A-level · November 2021 · Paper 2

The National and Global Economy

100 marks20 questions
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20 total
A-level Paper 2, November 2021, Q1(a)Multiple choice
1 mark
ContextAfter the Global Financial Crisis of 2008, the US President introduced expansionary fiscal policies of $800 billion. The International Monetary Fund estimated that the multiplier at the time was approximately 1.5.

Which one of the following is a withdrawal from the circular flow of income?

AExports
BGovernment spending
CInvestment
DTaxation

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2.4.2 · Injections and withdrawals
Injections and withdrawals revision notes
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A-level Paper 2, November 2021, Q1(b)Short answerCalculate
2 marks
ContextAfter the Global Financial Crisis of 2008, the US President introduced expansionary fiscal policies of $800 billion. The International Monetary Fund estimated that the multiplier at the time was approximately 1.5.

Calculate the total final increase in US aggregate demand as a result of the President’s ‘expansionary fiscal policies’, assuming no other changes.

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2.4.4 · The multiplier
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A-level Paper 2, November 2021, Q1(c)Short answerExplain
2 marks
ContextAfter the Global Financial Crisis of 2008, the US President introduced expansionary fiscal policies of $800 billion. The International Monetary Fund estimated that the multiplier at the time was approximately 1.5.

Explain the impact of annual fiscal deficits on the US national debt.

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4.5.3 · Public sector finances
Public sector finances revision notes
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A-level Paper 2, November 2021, Q3(a)Multiple choice
1 mark
ContextBritish pound to US dollar exchange rate (value of one pound in dollars), June 2017 to June …

Which one of the following has been the overall change in the British pound to US dollar exchange rate from 1st January 2018 to 1st January 2019?

AAppreciation
BDepreciation
CDevaluation
DRevaluation

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4.1.8 · Exchange rates
Exchange rates revision notes
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A-level Paper 2, November 2021, Q3(b)Short answerExplain
4 marks
ContextBritish pound to US dollar exchange rate (value of one pound in dollars), June 2017 to June …

Explain the likely impact of the change in the exchange rate of the pound shown in the graph from 1st January 2018 to 1st January 2019 on the UK current account of the balance of payments.

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4.1.8 · Exchange rates4.1.7 · Balance of payments
Exchange rates revision notes Balance of payments revision notes
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A-level Paper 2, November 2021, Q4(a)Short answerExplain
4 marks
ContextA number of business groups have signed an open letter to the UK Government asking it to commit to delivering the full High Speed 2 rail link. This will connect London to the northern cities of Manchester and Leeds at a cost of £56 billion and reduce journey times by as much as 50%.

Explain one likely impact of this project on aggregate supply in the UK.

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2.3.3 · Long-run AS4.5.1 · Public expenditure
Long-run AS revision notes Public expenditure revision notes
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A-level Paper 2, November 2021, Q4(b)Multiple choice
1 mark
ContextA number of business groups have signed an open letter to the UK Government asking it to commit to delivering the full High Speed 2 rail link. This will connect London to the northern cities of Manchester and Leeds at a cost of £56 billion and reduce journey times by as much as 50%.

Government spending on the High Speed 2 rail link is an example of which of the following?

AAutomatic stabilisers
BCapital expenditure
CCurrent expenditure
DTransfer payments

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4.5.1 · Public expenditure
Public expenditure revision notes
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A-level Paper 2, November 2021, Q5(a)Multiple choice
1 mark
ContextGDP at Purchasing Power Parities, Germany and France (nominal, trillions of US dollars) 2010–2017.

From the data in the graph above, which one of the following may be deduced?

AFrance’s rate of inflation was lower than Germany’s in 2017
BGermany’s GDP is smaller than France’s in every year shown
CIn every year that France’s GDP fell compared to the previous year, Germany’s GDP did too
DThe GDP of both Germany and France fell between 2015 and 2016

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2.1.1 · Economic growth
Economic growth revision notes
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A-level Paper 2, November 2021, Q6(a)Data responseCalculate
5 marks

Case study · Trade and aid in Rwanda

Using the data in Figures 1 and 2, calculate the change in the level of total aid funding to Rwanda between 2011 and 2012.

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4.3.3 · Strategies influencing growth and development
Strategies influencing growth and development revision notes
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A-level Paper 2, November 2021, Q6(b)Data responseExamine
8 marks

Case study · Trade and aid in Rwanda

With reference to the information provided, examine two likely benefits for the Rwandan economy of the growth in the country’s population.

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4.3.2 · Factors influencing growth and development
Factors influencing growth and development revision notes
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A-level Paper 2, November 2021, Q6(c)Data responseAssess
10 marks

Case study · Trade and aid in Rwanda

With reference to the information provided, assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018.

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4.3.3 · Strategies influencing growth and development
Strategies influencing growth and development revision notes
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A-level Paper 2, November 2021, Q6(d)Data responseDiscuss
12 marks

Case study · Trade and aid in Rwanda

Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the tariff on imports of second-hand clothes. Use an appropriate diagram to support your answer.

Diagram needed. Open the original question paper for the diagram

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4.1.6 · Restrictions on free trade
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A-level Paper 2, November 2021, Q6(e)Data responseDiscuss
15 marks

Case study · Trade and aid in Rwanda

Discuss policies, other than import tariffs, that the Rwandan government could use to develop its manufacturing industries.

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4.3.3 · Strategies influencing growth and development
Strategies influencing growth and development revision notes
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A-level Paper 2, November 2021, Q7EssayEvaluate
Optional25 marks
ContextThe European Central Bank introduced a new round of quantitative easing (QE) in March 2020, purchasing up to €750 billion of assets. The objective of this QE was to reduce the serious risks to the effectiveness of monetary policy resulting from a significant recession. The European Central Bank’s target for inflation remains at ‘below but close to 2%’.

Evaluate the effectiveness of quantitative easing during ‘a significant recession’.

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2.6.2 · Demand-side policies4.4.3 · Role of central banks
Demand-side policies revision notes Role of central banks revision notes
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A-level Paper 2, November 2021, Q8EssayEvaluate
Optional25 marks
ContextIt has been estimated that if climate change led to the world’s temperature rising 2.5°C compared to the temperature in 2010, then global GDP per capita would be 15% lower by 2100. If temperatures rise by 4 °C compared to the temperature in 2010, then by 2100 global GDP per capita would decline by more than 30%.

Evaluate the potential trade-offs between environmental protection and other macroeconomic objectives.

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2.6.4 · Conflicts and trade-offs between objectives and policies
Conflicts and trade-offs between objectives and policies revision notes
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