Unit 2: Macroeconomic performance and policy · WEC12/01

Edexcel International AS Unit 2, October 2021

All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 2 (October 2021), Macroeconomic performance and policy. Case studies: The French 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 most likely to have caused the increase in the unemployment rate between Q1 2020 and Q2 2020?

AReal wage unemployment
BDemand deficient unemployment
CStructural unemployment
DSeasonal unemployment

Show the answer

The answer is B.

TopicMeasures of economic performance

Question paper p.2 Mark scheme p.4 Examiner report p.3 Open in the tool

Q21 mark

Which one of the following correctly describes this economic policy?

AReflationary monetary policy
BDeflationary monetary policy
CReflationary fiscal policy
DDeflationary fiscal policy

Show the answer

The answer is A.

TopicFiscal, monetary and supply-side policy

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

Q31 mark

Ceteris paribus, what was the most likely effect of this increase?

AAggregate demand decreased
BWithdrawals from the circular flow increased
CAggregate supply decreased
DInjections into the circular flow increased

Show the answer

The answer is D.

TopicNational income, the circular flow and the multiplier

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?

AChina had a current account deficit in August 2019
BChina's balance of trade surplus remained the same from January to February 2020
CChina's balance of trade surplus increased from April to May 2020
DThe value of China's exports decreased from February to March 2020

Show the answer

The answer is C.

TopicMeasures of economic performance

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

Q51 mark

5 Which one of the following is most likely to result in an increase in investment?

AAn increase in the rate of corporation tax
BAn increase in the rate of tax relief for investment
CAn increase in the central bank's interest rate
DAn increase in commercial banks' reserve asset (liquidity) requirements

Show the answer

The answer is B.

TopicFiscal, monetary and supply-side policy

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

Q61 mark

Which one of the following can be deduced from the table? GDP per capita was

A$202.77 in Pakistan
B$1 357.07 in India
C$1 887.76 in India
D$12 634.15 in Pakistan

Show the answer

The answer is C.

TopicMeasures of economic performance

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

Section B

Q7Explain4 marks

With reference to the chart, explain one likely impact of the trend in the unemployment rate on Jamaica's economy.

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 a LRAS and AD diagram to show the possible impact of this change in consumer confidence on the average price level and real output level in Australia.

Mark splitKnowledge 1Application 3

TopicAggregate demand

Question paper p.8 Mark scheme p.7 Examiner report p.6 Open in the tool Draw it: AD/AS diagram

Q9Calculate4 marks

Based on this information, calculate the marginal propensity to consume (MPC) in Malaysia. Show your workings.

Mark splitKnowledge 1Application 3

TopicAggregate demand

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

Q10Explain4 marks

Explain one likely impact of a negative output gap on Brazil's economy.

Mark splitKnowledge 1Application 1Analysis 2

TopicEconomic growth

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

Q11Explain4 marks

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

Mark splitKnowledge 2Application 2

TopicMacroeconomic objectives and policy conflicts

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

Section C

Case study

The French economy

Extracts: Figure 1: Quarterly real GDP growth rate, Q2 2017 to Q1 2020 · Figure 2: Consumer Price Index (CPI), weights and annual percentage price changes, June 2020 · Figure 3: CPI inflation rate, January to June 2020 · Extract A: Inflation, trade and demand-side policy · Extract A: adapted from: 'European Central Bank takes its pandemic bond buying to 1.35 trillion euros

In the extracts: Q2 Q3 Q4 Q1, Jan Feb Mar Apr, French GDP, CPI, Energy, Food, France's, Index, Inflation, Manufactured

Q12(a)Define2 marks

Define the term 'recession' (Extract A, line 7).

Mark splitKnowledge 2

TopicMeasures of economic performance

Question paper p.13 Mark scheme p.11 Examiner report p.7 Open in the tool

Q12(b)Explain4 marks

With reference to Figure 2, explain how the CPI inflation rate is calculated.

Mark splitKnowledge 2Application 2

TopicMeasures of economic performance

Question paper p.13 Mark scheme p.11 Examiner report p.7 Open in the tool

Q12(c)Examine8 marks

With reference to Figure 3 and Extract A, examine two likely effects on the French economy of the trend in the inflation rate in 2020.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicMeasures of economic performance

Question paper p.14 Mark scheme p.12 Examiner report p.4 Open in the tool Practise the AD/AS diagram

Q12(d)Analyse6 marks

With reference to Extract A, analyse the likely effect of France's trade balance in April 2020 on its circular flow of income.

Mark splitKnowledge 2Application 2Analysis 2

TopicMeasures of economic performance

Question paper p.16 Mark scheme p.13 Examiner report p.7 Open in the tool

Q12(e)Discuss14 marks

With reference to Extract A and your own knowledge, discuss the likely effects of the ECB's monetary policy on the French economy.

Mark splitEvaluation 6

TopicMeasures of economic performance

Question paper p.18 Mark scheme p.14 Examiner report p.8 Open in the tool Practise the AD/AS diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate whether the exchange rate of a country's currency is the main factor influencing the country's balance of trade.

Mark splitEvaluation 8

TopicMeasures of economic performance

Question paper p.22 Mark scheme p.17 Examiner report p.9 Open in the tool

Q14OptionalEvaluate20 marks

Evaluate whether the costs of economic growth outweigh the benefits.

Mark splitEvaluation 8

TopicEconomic growth

Question paper p.22 Mark scheme p.20 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 French economy

Section D

Other years of Edexcel International AS Unit 2

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