Paper 2: National and International Economics

Which one of the following is a macroeconomic objective of the UK government?

Real GDP is GDP adjusted for:

The Consumer Prices Index measures:

Structural unemployment is caused by:

Which one of the following is a measure of income inequality?

Fiscal policy involves changes in:

Which one of the following is an indirect tax?

A budget deficit occurs when:

Who sets Bank Rate in the UK?

Which one of the following is a supply-side policy?

The national minimum wage is an example of:

Economic growth can be harmful when it causes:

Imports are:

A quota is:

The current account of the balance of payments records:

An appreciation of the pound makes UK imports:

Which one of the following is a free trade area?

Which one of the following is a feature of globalisation?

A developing country is likely to have:

The exchange rate is:

Extract D (data are illustrative, written for this paper): Unemployment in the UK rose from 1.3 million to 1.5 million in one year, from a workforce of 33.5 million. Unemployment among 16–24-year-olds is about three times the national rate. The government plans to fund 50,000 extra apprenticeships. Calculate the percentage increase in the number of people unemployed.

Calculate the unemployment rate after the rise, to one decimal place.

Explain one cost of unemployment to individuals.

Explain how apprenticeships could reduce unemployment.

Evaluate whether supply-side policies are better than fiscal policy at reducing youth unemployment.

Extract E (data are illustrative, written for this paper): The richest 20% of UK households have average disposable incomes about 5 times those of the poorest 20%. The government uses progressive income tax and benefits to redistribute income. Some argue a higher minimum wage would reduce inequality. Define 'disposable income'.

Someone earns £40,000. The first £12,570 is tax-free and the rest is taxed at 20%. Calculate the income tax paid.

Explain how a progressive tax reduces income inequality.

Explain one possible disadvantage of raising the minimum wage.

Evaluate whether the government should do more to reduce income inequality.

Extract F (data are illustrative, written for this paper): A developing country exports coffee and cocoa. World coffee prices have fallen 30% in two years. The country imports most of its machinery and medicines. A multinational company plans to build a chocolate factory there. State two features of a developing economy.

Coffee export revenue was $2 billion. If export volumes stay the same, calculate the revenue after a 30% fall in price.

Explain one problem of relying on exports of primary products.

Explain how the chocolate factory could benefit the country.

Evaluate whether globalisation has benefited developing countries.