OCR A Level Economics Macroeconomics June 2019 question paper H460/02

1 (a) Distinguish between absolute advantage and comparative advantage.

Explain how Fig. 1. illustrates the Harrod-Domar model.

Using Table 1, explain which country’s government made a negative contribution to the country’s aggregate demand.

Using Table 1, calculate Russia’s GDP in 2017.

Using information from the stimulus material, calculate the UK’s marginal propensity to import in 2017.

Using Table 2, evaluate to what extent differences in corporate tax rates explain differences in

foreign direct investment in countries.

* Evaluate whether the growth of emerging economies will benefit the UK economy.

2* In 2018 the Australian government, concerned about the possibility of an economic downturn, used a number of policy measures intended to increase private sector investment.

Evaluate, with the use of an appropriate diagram(s), whether an increase in private sector

investment will help a government achieve its macroeconomic objectives.

3* Cuts to welfare benefits of £2.5bn affected eleven million families in the UK in 2018.

Evaluate, with the use of an appropriate diagram(s), whether a cut in government spending on

welfare benefits will increase income inequality.

4* Over the last twenty years China has experienced rapid economic growth but surveys suggest that this has not increased happiness.

Evaluate whether economic growth increases happiness.

5* In 2018 the UK Prime Minister said she would put financial services at the heart of a new trade deal with the EU.

Evaluate whether the UK financial sector makes a positive contribution to the UK economy.