Edexcel A Level Economics A Paper 2: The national and global economy June 2019 question paper 9EC0/02

Monthly additions to UK credit card lending, £ billions, 2015 – 2017

(Source: https://www.ukfinance.org.uk/statistics/cards/)

Which one of the following would be most likely to cause an increase in credit card lending?

of payments

Using the chart, calculate an index number for additions to credit card lending in March 2017, using January 2016 as the base. You are advised to show your working.

Explain one possible link between an increase in credit card lending and the rate of inflation.

The International Monetary Fund has called on the G20 group of large industrialised countries to boost government spending on infrastructure.

(Source: https://www.theguardian.com/business/2016/jul/23/ imf-calls-for-more-government-spending-as-rate-cuts-lose-their-impact)

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.

Which one of the following would be an example of government spending on infrastructure?

An increase in:

Unit labour costs for selected European countries, 2017, base year 2010 = 100.

(Source: http://www.oecd-ilibrary.org/economics/data/labour/unit-labour- cost-quarterly-indicators-early-estimates_data-00607-en)

Explain one likely reason for Estonia’s unit labour costs rising faster than in other European countries.

Explain how Estonia’s competitiveness could be affected by rising unit labour costs.

The increase in Austria’s unit labour costs between 2010 and 2017 is:

The UK Government is planning to cut the rate of corporation tax on all pre-tax profits of companies to 17% by 2020.

(Source: adapted from https://www.ft.com/content/ 7579f124-5742-11e7-9fed-c19e2700005f)

This would be an example of:

If a company makes £500 000 pre-tax profit in 2020, calculate how much corporation tax it will pay. Assume that the government cuts the rate of corporation tax as planned.

Explain one possible reason why the revenue from corporation tax could increase if the government cuts the rate of tax.

According to the charity Oxfam, the combined wealth of the 62 richest people in the world is the same as the wealth of the poorest half of the world’s population. The value of the combined wealth of the poorest half of the world’s population has fallen by 38% between 2010 and 2016.

(Source: adapted from https://www.oxfam.org/en/pressroom/pressreleases /2016-01-18/62-people-own-same-half-world-reveals-oxfam-davos-report)

Explain the distinction between income and wealth.

Explain one likely reason why global wealth inequality has increased.

Which one of the following would be most likely to reduce a country’s Gini coefficient?

An increase in:

With reference to Extract A, explain the role of forward markets in currencies.

With reference to Extract A and Figure 1, examine the likely impact of the change in the sterling exchange rate on the UK economy.

With reference to the last paragraph in Extract C, assess the impact of a fall in real incomes on subjective happiness.

With reference to Extract C, discuss the potential conflicts between macroeconomic objectives when the central bank attempts to control inflation.

Discuss whether providing substantial government financial support to banks is the best policy response during a financial crisis.

Three of Africa’s main trading blocs have agreed to form the Tripartite Free Trade Agreement (TFTA). This will create one of the world’s largest free trade areas, stretching across 26 countries with a combined GDP of around £1 trillion.

(Source: https://uk.reuters.com/article/uk-africa-trade/mega-african-trade-bloc-paves-way-for-continental-commerce-idUKKBN0OR28M20150611)

Evaluate the effects of the growth of trading blocs such as the TFTA on global trading patterns.

Japan’s budget deficit for 2017/18 is expected to be 4.6% of GDP. Its national debt is forecast to increase to above 250% of GDP by 2019.

Evaluate the impact of a large fiscal deficit and national debt on a country’s economy.

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