Outlook', African

In the extracts: East Africa Economic Outlook', African Development Bank, East African, Njiraini Muchira, South Sudan, FDI, GDP, Kenya, Tanzania, Uganda

Q12(a)Define2 marks

Define the term 'monetary policy'. (Extract A, line 8)

Mark splitKnowledge 2

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Q12(b)Explain4 marks

With reference to Extract A, explain the term 'foreign direct investment'.

Mark splitKnowledge 2Application 2

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Q12(c)Examine8 marks

With reference to Figure 1 and Extract A, examine two likely impacts of the annual GDP growth rates on the people living in East African countries.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

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Q12(d)Analyse6 marks

With reference to Figure 2, analyse one macroeconomic effect of the change in the current account balance as a percentage of GDP on East African economies.

Mark splitKnowledge 2Application 2Analysis 2

Question paper p.14 Mark scheme p.15 Open in the tool

Q12(e)Discuss14 marks

With reference to Extract A and Extract B, discuss the likely effects of interventionist supply-side policies on East African economies.

Mark splitEvaluation 6

Question paper p.16 Mark scheme p.17 Open in the tool Practise the AD/AS diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate fiscal policy instruments as a means of increasing the rate of economic growth.

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

Q14OptionalEvaluate20 marks

Evaluate the likely impact of an increase in the unemployment rate on workers, public finances and resource utilisation.

Mark splitEvaluation 8