AS Level Paper 2, June 2018

Q1(a) Give a short definition of Gross Domestic Product.

Q1(b) From 2013–2015 figures for UK output and population, work out GDP per head for 2015.

Q1(c) Choose the probable consequence of real GDP per capita rising (better living standards / more joblessness / weaker confidence / reduced purchasing power).

Q2(a) Give a short definition of a recession.

Q2(b) Describe one feature typical of an economy in recession.

Q2(c) Pick out the position on the trade cycle diagram where a negative output gap exists.

Q3(a) Using the UK base interest rate chart for January 2008 to January 2017, give one consideration behind the Monetary Policy Committee's rate cut.

Q3(b) Select the probable result of quantitative easing by the Bank of England (slower growth / smaller money supply / faster inflation / higher unemployment).

Q4(a) Give a short definition of aggregate demand.

Q4(b) On an AD/SRAS diagram, mark how dearer raw materials shift the UK's equilibrium real output and prices.

Q4(c) Identify what would most plausibly raise long-run aggregate supply (less investment / better relative productivity / more generous benefits / tighter credit).

Q5(a) From the chart of projected UK public spending across 2015/16 and 2016/17, pick the conclusion that follows.

Q5(b) With UK public spending projected at £772bn for 2016/17, express social protection outlay as a share of that total.

Q5(c) Give a short definition of a budget deficit.

Q6(a) Using Figure 1, account for one source of divergence between the claimant count and the ILO unemployment measure.

Q6(b) Drawing on Extract A, assess what rising house prices do to the wider economy, with AD/AS support.

Q6(c) From the data given, explain one influence on UK household saving apart from movements in house prices.

Q6(d) Give two reasons the multiplier's value could become larger.

Q6(e) Discuss how migration affects UK jobs and joblessness, drawing on Extract B and Figure 1.

Q6(f) Evaluate non-migration policy options for lifting the share of UK adults in work.

Q6(g) Evaluate what a high rate of inflation does to the UK's macroeconomic policy goals.