Edexcel A Level Economics A Paper 2: The national and global economy November 2021 question paper 9EC0/02

After the Global Financial Crisis of 2008, the US President introduced expansionary fiscal policies of $800 billion. The International Monetary Fund estimated that the multiplier at the time was approximately 1.5.

(Source adapted from: https://www.economist.com/the-economist-explains/2016/09/07/ what-is-the-keynesian-multiplier)

Which one of the following is a withdrawal from the circular flow of income?

Calculate the total final increase in US aggregate demand as a result of the President’s ‘expansionary fiscal policies’, assuming no other changes.

Explain the impact of annual fiscal deficits on the US national debt.

Which one of the following diagrams illustrates the impact of an increase in net exports along a Keynesian long-run aggregate supply curve?

Using the classical long-run aggregate supply curve, explain what will happen in the long run to real output if aggregate demand increases.

Explain the likely impact on aggregate demand of a fall in average house prices.

British pound to US dollar exchange rate (value of one pound in dollars), June 2017 to June 2019.

(Source adapted from: https://www.xe.com/currencycharts/?from=GBP&to=USD&view=2Y)

Which one of the following has been the overall change in the British pound to US dollar exchange rate from 1st January 2018 to 1st January 2019?

Explain the likely impact of the change in the exchange rate of the pound shown in the graph from 1st January 2018 to 1st January 2019 on the UK current account of the balance of payments.

A 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%.

(Source adapted from: https://www.theguardian.com/uk-news/2019/jun/22/business-heads-urge-next-pm-to-commit-to-finishing-hs2)

Explain one likely impact of this project on aggregate supply in the UK.

Government spending on the High Speed 2 rail link is an example of which of the following?

GDP at Purchasing Power Parities, Germany and France (nominal, trillions of US dollars) 2010–2017.

(Source: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2017&locations=DE&st art=1970&view=chart)

From the data in the graph above, which one of the following may be deduced?

Germany’s GDP did too

Calculate the percentage change in Germany’s nominal GDP from 2016 to 2017.

Explain one reason why Purchasing Power Parities are used.

Using the data in Figures 1 and 2, calculate the change in the level of total aid funding to Rwanda between 2011 and 2012.

With reference to the information provided, examine two likely benefits for the Rwandan economy of the growth in the country’s population.

With reference to the information provided, assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018.

Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the tariff on imports of second-hand clothes. Use an appropriate diagram to support your answer.

Discuss policies, other than import tariffs, that the Rwandan government could use to develop its manufacturing industries.

The European Central Bank introduced a new round of quantitative easing (QE) in March 2020, purchasing up to €750 billion of assets. The objective of this QE was to reduce the serious risks to the effectiveness of monetary policy resulting from a significant recession. The European Central Bank’s target for inflation remains at ‘below but close to 2%’.

(Source adapted from: https://www.ecb.europa.eu/press/pr/date/2020/html/ecb. pr200318_1~3949d6f266.en.html)

Evaluate the effectiveness of quantitative easing during ‘a significant recession’.

It has been estimated that if climate change led to the world’s temperature rising 2.5 °C compared to the temperature in 2010, then global GDP per capita would be 15% lower by 2100. If temperatures rise by 4 °C compared to the temperature in 2010, then by 2100 global GDP per capita would decline by more than 30%.

(Source adapted from: https://www.nature.com/articles/s41586-018-0071-9)

Evaluate the potential trade-offs between environmental protection and other macroeconomic objectives.

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