1 mark
ContextThe table below shows the UK Gross Domestic Product (GDP) and population, 2013 to 2015. GDP Population Year (£ millions) (millions)
Define the term ‘Gross Domestic Product’.
AS · June 2018 · Paper 2
The UK Economy – Performance and Policies
80 marks21 questionsExam date 17 May 2018
Questions in exam order
21 total2 marks
ContextThe table below shows the UK Gross Domestic Product (GDP) and population, 2013 to 2015. GDP Population Year (£ millions) (millions)
Calculate the UK’s GDP per capita in 2015. You are advised to show your working.
AS Paper 2, June 2018, Q1(c)Multiple choice
1 mark
ContextThe table below shows the UK Gross Domestic Product (GDP) and population, 2013 to 2015. GDP Population Year (£ millions) (millions)
Which one of the following is the most likely effect of an increase in real GDP per capita?
AIncrease in living standards
BIncrease in unemployment
CLower consumer confidence
DLower purchasing power
1 mark
Define the term ‘recession’.
2 marks
Explain one characteristic of a recession.
AS Paper 2, June 2018, Q2(c)Multiple choice
1 mark
Which point on the trade cycle diagram illustrates a negative output gap?
AB Time A B C D
Diagram needed. Open the original question paper for the diagram
3 marks
ContextUK base interest rate, January 2008 to January 2017 5.5 % …
With reference to the chart above, explain one factor that the Monetary Policy Committee (MPC) of the Bank of England may have considered when reducing the base interest rate.
AS Paper 2, June 2018, Q3(b)Multiple choice
1 mark
ContextUK base interest rate, January 2008 to January 2017 5.5 % …
Which one of the following is the most likely effect of the Bank of England’s quantitative easing?
AA fall in economic growth
BA fall in the money supply
CAn increase in the rate of inflation
DAn increase in unemployment
1 mark
ContextThe diagram below shows the aggregate demand (AD) and short-run aggregate supply (SRAS) for the UK. Price level SRAS P AD Y Real output …
Define the term ‘aggregate demand’.
2 marks
ContextThe diagram below shows the aggregate demand (AD) and short-run aggregate supply (SRAS) for the UK. Price level SRAS P AD Y Real output …
Annotate the diagram above to show the likely impact of a rise in the cost of raw materials on the UK’s equilibrium level of real output and price level.
Diagram needed. Open the original question paper for the diagram
AS Paper 2, June 2018, Q4(c)Multiple choice
1 mark
ContextThe diagram below shows the aggregate demand (AD) and short-run aggregate supply (SRAS) for the UK. Price level SRAS P AD Y Real output …
Which one of the following factors is most likely to cause an increase in the long-run aggregate supply?
ADecrease in investment
BIncrease in relative productivity
CIncrease in the level of unemployment benefits
DReduced access to credit for consumers and businesses
AS Paper 2, June 2018, Q5(a)Multiple choice
1 mark
ContextThe chart below shows selected areas of forecast UK government spending for 2015/16 and 2016/17. 232 Social protection 240 141 Health 145 Education 102 Defence Housing …
Which one of the following can be inferred from the chart? In 2016/17:
Athe change in forecast UK government spending is highest on education
Bthe forecast UK government spending in all areas has fallen from 2015/16
Cthe forecast UK government spending on defence is twice as much as the forecast spending on housing
Dthe percentage change in forecast UK government spending on
2 marks
ContextThe chart below shows selected areas of forecast UK government spending for 2015/16 and 2016/17. 232 Social protection 240 141 Health 145 Education 102 Defence Housing …
In 2016/17 total forecast UK government spending amounted to £772 billion and total forecast tax receipts amounted to £716 billion. Calculate forecast UK government spending on social protection as a percentage of total forecast UK government spending in 2016/17. You are advised to show your working.
1 mark
ContextThe chart below shows selected areas of forecast UK government spending for 2015/16 and 2016/17. 232 Social protection 240 141 Health 145 Education 102 Defence Housing …
Define the term ‘budget deficit’.
4 marks
Case study · The UK economy
With reference to Figure 1, explain one reason why the claimant count and the ILO measure of unemployment differ.
10 marks
Case study · The UK economy
With reference to Extract A, assess the likely macroeconomic effects of an increase in house prices. Use an aggregate demand and aggregate supply diagram in your answer.
Diagram needed. Open the original question paper for the diagram
5 marks
Case study · The UK economy
With reference to the information provided, explain one likely factor, other than changes in house prices, that could influence the level of savings of UK households.
6 marks
Case study · The UK economy
Explain two factors that might cause a rise in the value of the multiplier.
15 marks
Case study · The UK economy
With reference to Extract B and Figure 1, discuss the likely impact of migration on employment and unemployment in the UK.
Optional20 marks
Case study · The UK economy
Evaluate government policies, apart from migration policies, that could be used to increase the employment rate in the UK.
Optional20 marks
Case study · The UK economy
Evaluate the likely impact of high inflation on the UK government’s macroeconomic objectives.
Question text © Pearson Edexcel, quoted for students' private study. Open the official papers and mark schemes from the links on each question.