Unit 2: Macroeconomic performance and policy · WEC12/01

Edexcel International AS Unit 2, June 2022

All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 2 (June 2022), Macroeconomic performance and policy. Case studies: The Australian 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 represents the value of the multiplier in Germany?

A0.5
B0.6
C1.7
D2.5

Show the answer

The answer is C.

TopicNational income, the circular flow and the multiplier

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

Q21 mark

Which one of the following is also a role of the central bank?

AIncreasing the trade deficit
BActing as the lender of last resort
CAchieving national happiness
DReducing income equality

Show the answer

The answer is B.

TopicFiscal, monetary and supply-side policy

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

Q31 mark

Which one of the following may be deduced from this information?

AThere is a high level of underemployment in Indonesia
BThere is a high level of economic inactivity in Indonesia
CThere is a high rate of unemployment in Indonesia
DThere is a high rate of inflation in Indonesia

Show the answer

The answer is A.

TopicMacroeconomic objectives and policy conflicts

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

Q41 mark

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

AThere was disinflation from January 2016 to July 2016
BThere was deflation from January 2017 to July 2017
CThe average price level was unchanged between January 2019 and July 2019
DThe average price level was lower in January 2020 than in July 2020

Show the answer

The answer is D.

TopicMacroeconomic objectives and policy conflicts

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

Q51 mark

Which one of the following policies could the Italian Government implement to achieve a balanced budget over the following year?

ADeflationary monetary policy
BReflationary monetary policy
CDeflationary fiscal policy
DReflationary fiscal policy

Show the answer

The answer is C.

TopicFiscal, monetary and supply-side policy

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

Q61 mark

Which one of the following was the most likely cause of the change from SRAS1 to SRAS2?

AAn increase in energy prices
BA decrease in indirect tax rates
CAn increase in investment in education
DA decrease in bank lending to consumers

Show the answer

The answer is A.

TopicAggregate supply

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

Section B

Q7Explain4 marks

With reference to the chart, explain one likely reason for the surplus in Malaysia's balance of trade in goods and services.

Mark splitKnowledge 1Application 1Analysis 2

TopicMeasures of economic performance

Question paper p.5 Mark scheme p.6 Examiner report p.3 Open in the tool

Q8Draw4 marks

Draw a LRAS and AD diagram to show the effect of this net migration on the price level and real output for New Zealand.

Mark splitKnowledge 1Application 3

TopicAggregate demand

Question paper p.6 Mark scheme p.8 Examiner report p.3 Open in the tool Draw it: AD/AS diagram

Q9Calculate4 marks

Based on this information, calculate the change in Angola's population between 2019 and 2020. Show your workings.

Mark splitKnowledge 1Application 3

TopicMeasures of economic performance

Question paper p.7 Mark scheme p.9 Examiner report p.3 Open in the tool

Q10Explain4 marks

With reference to this information, explain one likely impact of the increase in quantitative easing on aggregate demand.

Mark splitKnowledge 1Application 1Analysis 2

TopicFiscal, monetary and supply-side policy

Question paper p.8 Mark scheme p.10 Examiner report p.3 Open in the tool

Q11Explain4 marks

With reference to the table, explain what is meant by an output gap.

Mark splitKnowledge 2Application 2

TopicEconomic growth

Question paper p.9 Mark scheme p.11 Examiner report p.3 Open in the tool

Section C

Case study

The Australian economy

Extracts: Figure 1: Savings ratio, Q3 2018 to Q3 2020 · Figure 2: Unemployment rate, July 2018 to September 2020 · Extract A: Economic performance · Extract B: Supply-side policies · Figure 1: adapted from https://tradingeconomics.com/australia/personal-savings · Figure 2: adapted from https://tradingeconomics.com/australia/unemployment-rate

In the extracts: Q3 Q4 Q1 Q2, Australia's GDP, JobKeeper Payment, Australian, USA, According, Economic, Savings, Successful, Supply-side

Q12(a)Define2 marks

Define the term 'recession' (Extract A, line 2).

Mark splitKnowledge 2

TopicEconomic growth

Question paper p.11 Mark scheme p.12 Examiner report p.3 Open in the tool

Q12(b)Explain4 marks

With reference to Figure 1, explain what is meant by the savings ratio.

Mark splitKnowledge 2Application 2

TopicNational income, the circular flow and the multiplier

Question paper p.11 Mark scheme p.12 Examiner report p.4 Open in the tool

Q12(c)Analyse6 marks

With reference to the second paragraph of Extract A, analyse two factors that caused household consumption to increase in quarter 3, 2020.

Mark splitKnowledge 2Application 2Analysis 2

TopicAggregate demand

Question paper p.12 Mark scheme p.13 Examiner report p.4 Open in the tool

Q12(d)Examine8 marks

With reference to Figure 2 and Extract A, examine two likely effects of the substantial increase in the rate of unemployment on the Australian economy.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicEconomic growth

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

Q12(e)Discuss14 marks

With reference to Extract B, discuss interventionist supply-side policies that the Australian Government could implement to increase Australia's productivity.

Mark splitEvaluation 6

TopicFiscal, monetary and supply-side policy

Question paper p.16 Mark scheme p.15 Examiner report p.4 Open in the tool Practise the AD/AS diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate the costs of economic growth. Refer to a country of your choice in your answer.

Mark splitEvaluation 8

TopicEconomic growth

Question paper p.19 Mark scheme p.20 Examiner report p.38 Open in the tool

Q14OptionalEvaluate20 marks

Evaluate the costs of a high rate of inflation. Refer to a country of your choice in your answer.

Mark splitEvaluation 8

TopicMacroeconomic objectives and policy conflicts

Question paper p.19 Mark scheme p.23 Examiner report p.4 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 Australian economy

Section D

Other years of Edexcel International AS Unit 2

Topics on this paper