AQA GCSE ECONOMICS Paper 2 2021 How the economy works - Question Paper 22nd Nov 2021

GCSE

ECONOMICS

Paper 2 How the economy works

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Section A

Answer all questions in the spaces provided.

For questions with four responses, only one answer per question is allowed.

For each question, completely fill in the circle alongside the appropriate answer.

CORRECT METHOD WRONG METHODS

If you want to change your answer you must cross out your original answer as shown.

If you wish to return to an answer previously crossed out, ring the answer you now wish to select

as shown.

0 1 A budget deficit is best described as which of the following?

[1 mark]

A Where government expenditure is more than government revenue

B Where government revenue is more than government expenditure

C Where the value of exports is greater than the value of imports

D Where the value of imports is greater than the value of exports

0 2 Which of the following is an example of a supply-side policy?

[1 mark]

A Decrease in interest rates

B Decrease in the money supply

C Increase in business taxation

D Increase in training expenditure

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outside the

box

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box 0 3 Which of the following best describes the type of unemployment caused by a general lack

of spending in the economy?

[1 mark]

A Cyclical

B Frictional

C Seasonal

D Structural

0 4 Table 1 shows the Consumer Prices Index (CPI) for an economy.

Table 1

Date CPI

December 2018 114.6

December 2019 118.3

December 2020 123.1

Using Table 1, the annual inflation rate at December 2020 to 1 decimal place is:

[1 mark]

A 3.2%

B 3.7%

C 4.1%

D 4.8%

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outside the

box 0 5 Which of the following pairs of policy changes is the most appropriate response to the

problem of rising inflation and high economic growth?

[1 mark]

Government spending Tax rates

A Decrease Decrease

B Decrease Increase

C Increase Decrease

D Increase Increase

0 6 ‘Using money means that people can buy products now but do not have to pay for them

until sometime in the future.’

Which function of money does the above statement most closely relate to?

[1 mark]

A Means of deferred payment.

B Medium of exchange.

C Store of value.

D Unit of account.

0 7 Which of the following is a direct tax?

[1 mark]

A Excise duty.

B Income tax.

C Sugar tax (on soft drinks).

D Value added tax.

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box 0 8 Which of the following would best reduce income inequality?

[1 mark]

Welfare benefits Personal tax-free

allowances

A Decrease Decrease

B Decrease Increase

C Increase Decrease

D Increase Increase

0 9 Which of the following is the least likely reason for increased globalisation?

[1 mark]

A Faster and cheaper transport links.

B Improvements in communications.

C Increased tariffs and quotas on foreign trade.

D Pressure on businesses to produce in low-wage economies.

1 0 Which of the following identifies the effects a significant increase in the exchange rate will

have on inflation and the current account balance?

[1 mark]

Inflation Current account balance

A Decrease Improve

B Decrease Worsen

C Increase Improve

D Increase Worsen

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box 1 1 State two UK Government economic objectives.

[2 marks]

Objective 1

Objective 2

1 2 Explain one disadvantage of using supply-side policies.

[2 marks]

1 3 Explain one benefit of globalisation to producers from a developed economy.

[2 marks]

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Do not write

outside the

box 1 4 Table 2 shows balance of payments data for an economy.

Table 2

£ billion

Current account balance –14.6

Primary income balance –1.2

Secondary income balance +2.8

1 4 . 1 Using Table 2, calculate the value of the balance of trade in £ billions.

[2 marks]

£

1 4 . 2 Explain one reason why the value of a country’s imports might be larger than the

value of exports.