Edexcel A Level Economics A Paper 2: The national and global economy October 2020 question paper 9EC0/02

UK real Gross Domestic Product (GDP), annual percentage change 2014–2017

(Source: https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/ihyp/qna)

Total real UK GDP in 2016 was £200 000 million. With reference to the chart above, calculate the total real UK GDP for 2017. You are advised to show your working.

Explain the term ‘real gross domestic product’.

With reference to the chart on page 2, which one of the following is correct over the period shown?

The planned investment in the redevelopment of Dover Port will cost £115 million. The Chief Executive said it will lead to many ‘new job opportunities for local people and a transformed waterfront experience’ with new cafés, bars, and shops.

(Source adapted from: https://www.kentonline.co.uk/dover/news/docklands‑ redevelopment‑work‑to‑start‑118581/)

If the value of the multiplier is 1.8, which one of the following will be the total increase in GDP from the redevelopment, assuming other things are equal?

Using the example above, explain how the multiplier process leads to an increase in aggregate demand.

In 2018, the International Monetary Fund (IMF) lent Argentina $57 billion as part of a bailout package to help prevent the country’s government defaulting on its debts. This financial crisis also caused significant capital flight out of Argentina’s economy.

(Source adapted from: https://www.ft.com/content/737b48bc‑c1c9‑11e8‑95b1‑d36dfef1b89a)

Explain the role of the IMF in providing financial assistance to countries such as Argentina.

Which one of the following is most likely to happen to Argentina’s currency value as a result of capital flight, assuming it is operating with a floating exchange rate system?

Number of unemployed persons, UK, as measured by the claimant count, thousands

O Oc tc Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2 2 0 0 1 1 7 7 2017 2017 2018 2018 2018 2018 2018 2018 2018 2018 2018

(Source: https://tradingeconomics.com/united‑kingdom/unemployed‑persons)

Calculate the percentage change in the number of UK unemployed persons between April and July 2018. You are advised to show your working.

Explain one likely reason for the increase in the number of people unemployed in the UK over the time period shown.

Which one of the following types of unemployment is most likely to be caused by a technological change in an industry?

The 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.

(Source adapted from: www.theguardian.com)

Draw an aggregate demand and aggregate supply diagram to show the likely impact of this new bridge on the price level and real output in the region.

Which one of the following would be most likely to solve a negative output gap problem in a domestic economy?

An increase in

With reference to Figure 1 and Extract A, explain the likely impact of a Fairtrade scheme on agricultural communities.

Examine two ways, apart from Fairtrade schemes, in which cocoa farmers could boost their incomes despite the falling price of cocoa.

Discuss the problems for the Ivory Coast of dependency on cocoa for a large proportion of their exports. Refer to Figure 2 in your answer.

Nigeria is considering joining the African Continental Free Trade Agreement. Assess policies the Nigerian government could use in response to the concerns of the country’s ‘manufacturers and trade unions’ (Extract B paragraph 3) if they join this trading bloc.

Discuss the likely benefits of increased economic integration for sub‑Saharan African countries.

In 2018, the United States Government cut the corporation tax rate (tax on company profits) from 35% to 21%. Income tax rates for US citizens were also reduced: for example, the top rate of income tax was cut from 39.6% to 37%.

(Source adapted from: https://www.nytimes.com/)

Evaluate the likely impact of cutting tax rates as a policy to increase economic growth.

In terms of income distribution and wealth distribution Brazil is one of the most unequal countries in the world. Its income Gini coefficient is 0.449 and it is ranked number 2 in the world for its wealth inequality.

Evaluate possible economic causes of income and wealth inequalities within a country such as Brazil.

(Source: https://www.gfmag.com/)