Eduqas AS Component 2, June 2025

Using Extract A and a demand and supply diagram(s), outline why rents were forecasted to rise so greatly between 2023 and 2026.

(i) Using Extract C, calculate the difference between the annual interest payments on a house priced at £300 000 for a buyer with a 5% deposit and a buyer with a 40% deposit. Assume that the total sum borrowed remains the same over the year. (ii) Evaluate whether interest rates are the most significant factor that determines the purchase price of houses.

(i) Explain two factors that could increase private sector investment in the UK. (ii) Using Extract D, discuss whether the new-build house market suffers from market failure.

Using the data, discuss whether making homes easier to buy is beneficial to the UK economy.

(i) Using a PPF diagram, outline how large declines in industrial production led to mass unemployment during the Great Depression (line 2). (ii) Assess the possible impact of mass unemployment on the demand for goods with an income elasticity of demand of +2.

Explain how an increase in the US trade surplus could depreciate the currencies of other countries.

Using a diagram or diagrams, explain how a tariff on agricultural goods could affect consumer and producer surplus within the US agriculture market.

Evaluate whether expansionary fiscal policy is an effective method to achieve all government macro-economic policy objectives.

Using the data, assess the importance of the central bank's role in creating monetary and financial stability within an economy.