Optional25 marks
Case study · The economy of India
Evaluate the microeconomic and macroeconomic effects of rapid increases in population in India.
Specification point 2.3.3 · Theme 2
Long-run AS
Aggregate supply (AS) · The UK economy – performance and policies
Questions tagged to this specification point
19 questions
Essay questions
Long-form evaluation and discussion
Optional25 marks
Case study · Changes in the nature of UK towns and cities
Evaluate the microeconomic and macroeconomic effects of labour shortages in the UK, or a developed economy of your choice.
Optional25 marks
Case study · Turkey – an emerging economy
Evaluate the microeconomic and macroeconomic impact of large infrastructure projects such as the building of a third airport in Istanbul.
Optional25 marks
Case study · The UK economy
Evaluate the microeconomic and macroeconomic effects of a decline in the literacy and numeracy skills of a country’s young workers.
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.
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15 marks
Case study · UK Government spending and inequality
With reference to Extract B, discuss the benefits of an increase in infrastructure spending on the UK economy. Use an aggregate demand and aggregate supply diagram to support your answer.
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8 marks
Case study · The UK economy
Apart from literacy and numeracy skills in young workers, examine one reason for the trend in productivity in the UK, over the period shown in Figure 4.
Short-answer questions
Focused calculations, explanations and diagrams
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.
2 marks
Using the classical long-run aggregate supply curve, explain what will happen in the long run to real output if aggregate demand increases.
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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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4 marks
ContextThe Hong Kong-Zhuhai-Macau Bridge is the world’s longest sea bridge. It reduces the journey time from Hong Kong to Zhuhai from 4 hours to just 30 minutes. It cost the equivalent of $18.8 billion and was government funded.
Draw an aggregate demand and aggregate supply diagram to show the likely impact of this new bridge on the price level and real output in the region.
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1 mark
Illustrate the shape of the Classical long-run aggregate supply (AS) curve on the diagram below.
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2 marks
Explain the reason for the shape of the Classical long-run AS curve.
4 marks
ContextThe International Monetary Fund has called on the G20 group of large industrialised countries to boost government spending on infrastructure.
Draw an aggregate demand and aggregate supply diagram to show the likely impact of an increase in government spending on infrastructure on a country’s price level and real output.
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1 mark
Illustrate the shape of the Keynesian long-run AS curve on the diagram below.
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2 marks
Explain what is meant by spare capacity in an economy.
2 marks
ContextThe diagram below shows the aggregate demand (AD) and a possible long-run aggregate supply (LRAS) for the UK. Price LRAS level AD 0 Real output …
Annotate the diagram above to show the likely impact of government policy to promote business competition on the equilibrium level of real output and price level.
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Multiple-choice questions
Quick checks of economic understanding
A-level Paper 2, November 2021, Q2(a)Multiple choice
1 mark
Which one of the following diagrams illustrates the impact of an increase in net exports along a Keynesian long-run aggregate supply curve?
ADiagram A
BDiagram B
CDiagram C
DDiagram D
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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
Question text © Pearson Edexcel, quoted for students' private study. Open the official papers and mark schemes from the links on each question.