Unit 2: Macroeconomic performance and policy · WEC12/01

Edexcel International AS Unit 2, October 2023

All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 2 (October 2023), Macroeconomic performance and policy. Case studies: The economy of China. 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

1 Which one of the following will result in a movement along the AS curve?

AAn increase in the cost of raw materials
BA decrease in the cost of energy
CAn increase in the price level
DA decrease in the rate of indirect tax

Show the answer

The answer is C.

TopicAggregate supply

Question paper p.2 Mark scheme p.3 Examiner report p.5 Open in the tool

Q21 mark

Which one of the following is a free market supply-side policy?

AInvestment in education and training
BPrivatisation of state-owned industries
CInvestment in infrastructure projects
DProviding finance for business start-ups

Show the answer

The answer is B.

TopicAggregate demand

Question paper p.2 Mark scheme p.3 Examiner report p.5 Open in the tool

Q31 mark

Ceteris paribus, which one of the following would cause an increase in the value of a country's multiplier?

AAn increase in the marginal propensity to save
BAn increase in the marginal propensity to import
CA decrease in the marginal propensity to tax
DA decrease in the marginal propensity to consume

Show the answer

The answer is C.

TopicAggregate demand

Question paper p.2 Mark scheme p.3 Examiner report p.5 Open in the tool

Q41 mark

4 The diagram shows a country's trend growth rate and its actual growth rate. Real GDP Trend growth rate D Actual growth rate C

ABTime Which one of the following can be deduced from the diagram? A The rate of economic growth is increasing between points A and B
BThere is a negative output gap at point B
CThere is a positive output gap at point C
DThe level of unemployment is increasing between points C and D

Show the answer

The answer is B.

TopicEconomic growth

Question paper p.3 Mark scheme p.3 Examiner report p.5 Open in the tool Practise the economic cycle diagram

Q51 mark

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

ATo act as a lender of last resort
BTo achieve a balanced government budget
CTo change the level of welfare payments
DTo deregulate product and labour markets

Show the answer

The answer is A.

TopicFiscal, monetary and supply-side policy

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

Q61 mark

If 2019 is the base year, which one of the following represents the index number for 2021?

A100.0
B104.6
C114.8
D120.1

Show the answer

The answer is D.

TopicMeasures of economic performance

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

Section B

Q7Explain4 marks

Explain one reason why it is necessary to regularly update the CPI basket of goods and services.

Mark splitKnowledge 1Application 1Analysis 2

TopicMeasures of economic performance

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

Q8Draw4 marks

Draw an AD and SRAS diagram to show the likely impact of this change in the savings ratio on the economy of the USA.

Mark splitKnowledge 1Application 3

TopicNational income, the circular flow and the multiplier

Question paper p.7 Mark scheme p.5 Examiner report p.6 Open in the tool Draw it: AD/AS diagram

Q9Calculate4 marks

Ceteris paribus, calculate the value of aggregate demand for this economy in 2022. Show your workings.

Mark splitKnowledge 1Application 3

TopicAggregate demand

Question paper p.8 Mark scheme p.5 Examiner report p.6 Open in the tool

Q10Explain4 marks

With reference to Guinea, explain one likely impact of higher real incomes on subjective happiness.

Mark splitKnowledge 1Application 1Analysis 2

TopicAggregate demand

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

Q11Explain4 marks

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

Mark splitKnowledge 2Application 2

Question paper p.10 Mark scheme p.7 Examiner report p.6 Open in the tool

Section C

Case study

The economy of China

Extracts: Figure 1: Year on year real GDP growth rate by quarter, Q1 2020 to Q2 2022 · Figure 2: Youth unemployment rate (16 to 24 year olds), as measured by the International Labour · Figure 1: adapted from https://tradingeconomics.com/china/gdp-growth-annual · Figure 2: adapted from · Extract A: adapted from FT,

In the extracts: Q1 Q2 Q3 Q4, Date Youth, Labour Organization, People's Bank, PBoC, GDP, ILO, China's, Chinese, Economic

Q12(a)Define2 marks

Define the term 'real GDP' (Figure 1).

Mark splitKnowledge 2

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.8 Examiner report p.7 Open in the tool

Q12(b)Explain4 marks

With reference to Figure 2, explain how ILO unemployment is measured.

Mark splitKnowledge 2Application 2

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.8 Examiner report p.7 Open in the tool

Q12(c)Analyse6 marks

With reference to Extract A, analyse two causes of China's high youth unemployment rate.

Mark splitKnowledge 2Application 2Analysis 2

TopicMeasures of economic performance

Question paper p.12 Mark scheme p.9 Examiner report p.4 Open in the tool

Q12(d)Examine8 marks

With reference to Extract A, examine how a reflationary fiscal policy will impact China's circular flow of income.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicNational income, the circular flow and the multiplier

Question paper p.12 Mark scheme p.10 Examiner report p.7 Open in the tool

Q12(e)Discuss14 marks

With reference to the information provided and your own knowledge, discuss the likely effects of a reflationary monetary policy on the economy of China.

Mark splitEvaluation 6

TopicFiscal, monetary and supply-side policy

Question paper p.12 Mark scheme p.11 Examiner report p.8 Open in the tool Practise the AD/AS diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate the view that there will always be conflicts between macroeconomic objectives. Refer to a country of your choice in your answer.

Mark splitEvaluation 8

TopicMacroeconomic objectives and policy conflicts

Question paper p.22 Mark scheme p.13 Examiner report p.4 Open in the tool

Q14OptionalEvaluate20 marks

Evaluate possible causes of deflation. Refer to a country of your choice in your answer.

Mark splitEvaluation 8

TopicMacroeconomic objectives and policy conflicts

Question paper p.22 Mark scheme p.16 Examiner report p.9 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 economy of China

Section D

Other years of Edexcel International AS Unit 2

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