1 mark
Define the term ‘national income’.
AS · June 2016 · Paper 2
The UK Economy – Performance and Policies
80 marks20 questionsExam date 23 May 2016
Questions in exam order
20 totalAS Paper 2, June 2016, Q1(b)Multiple choice
1 mark
Which one of the following is an injection into the circular flow of income?
ATaxation
BImports
CInvestment
DSaving
2 marks
Define the term ‘circular flow of income’.
2 marks
ContextThe table below shows GDP per capita at purchasing power parities (PPPs) for a selection of European countries in 2013. GDP per capita Country (US$, at PPPs, 2013, rounded) UK 38 500 Spain 33 000 Italy 35 500 …
Define the term ‘purchasing power parities’.
AS Paper 2, June 2016, Q2(b)Multiple choice
1 mark
ContextThe table below shows GDP per capita at purchasing power parities (PPPs) for a selection of European countries in 2013. GDP per capita Country (US$, at PPPs, 2013, rounded) UK 38 500 Spain 33 000 Italy 35 500 …
The Office for National Statistics estimates that the UK population was 64 million in 2013. Using the data, what was the UK’s total GDP in 2013?
A$2 464 000 million
B$2 272 000 million
C$1 662 000 million
D$2 112 000 million
1 mark
ContextThe table below shows GDP per capita at purchasing power parities (PPPs) for a selection of European countries in 2013. GDP per capita Country (US$, at PPPs, 2013, rounded) UK 38 500 Spain 33 000 Italy 35 500 …
Diagram A shows the aggregate demand and aggregate supply for a country. Illustrate actual economic growth on Diagram A.
Diagram needed. Open the original question paper for the diagram
1 mark
ContextThe table below shows claimant count data for the UK. Number of Claimants August …
Define the term ‘claimant count’.
2 marks
ContextThe table below shows claimant count data for the UK. Number of Claimants August …
Calculate the percentage change in the claimant count from August 2014 to February 2015.
AS Paper 2, June 2016, Q3(c)Multiple choice
1 mark
ContextThe table below shows claimant count data for the UK. Number of Claimants August …
Which one of the following is likely to cause a reduction in the claimant count?
AAn increase in the weekly payment for claimants
BA compulsory weekly interview for every claimant
CAn increase in the size of the workforce
DA fall in employment
AS Paper 2, June 2016, Q4(a)Multiple choice
1 mark
ContextFigure 1 shows data on the UK’s balance of trade. Figure 1 – UK’s balance of trade January 2013 to January 2015 £ billion, seasonally adjusted …
Which one of the following can be inferred from Figure 1 in the period shown?
AThe total UK trade deficit was the largest in June 2013
BThe trade in goods was always in surplus between January 2013 and January 2015
CThe total UK trade deficit was the smallest in January 2014
DThe trade in goods deficit was the smallest in June 2013
3 marks
ContextFigure 1 shows data on the UK’s balance of trade. Figure 1 – UK’s balance of trade January 2013 to January 2015 £ billion, seasonally adjusted …
Explain one likely reason for the reduction in the total UK trade deficit in January 2015.
3 marks
ContextIn 2014 the Bank of England estimated the marginal propensity to consume of UK consumers to be 0.5. In 2014 the Chancellor of the Exchequer announced a £15 billion investment programme into UK road infrastructure.
Using the information above, calculate the total increase in national income, resulting from the £15 billion investment.
AS Paper 2, June 2016, Q5(b)Multiple choice
1 mark
ContextIn 2014 the Bank of England estimated the marginal propensity to consume of UK consumers to be 0.5. In 2014 the Chancellor of the Exchequer announced a £15 billion investment programme into UK road infrastructure.
Which one of the following is most likely to cause a rightward shift in the aggregate supply curve?
AA decrease in real output
BA rise in price level
CA fall in price level
DAn increase in productivity
4 marks
Case study · UK incomes, inflation and monetary policy
With reference to Figure 1, explain the term ‘real income’.
10 marks
Case study · UK incomes, inflation and monetary policy
Assess the likely impact of falling real incomes on UK consumers.
5 marks
Case study · UK incomes, inflation and monetary policy
With reference to Extract A, explain the likely effect of a rise in the value of the pound on aggregate demand.
6 marks
Case study · UK incomes, inflation and monetary policy
With reference to the data, explain two likely reasons for the UK’s falling inflation rate.
15 marks
Case study · UK incomes, inflation and monetary policy
With reference to Extracts A and B and your own knowledge, discuss whether the MPC should be concerned about the risk of deflation in the UK economy.
Optional20 marks
Case study · UK incomes, inflation and monetary policy
Evaluate whether the MPC has been successful in controlling the UK’s inflation rate since 2011.
Optional20 marks
Case study · UK incomes, inflation and monetary policy
Evaluate demand-side policy responses to the Global Financial Crisis of 2008.
Question text © Pearson Edexcel, quoted for students' private study. Open the official papers and mark schemes from the links on each question.