AS Level Paper 2, June 2022

Q1(a) What would the quantitative easing programme of March 2020 most likely produce? (slower growth / lower inflation / larger money supply / more unemployment)

Q1(b) Explain one way inflation responds to a cheaper base rate, given the March 2020 cut taking it to 0.1% from 0.75%.

Q2(a) Give the meaning of 'nominal' (2-mark definition).

Q2(b) From the 2016–2018 UK nominal GDP figures, which value indexes 2016 against a 2017 base? (96.8 / 98.1 / 101.9 / 103.3)

Q2(c) Work out UK nominal GDP per head for 2018 from the output and population figures given.

Q3(a) Using a chart of UK average weekly real and nominal earnings (January 2007 to January 2019), identify which statement can be inferred.

Q3(b) Explain how real incomes and self-reported happiness appear to be linked, referring to the earnings chart.

Q4(a) Give the meaning of an exchange rate (2-mark definition).

Q4(b) Sterling moved from $1.53 in January 2015 to $1.22 by October 2019: which percentage change is that? (0.31% / 20.26% / 25.41% / 79.74%)

Q4(c) Mark up an AD/AS diagram showing how stronger net trade would shift equilibrium real output and prices.

Q5(a) Using a chart of the annual UK CPI inflation rate (January 2016 to September 2019), identify which statement can be deduced.

Q5(b) Give one weakness of the CPI as a gauge of inflation.

Q6(a) Explain what investment means, referring to Figure 1.

Q6(b) Using Extract A, explain two factors shaping how much UK firms invest.

Q6(c) Drawing on Extract A's fourth paragraph, assess how poorly GDP tracks living standards across time.

Q6(d) Give one reason, taken from Extract A, behind ministers' expectation that Britain will outperform Germany and Italy.

Q6(e) Using the material supplied, discuss how a recession would affect the UK economy.

Q6(f) Evaluate the fiscal measures open to ministers should Britain face another recession, as Extract A suggests.

Q6(g) Evaluate which supply-side measures the UK Government might deploy to lift productivity.