Optional25 marks
Case study · Changes in the nature of UK towns and cities
Evaluate the microeconomic and macroeconomic effects of falling house prices.
Specification point 2.2.3 · Theme 2
Investment (I)
Aggregate demand (AD) · The UK economy – performance and policies
Questions tagged to this specification point
16 questions
Essay questions
Long-form evaluation and discussion
Optional25 marks
Case study · Chile
With reference to the information provided and your own knowledge, evaluate the microeconomic and macroeconomic impact on Chile’s economy of changes in the level of investment.
Data-response questions
Questions built around exam extracts
12 marks
Case study · The German economy
With reference to Extract B, discuss the impact of the planned investment by Intel in a new semiconductor factory on Germany’s aggregate demand. Use an aggregate demand and aggregate supply diagram in your answer.
Diagram needed. Open the original question paper for the diagram
4 marks
Case study · UK investment and productivity
With reference to Figure 1, explain the term ‘investment’.
6 marks
Case study · UK investment and productivity
With reference to Extract A, explain two influences on the level of UK investment.
12 marks
Case study · The German economy
Discuss the likely impact of investment in new technology on the profitability of firms in Germany, as described in Extract C line 20. Use a cost and revenue diagram to support your answer.
Diagram needed. Open the original question paper for the diagram
5 marks
Case study · UK economic recovery
With reference to Extract A, paragraph 2, explain one likely influence on UK investment.
Short-answer questions
Focused calculations, explanations and diagrams
4 marks
ContextChart: investment in the European Union as a percentage of GDP, January 2019 to October 2021.
With reference to the data, explain one likely effect of the fall in investment in 2020.
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1 mark
ContextBusiness investment fell by 0.5% between Quarter 3 2019 and Quarter 4 2019.
Define the term ‘investment’.
2 marks
ContextBusiness investment fell by 0.5% between Quarter 3 2019 and Quarter 4 2019.
Annotate the aggregate demand (AD) and short-run aggregate supply (SRAS) 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
1 mark
ContextThe table below shows the UK business investment, in £ billions, 2019 and 2020. Business Year investment (£ billions)
Define the term ‘investment’.
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
4 marks
ContextBank of England base interest rate …
With reference to the chart above, explain the likely impact of a reduction in the base interest rate on UK investment.
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Multiple-choice questions
Quick checks of economic understanding
A-level Paper 2, June 2024, Q2(a)Multiple choice
1 mark
ContextChart: investment in the European Union as a percentage of GDP, January 2019 to October 2021.
Which one of the following is the percentage point fall in investment between April 2020 and July 2020?
A0.1
B0.6
C2.1
D8.9
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AS Paper 2, June 2024, Q4(c)Multiple choice
1 mark
ContextBusiness investment fell by 0.5% between Quarter 3 2019 and Quarter 4 2019.
Which one of the following factors might have caused business investment in the UK to fall?
AA decrease in business expectations
BA decrease in government regulations
CAn increase in the demand for exports
DAn increase in the rate of economic growth
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
Question text © Pearson Edexcel, quoted for students' private study. Open the official papers and mark schemes from the links on each question.