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Actual 2024 AQA AS ECONOMICS 7135/2 Paper Merged Question Paper + Mark Scheme + Insert AQA Please write clearly in block capitals. Centre number Candidate number Surname Forename(s) Candidate signature | declare this is my own work. AS ECONOMICS Paper 2 The National Economy in a Global Context Monday 20 May 2024 Morning Time allowed: 1 hour 30 minutes Materials For this paper you must have: e the Insert Section Mark « a calculator. For Examiner's Use A Instructions B Use black ink or black ball-point pen. Pencil should only be used for drawing. TOTAL Fill in the boxes at the top of this page. Answer all questions in Section A. Answer either Context 1 or Context 2 in Section B. You will need to refer to the Insert provided to answer Section B. You must answer the questions in the spaces provided. Do not write outside the box around each page or on blank pages. If you need extra space for your answer(s), use the lined pages at the end of this book. Write the question number against your answer(s). Do all rough work in this book. Cross through any work you do not want to be marked. Information e The maximum mark for this paper is 70. « The marks for questions are shown in brackets. e No deductions will be made for wrong answers. LC 2 Do not write . outside the Section A box Answer all questions in this section. Only one answer per question is allowed. For each question completely fill in the circle alongside the appropriate answer. CORRECT METHOD le] WRONG METHODS |wlolald) If you want to change your answer you must cross out your original answer as shown. De If you wish to return to an answer previously crossed out, ring the answer you now wish to select as shown. Which one of the following is a measure of productivity? [1 mark] A Employment divided by output B Output of goods per worker C Production multiplied by quantity of labour fo} fo) fo) (2) D Volume of goods produced Between 2021 and 2022, the weight applied to the restaurant and hotels sector in the Consumer Prices Index rose from 97 to 102. As a result of this change, it must be true that [1 mark] A average prices in the restaurant and hotels sector rose by just over 5% [eo] between 2021 and 2022. B restaurant and hotel prices rose by less than the overall average for [es] consumer prices in 2021. C the proportion of average consumer expenditure relating to restaurants and [e] hotels rose in 2022. D total consumer expenditure on restaurant and hotel services was higher in [e] 2022 than in 2021. 02 IB/M/Jun24/7135/2 2 Do not write outside the All other things being equal, which one of the following is the most likely cause of a box reduction in a country’s surplus on its balance of payments on current account? [1 mark] A Adepreciation in the exchange rate fe] B Contractionary fiscal policy fe] C Falling labour productivity [es] D Growth in export markets [eo] Disinflation exists when [1 mark] A an economy experiences a fall in the cost of living. B deflation has occurred for two or more successive quarters. C nominal incomes are rising more slowly than prices. [o} [o} fo) [2] D the price level is rising less quickly than previously. Which one of the following is most likely to cause a rightward shift of the long-run aggregate supply curve? [1 mark] A A fall in the supply of credit B Areduction in geographical immobility of labour C Arise in the cost of new technology [o} [o) fo) [2] D An increase in welfare benefit payments 04 IB/M/Jun24/7135/2 4 Figure 1 shows the rate of unemployment in an economy over a period of time. Rate of unemployment (%) Figure 1 Average rate of unemployment Actual rate of D unemployment Time At which one of the following points was the economy most likely to be in the recovery phase of the economic cycle? A PointA B PointB C Point C D Point D IMI [1 mark] [a] fo] (9) [ol Turn over for the next question Turn over > IB/M/Jun24/7135/2 Do not write outside the box Do not write outside the [1[4] Which one of the following explains the operation of the accelerator process in an box economy? [1 mark] A Increasing investment leads to a rise in aggregate demand B National income increases as a result of rising investment C National income rises as a result of an increase in aggregate demand [0] {0} [0] [o] D Rising national income leads to an increase in investment [1[2] A government is considering how to fund additional spending on healthcare. One option is to raise the rate of tax charged on the whole of firms’ profits from 19% to 25%. All other things being equal, for every 10 firms earning profits of £1 million, by how much could the government increase its spending on healthcare without affecting the budget balance? [1 mark] A £60 000 B £250 000 C £600 000 ) fo &) D £2 500 000 Turn over for the next question Turn over > 07 IB/M/Jun24/7135/2 7 Do not write outside the [1[3] Figure 2 shows the aggregate demand (AD), short-run aggregate supply (SRAS) and box long-run aggregate supply (LRAS) curves for an economy. Figure 2 Price LRAS level SRAS P,|---------- AD, AD, ie) Y; Real national output All other things being equal, which one of the following is the most likely consequence for firms if an increase in government spending shifts the aggregate demand curve from AD, to AD,? [1 mark] A Increase in spare capacity B Less corporation tax is paid C More goods are exported [a] [0] {0} [ol D Shortages of skilled labour Which one of the following statements regarding UK monetary policy is true? [1 mark] A The central bank considers the government's fiscal policy when setting Bank Rate. B The central bank is responsible for setting the rate of corporation tax. C The central bank sets the target rate of inflation as measured by the Consumer Prices Index. [fo] fo} bo D The central bank’s decisions do not affect the government's budget balance. 08 IB/M/Jun24/7135/2 8 10 Do not write outside the Figure 3 shows the demand (D) and supply (S) curves for a good in a market. box Figure 3 Price Po Py fe) Q Q, Quantity The diagram shows a shift of the supply curve for the good from S, to S, caused by the removal of a subsidy. All other things being equal, which one of the following is the most likely consequence of this action? [1 mark] A Achange in the pattern of economic activity B Adecrease in the budget surplus C Areduction in the balance of payments deficit D An increase in direct tax revenue [0] {0} fo] [o] IB/M/Jun24/7135/2 10 11 Do not write outside the Between October 2022 and July 2023, the value of the US Dollar (US$) in terms box of the Swiss Franc (CHF) changed from US$ 1 = CHF 1 to US$ 1 = CHF 0.87. All other things being equal, this means that A the Swiss Franc and the US Dollar are no longer in equilibrium. B the Swiss Franc has become weaker against the US Dollar. C the volume of exports from Switzerland to the USA is likely to increase. D the volume of imports to Switzerland from the USA is likely to increase. [1 mark] [=] [=] [2] [=] Table 2 shows the indices of labour productivity and real GDP for Country A and Country B for 2 years. Table 2 Index of labour productivity Index of real GDP Year1 Year 2 Year 1 Year 2 Country A 100 110 100 120 Country B 100 105 100 110 Which one of the following can be concluded from the data? [1 mark] A In Year 2, labour productivity and real GDP were higher in Country A than Country B. B In Year 2, real GDP per capita was higher in Country A than Country B. C Labour productivity and real GDP grew more quickly in Country A than Country B over the period. D Real GDP per capita grew more quickly in Country A than in Country B. 11 [=] [=] [=] [=] Turn over > IB/M/Jun24/7135/2 11 13 Do not write outside the Section B ‘box Look at the Insert and choose to answer EITHER Context 1 OR Context 2. Answer EITHER Questions 21 to 26 in the spaces below OR Questions 27 to 32 on pages 24 to 32 of this answer booklet. There is a total of 50 marks for either context. Shade the circle below to indicate which context you have answered. (Context [0 [4]©]} {Context [0 [2] =]} CORRECT METHOD [e| WRONG METHODS EITHER Context 1 Total for this context: 50 marks TROUBLING TIMES FOR THE UK ECONOMY Use the Insert provided to study Questions 21 to 26 and Extracts A, B and C, and then answer the questions in the spaces which follow. [2[4] Define ‘Regressive taxes’ Extract C (line 12). [3 marks] Turn over > IB/M/Jun24/7135/2 13 13 14 Do not write outside the [2] 2] A homeowner has an interest-only mortgage of £225 000. The annual interest rate paid box on their mortgage has increased from 2% to 4.3%. Calculate the increase in the amount of interest paid per month to the nearest pound (£). [4 marks] IB/M/Jun24/7135/2 14 16 Do not write outside the Extract B (lines 1—3) states: *...rapid increases in the price of commodities, such as gas box and wheat...led to a 40-year high inflation rate...’. Draw an AD/AS diagram to show how rising commodity prices are likely to affect the macroeconomy. [4 marks] 16 IB/M/Jun24/7135/2 16 17 Do not write outside the [2] 5] Extract B (lines 11-12) states: ‘In response, as inflation rose above the target rate, the box Bank of England's Monetary Policy Committee acted by increasing Bank Rate.’ Explain how an increase in Bank Rate may lead to a reduction in the rate of inflation. [10 marks] Turn over > IB/M/Jun24/7135/2 17 19 Do not write outside the Extract C (lines 17-18) states: ‘These policies could restrict economic growth in the short box term and increase the likelihood of the economy going into recession.’ Use the extracts and your knowledge of economics to evaluate policies that might help an economy to recover from a recession. [25 marks] Turn over > IB/M/Jun24/7135/2 19 20 Do not write outside the box 20 IB/M/Jun24/7135/2 20 
