Edexcel International AS Unit 2, October 2019

Question paper p.2 Mark scheme p.3 Open in the tool

Q21 mark

Which one of the following is a likely result of this increase in the rate of economic growth?

AAn increase in unemployment
BA decrease in investment
CAn increase in living standards
DA decrease in tax revenues

Show the answer

The answer is C.

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Q31 mark

Which one of the following is also an injection into the circular flow of income?

AIncreased spending on imports
BIncreased spending on exports
CIncreased levels of saving
DIncreased income tax receipts

Show the answer

The answer is B.

TopicNational income, the circular flow and the multiplier

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Q41 mark

Which one of the following is most likely to be associated with a negative output gap?

AHigh unemployment
BHigh business confidence
CAn increase in house prices
DAn increase in wellbeing

Show the answer

The answer is A.

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Q51 mark

Which one of the following was the most likely cause of the change from AD to AD1?

AA decrease in government spending
BAn increase in interest rates
CA decrease in net exports
DAn increase in consumption

Show the answer

The answer is D.

TopicAggregate demand

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

Q61 mark

6 The chart shows a government budget between quarter 3 2013 and quarter 1 2018 ($ billion). $bn 0 -20 -40 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 What can be deduced from this chart?

AThere was a budget surplus in quarter 3 2015
BThere was a budget deficit in quarter 3 2013
CTax receipts exceeded government expenditure in quarter 1 2017
DGovernment expenditure exceeded tax receipts in quarter 3 2015

Show the answer

The answer is A.

TopicFiscal, monetary and supply-side policy

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Section B

Q7Explain4 marks

Explain one possible effect of high rates of unemployment on the public finances of Bosnia and Herzegovina.

Mark splitKnowledge 1Application 1Analysis 2

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Q8Explain4 marks

With reference to the chart, explain the difference between a current account deficit and a current account surplus.

Mark splitKnowledge 2Application 2

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Q9Explain4 marks

Explain one possible impact of increased business confidence on the economy of the UAE.

Mark splitKnowledge 1Application 1Analysis 2

Question paper p.7 Mark scheme p.6 Examiner report p.4 Open in the tool

Q10Draw4 marks

Draw a SRAS and AD diagram to show the possible impact of this increase in consumption on the price level and real output.

Mark splitKnowledge 1Application 3

TopicAggregate demand

Question paper p.8 Mark scheme p.7 Examiner report p.4 Open in the tool Draw it: AD/AS diagram

Q11Calculate4 marks

Using the information above, calculate the change in GDP per capita between 2016 and 2017. Show your workings.

Mark splitKnowledge 1Application 3

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Section C

Case study

The economy of Argentina

Extracts: Figure 1: The base rate of interest for Argentina, April 2013 - April 2018 · Figure 2: Quarterly GDP growth rate (%), 2015 - 2017 · Extract A: The problems facing the economy · Extract B: Improving economic outlook · Figure 1: based on data taken from https://tradingeconomics.com/argentina/interest-rate · Figure 2: based on data taken from https://tradingeconomics.com/argentina/gdp-growth

In the extracts: Q1 Q2 Q3 Q4, Mauricio Marci, Quarterly GDP, South America's, Argentina's, Improving, Inflation, President

Q12(a)Define2 marks

Define the term 'base rate of interest' (Figure 1).

Mark splitKnowledge 2

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Q12(b)Explain4 marks

With reference to Figure 2, explain the term 'recession'.

Mark splitKnowledge 2Application 2

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Q12(c)Analyse6 marks

With reference to Extract B, analyse one possible impact of the fall in the value of the peso on Argentina's current account on the balance of payments.

Mark splitKnowledge 2Application 2Analysis 2

Question paper p.12 Mark scheme p.10 Examiner report p.5 Open in the tool

Q12(d)Examine8 marks

With reference to the information provided, examine the likely impact of inflation on the economy of Argentina.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

Question paper p.14 Mark scheme p.11 Examiner report p.6 Open in the tool Practise the AD/AS diagram

Q12(e)Discuss14 marks

Using the information in Extracts A and B, discuss policies that the Argentinian Government could use to increase consumption.

TopicAggregate demand

Question paper p.16 Mark scheme p.13 Examiner report p.6 Open in the tool Practise the AD/AS diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate the importance of productivity for the rate of economic growth in a country.

Mark splitEvaluation 8

Question paper p.20 Mark scheme p.15 Examiner report p.7 Open in the tool

Q14OptionalEvaluate20 marks

Evaluate the use of supply-side policies as a means of reducing unemployment.

Mark splitEvaluation 8