3 marks
ContextBetween 2019 and 2020 the UK Government increased its expenditure on healthcare from £175.1 billion to £219.9 billion.
Explain one likely impact of this interventionist supply-side policy on aggregate supply in the UK.
AS · June 2023 · Paper 2
The UK Economy – Performance and Policies
80 marks19 questionsExam date 22 May 2023
Questions in exam order
19 totalAS Paper 2, June 2023, Q1(b)Multiple choice
1 mark
ContextBetween 2019 and 2020 the UK Government increased its expenditure on healthcare from £175.1 billion to £219.9 billion.
Which one of the following is also an example of an interventionist supply-side policy?
AA decrease in the level of unemployment benefits
BA decrease in the regulation of product markets
CAn increase in the provision of training programmes
DAn increase in the rate of corporation tax
1 mark
ContextThe table below shows the UK’s real GDP per capita, in US dollars, measured at Purchasing Power Parities, 2018 to 2020. Year GDP per capita, US$ …
Define the term ‘GDP per capita’.
AS Paper 2, June 2023, Q2(b)Multiple choice
1 mark
ContextThe table below shows the UK’s real GDP per capita, in US dollars, measured at Purchasing Power Parities, 2018 to 2020. Year GDP per capita, US$ …
Which one of the following is the most likely effect of the change in real GDP per capita between 2019 and 2020?
ADecrease in living standards
BDecrease in unemployment
CHigher consumer confidence
DHigher price level
2 marks
ContextThe table below shows the UK’s real GDP per capita, in US dollars, measured at Purchasing Power Parities, 2018 to 2020. Year GDP per capita, US$ …
Explain one reason why Purchasing Power Parities (PPPs) are used.
AS Paper 2, June 2023, Q3(a)Multiple choice
1 mark
ContextThe chart below shows areas of UK Government tax revenues for 2021–22. The total tax revenue for the year was £820 billion. Other Government revenue £88 billion Income tax £198 billion Other taxes £84 billion Council tax £40 billion Business rates £24 billion National Insurance £147 billion VAT £151 billion Excise duties £48 billion Corporation tax £40 billion …
Which one of the following can be deduced from the above chart?
ACorporation tax revenue is higher than excise duties
BIncome tax raises less revenue than Value Added Tax (VAT)
CTax revenue from business rates contributes to approximately 3% of the overall government tax revenue
DTax revenue from National Insurance contributions is five times
3 marks
ContextThe chart below shows areas of UK Government tax revenues for 2021–22. The total tax revenue for the year was £820 billion. Other Government revenue £88 billion Income tax £198 billion Other taxes £84 billion Council tax £40 billion Business rates £24 billion National Insurance £147 billion VAT £151 billion Excise duties £48 billion Corporation tax £40 billion …
Total UK Government tax revenue for 2021–22: £820 billion. Total UK Government expenditure for 2021–22: £1 053 billion. Using these figures, explain the likely impact of the above data on the UK Government’s budget balance.
1 mark
ContextThe table below shows the UK business investment, in £ billions, 2019 and 2020. Business Year investment (£ billions)
Define the term ‘investment’.
AS Paper 2, June 2023, Q4(b)Multiple choice
1 mark
ContextThe table below shows the UK business investment, in £ billions, 2019 and 2020. Business Year investment (£ billions)
Assume 2019 is the base year. Which one of the following represents the index number for 2020?
A9.7
B90.3
C109.7
D110.8
2 marks
ContextThe table below shows the UK business investment, in £ billions, 2019 and 2020. Business Year investment (£ billions)
Annotate the aggregate demand (AD) and aggregate supply (AS) diagram below to show the likely impact of a fall in business investment on the equilibrium level of real output and the price level.
Diagram needed. Open the original question paper for the diagram
AS Paper 2, June 2023, Q5(a)Multiple choice
1 mark
ContextThe chart below shows UK real GDP growth rate (%), Quarter 1 (Q1) 2019 to Quarter 3 (Q3) 2021. 17.6 % …
Which one of the following can be deduced from the chart?
AIn Q4 2020 the level of real GDP fell by 16.1 percentage points
BThe price level was rising at a slower rate between Q1 2019 and Q2 2019
CThe UK economy experienced a boom between Q3 2019 and Q1 2020
DThe UK economy experienced a recession in the first six months
3 marks
ContextThe chart below shows UK real GDP growth rate (%), Quarter 1 (Q1) 2019 to Quarter 3 (Q3) 2021. 17.6 % …
With reference to the chart, explain one likely benefit of economic growth to firms.
4 marks
Case study · UK balance of trade and inflation
With reference to Figure 1, explain the term ‘balance of trade in goods and services’.
5 marks
Case study · UK balance of trade and inflation
With reference to Figure 2, explain how the CPI inflation rate is measured. Refer to the concept of weights in your answer.
10 marks
Case study · UK balance of trade and inflation
With reference to Extract A, assess the likely impact of a rise in the value of exports on the UK economy.
6 marks
Case study · UK balance of trade and inflation
With reference to Extract B, explain two reasons for the increase in the rate of UK inflation.
15 marks
Case study · UK balance of trade and inflation
Discuss the likely economic effects of the high rate of UK inflation on consumers and workers.
Optional20 marks
Case study · UK balance of trade and inflation
Evaluate the main influences on the UK’s net trade balance.
Optional20 marks
Case study · UK balance of trade and inflation
Evaluate how interest rates are used to control UK inflation.
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