15 marks
Case study · UK government budget and household consumption
Discuss the factors that might explain why ‘the UK’s forecast long-term trend rate of growth was reduced’ (Extract B lines 9–10).
Specification point 2.5.2 · Theme 2
Output gaps
Economic growth · The UK economy – performance and policies
Questions tagged to this specification point
11 questions
Essay questions
Long-form evaluation and discussion
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Data-response questions
Questions built around exam extracts
5 marks
Case study · The UK economy
With reference to Extract D (line 18), explain the meaning of the term ‘output gap’. Use an aggregate demand and aggregate supply diagram in your answer.
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Short-answer questions
Focused calculations, explanations and diagrams
2 marks
ContextIt was forecast that the UK will experience a positive output gap in 2024.
Explain one reason why it is difficult to measure the size of an output gap in an economy.
2 marks
Explain what is meant by spare capacity in an economy.
1 mark
ContextReal GDP in selected economies (the base year 2008=100)
Illustrate a negative output gap on the diagram below.
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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.
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Multiple-choice questions
Quick checks of economic understanding
AS Paper 2, June 2025, Q3(a)Multiple choice
1 mark
ContextIt was forecast that the UK will experience a positive output gap in 2024.
Which point on the trade cycle diagram illustrates a positive output gap?
APoint A
BPoint B
CPoint C
DPoint D
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AS Paper 2, June 2024, Q1(a)Multiple choice
1 mark
ContextIn 2019 the average annual percentage increase in real Gross Domestic Product (GDP) was 1.7% in developed countries and it was 4.6% in developing countries.
Which one of the following best describes an increase in real GDP?
AActual economic growth
BNegative output gap
CPositive output gap
DPotential economic growth
A-level Paper 2, June 2022, Q4(a)Multiple choice
1 mark
ContextThe trade cycle Real GDP Positive output gap Trend GDP Z Actual GDP Time …
At point Z on the diagram, which one of the following is likely to occur? An increase in:
Aabsolute poverty
Bbudget deficit
Ccyclical unemployment
Dinflation
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A-level Paper 2, November 2020, Q5(b)Multiple choice
1 mark
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.
Which one of the following would be most likely to solve a negative output gap problem in a domestic economy? An increase in
Agovernment funding to the World Bank
Bgovernment spending on foreign aid
Cgovernment spending on public transport
Dincome tax
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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
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