Section C
Evaluate the effectiveness of fiscal policy in reducing income inequality in the UK.
Section B — Data: UK productivity and economic growth
Extract 1: UK output per hour worked grew by around 2% a year in the decade before 2008. Between 2008 and 2023 it grew by only about 7% in total. Business investment as a share of GDP is lower than in most G7 economies.
Extract 2: Real GDP growth was around 0.1% in 2023 and the economy entered a technical recession in the second half of the year. Economists estimated a small negative output gap. Inflation was falling back towards the 2% target, while public sector net debt was close to 100% of GDP.
Extract 3: Proposals to raise growth include planning reform to speed up building of homes and infrastructure, permanent full expensing of investment for tax purposes, more spending on skills and childcare, and closer trading links with the EU.
From Paper 3: Microeconomics and macroeconomics
2(c)12 marks
Discuss whether full expensing of investment is likely to increase the UK's long-run growth.
From Paper 3: Microeconomics and macroeconomics
2(d)25 marks
Evaluate the policies proposed in Extract 3 as ways of raising UK economic growth when public sector net debt is close to 100% of GDP.
Score 0 / 65 · 0 of 4 marked
This paper is written by Plasmo in the style of the Edexcel A-Level Economics exam. It is not a past paper and is not produced or endorsed by the exam board.