Edexcel A Level Economics A Paper 2: The national and global economy June 2018 question paper 9EC0/02

The trade deal known as the Comprehensive Economic and Trade Agreement (CETA) is designed to eliminate or reduce trade barriers between the European Union (EU) and Canada. It is estimated that it will increase trade by 20% and boost EU GDP by 12 billion euros.

(Source: http://www.theguardian.com/business/2016/oct/30/eu-canada-sign-ceta-free-trade-deal-trudeau-juncker)

Which one of the following is most likely to decrease as a result of CETA?

With reference to the theory of comparative advantage, explain how CETA may increase the GDP of both the EU and Canada.

Which one of the following would be most likely to cause aggregate demand to increase?

A fall in:

Draw an aggregate demand and aggregate supply diagram illustrating the likely impact of a rise in interest rates on the price level and real output.

United States current account of the balance of payments, 1993–2015

(Source: http://data.worldbank.org/indicator/BN.CAB.XOKA. CD?end=2015&locations=US&start=1993)

Calculate the percentage change in the United States current account deficit on the balance of payments between 1998 and 2006.

Explain the term ‘current account of the balance of payments’.

Using the chart on page 6, which one of the following may be inferred about the United States balance of payments?

The UK has experienced a budget deficit since 2001. The government aimed to reach a budget surplus by 2019, but in 2016 this target was abandoned.

(Source: adapted from https://www.gov.uk/government/news/autumn-statement-2016-some-of-the-things-weve-announced)

Explain one likely reason why the 2019 budget surplus target was abandoned.

Explain the likely impact of abandoning the budget surplus target on the UK national debt.

If a government takes decisions to target a budget surplus, this is an example of:

UK total bank lending to individuals, percentage change on previous year

Explain one likely reason why consumer demand for bank loans has increased.

Which one of the following is most likely to result from an increase in bank lending to individuals?

Calculate the index number for the total value of bank lending in 2016 using 2015 as a base year.

With reference to the information provided, explain the distinction between absolute poverty and relative poverty.

With reference to the information provided and your own knowledge, examine two factors that might explain the differing rates of decline in absolute poverty in East Asia and Sub-Saharan Africa.

With reference to Extract A, discuss two macroeconomic policies, apart from protectionism, that a government could use to reduce the negative effects of globalisation.

Assess the view that ‘some level of inequality is desirable to maintain an appropriate incentive structure in the economy’ (Extract B, lines 19 and 20).

Discuss the role of the financial sector in the growth and development of developing countries.

In 2016 the UK Chancellor of the Exchequer announced that the government would spend an extra £23 billion on innovation and infrastructure over the following five years.

Evaluate the likely economic effects of this planned increase in government expenditure.

The British pound fell by over 10% to a 30-year low against the US dollar after the UK voted to leave the European Union.

To what extent will this depreciation impact on future economic growth in the UK?

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