Specification point 4.5.4 · Theme 4

Macroeconomic policies in a global context

Role of the state in the macroeconomy · A global perspective

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A-level Paper 2, June 2025, Q7EssayEvaluate
Optional25 marks
ContextIn January 2023 the UK prime minister, Rishi Sunak, promised to halve inflation by the end of the year. In July 2023 the Bank of England governor, Andrew Bailey, said: “It is crucial that we… return inflation to its 2% target and provide the environment of price stability in which the UK economy can thrive. This is the best contribution monetary policy can make to the prosperity of the United Kingdom.”

Evaluate the possible conflicts between macroeconomic objectives when seeking to control inflation.

2.6.4 · Conflicts and trade-offs between objectives and policies2.1.2 · Inflation2.6.2 · Demand-side policies4.5.4 · Macroeconomic policies in a global context
Conflicts and trade-offs between objectives and policies revision notes Inflation revision notes Demand-side policies revision notes Macroeconomic policies in a global context revision notes
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A-level Paper 2, June 2024, Q7EssayEvaluate
Optional25 marks
ContextIn 2021 Brazil’s current account deficit on the balance of payments was US$46.12 billion. The Central Bank of Brazil intervened to sell its own currency, the real, on September 23rd 2022. This was the first time it has intervened in foreign currency markets since December 2021.

Evaluate macroeconomic policies that could be used to reduce a current account deficit. Refer to a country of your choice in your answer.

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4.5.4 · Macroeconomic policies in a global context4.1.7 · Balance of payments4.1.8 · Exchange rates2.6.2 · Demand-side policies
Macroeconomic policies in a global context revision notes Balance of payments revision notes Exchange rates revision notes Demand-side policies revision notes
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A-level Paper 2, June 2023, Q7EssayEvaluate
Optional25 marks
ContextIn 2022 the value of UK exports fell by 14% compared with 2020. In contrast, the global average increase in exports was 8.2% over the same time period. The UK’s competitiveness also fell, dropping five places from 18th in 2021 to 23rd in 2022 in the world competitiveness rankings.

Evaluate macroeconomic policies that could be used to increase international competitiveness in the UK’s export markets.

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4.1.9 · International competitiveness2.6.3 · Supply-side policies4.5.4 · Macroeconomic policies in a global context
International competitiveness revision notes Supply-side policies revision notes Macroeconomic policies in a global context revision notes
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A-level Paper 2, June 2023, Q8EssayEvaluate
Optional25 marks
ContextUK inflation, as measured by the CPI, rose to 10.1% in the 12 months to July 2022, compared to 2.0% in the 12 months to July 2021.

Evaluate macroeconomic policies, apart from monetary policy, the UK government could use to reduce inflation.

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2.6.2 · Demand-side policies2.6.3 · Supply-side policies2.1.2 · Inflation4.5.4 · Macroeconomic policies in a global context
Demand-side policies revision notes Supply-side policies revision notes Inflation revision notes Macroeconomic policies in a global context revision notes
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