---

---

1

Which statement about money is correct?

9. The macroeconomy (A Level)  →  9.4. Money and banking

10. Government macroeconomic intervention (A Level)  →  10.2. Links between macroeconomic problems and their interrelatedness

Open

2

The table shows the amount of direct taxes that different households in the UK paid in 2017–2018. bottom 20% of households second 20% of households middle 20% of households fourth 20% of households top 20% of households average income (£) 15 300 25 000 34 600 47 600 90 600 direct tax paid (£) 2 000 3 500 6 000 9 500 21 200 Which positive economic statement can be made from the table?

5. Government macroeconomic intervention (AS Level)  →  5.2. Fiscal policy

5. Government macroeconomic intervention (AS Level)  →  5.4. Supply-side policy

4. The Macroeconomy (AS Level)  →  4.2. Introduction to the circular flow of income

Open

3

What does opportunity cost measure?

1. Basic economic ideas and resource allocation (AS Level)  →  1.1. Scarcity, choice and opportunity cost

7. The price system and the microeconomy (A Level)  →  7.4. Private costs and benefits, externalities and social costs and benefits

Open

4

Which term assumes the existence of ‘qualities, knowledge and skills’ that allow an individual to be more productive?

1. Basic economic ideas and resource allocation (AS Level)  →  1.3. Factors of production

Open

5

The diagrams relate to the markets for four different products. In which market would a 10% decrease in demand and simultaneously a 10% increase in supply definitely result in both a fall in equilibrium price and a rise in equilibrium quantity?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

Open

6

The supply of a new drug to relieve muscle pain is very inelastic over a short period of time. The supply of printed newspapers is much more elastic over the same time period. What could explain the difference in elasticity of supply of the drug and printed newspapers in this time period?

2. The price system and the microeconomy (AS Level)  →  2.3. Price elasticity of supply

2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus

Open

7

Which change would cause the supply curve of sugar-sweetened drinks to shift to the right?

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

Open

8

The demand for tablets increases, while the cost of producing them decreases. What will be the effect on the price of tablets and on the quantity supplied?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

Open

9

What is necessary to achieve the best allocation of resources using the price mechanism?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

3. Government microeconomic intervention (AS Level)  →  3.2. Methods and effects of government intervention in markets

2. The price system and the microeconomy (AS Level)  →  2.3. Price elasticity of supply

Open

10

Goods X, Y and Z all have downward-sloping demand curves and upward-sloping supply curves. Good X is in joint supply with good Y and in joint demand with good Z. There is an increase in the demand for good X. What will happen to the prices and sales of goods Y and Z?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

Open

11

What is meant by consumer surplus?

2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus

Open

12

What does the assumption ‘ceteris paribus’ mean when economists analyse the way in which the quantity demanded of a good changes?

1. Basic economic ideas and resource allocation (AS Level)  →  1.2. Economic methodology

2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus

Open

13

The diagram shows the demand curve for a normal product. price quantity O demand W X Y Z Which two points indicate a move from a price inelastic point to a less price inelastic point?

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

7. The price system and the microeconomy (A Level)  →  7.8. Differing objectives and policies of firms

Open

14

The diagram shows the effect on the market for rice of a change in government policy that causes a shift in the supply curve from S1 to S2. K J L M D S1 S2 O quantity price What does the area JKLM represent?

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

Open

15

The table shows four categories of government expenditure over two time periods. category period 1 ($000) period 2 ($000) building of new roads welfare benefits pay of armed forces state pensions By how much had transfer payments changed between periods 1 and 2?

11. International economic issues (A Level)  →  11.1. Policies to correct disequilibrium in the balance of payments

7. The price system and the microeconomy (A Level)  →  7.4. Private costs and benefits, externalities and social costs and benefits

8. Government microeconomic intervention (A Level)  →  8.3. Labour market forces and government intervention

Open

16

Which type of tax used in different countries is a direct tax?

3. Government microeconomic intervention (AS Level)  →  3.2. Methods and effects of government intervention in markets

5. Government macroeconomic intervention (AS Level)  →  5.2. Fiscal policy

Open

17

A government imposes a maximum price on medical face masks, below the market equilibrium. What is the most likely effect of this?

3. Government microeconomic intervention (AS Level)  →  3.2. Methods and effects of government intervention in markets

5. Government macroeconomic intervention (AS Level)  →  5.4. Supply-side policy

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

Open

18

What is not a producer subsidy?

2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus

3. Government microeconomic intervention (AS Level)  →  3.2. Methods and effects of government intervention in markets

1. Basic economic ideas and resource allocation (AS Level)  →  1.1. Scarcity, choice and opportunity cost

Open

19

The diagram shows an aggregate demand (AD) curve. AD X Y O What is measured on the horizontal (axis and the vertical (Y) axis?

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

Open

20

What could explain an improvement in the terms of trade for a country?

6. International economic issues (AS Level)  →  6.1. The reasons for international trade

Open

21

What is a correct description of an aggregate demand (AD) curve?

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

Open

22

The data in the table is extracted from the Singapore Balance of Payments for 2019. $m goods balance +134 000 services balance +8 000 capital and financial account +95 000 balancing item –3 000 What was the value ($m) of the trade balance on the current account in 2019?

6. International economic issues (AS Level)  →  6.3. Current account of the balance of payments

Open

23

A household’s income increased by 3%. Over the same period, the rate of inflation was also 3%. Which statement is correct?

5. Government macroeconomic intervention (AS Level)  →  5.3. Monetary policy

4. The Macroeconomy (AS Level)  →  4.4. Economic growth

5. Government macroeconomic intervention (AS Level)  →  5.2. Fiscal policy

Open

24

A country operates a fixed exchange rate. There is a major fall of international confidence in its government’s economic policies. What is likely to be the result?

6. International economic issues (AS Level)  →  6.4. Exchange rates

11. International economic issues (A Level)  →  11.2. Exchange rates

Open

25

In 2018, the inflation rate in Argentina was over 100%. Which combination correctly identifies the winners and losers during this period?

9. The macroeconomy (A Level)  →  9.1. The circular flow of income

10. Government macroeconomic intervention (A Level)  →  10.3. Effectiveness of policy options to meet all macroeconomic objectives

Open

26

The diagram shows the aggregate demand (AD) and aggregate supply (AS) for a country. The initial equilibrium is at point E. The sum of the price elasticities of demand for imports and exports for this country exceeds one. A devaluation of the country’s exchange rate will cause aggregate demand to change. What will be the new equilibrium?

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

6. International economic issues (AS Level)  →  6.4. Exchange rates

Open

27

In 2000, Japan was Asia’s largest exporter of electrical components, but by 2018 it was ranked 8th. What might explain this change?

11. International economic issues (A Level)  →  11.2. Exchange rates

6. International economic issues (AS Level)  →  6.4. Exchange rates

6. International economic issues (AS Level)  →  6.1. The reasons for international trade

Open

28

Which measure to correct a balance of payments current account deficit would be classified as an expenditure-reducing policy?

11. International economic issues (A Level)  →  11.1. Policies to correct disequilibrium in the balance of payments

6. International economic issues (AS Level)  →  6.5. Policies to correct imbalances in the current account of the balance of payments

Open

29

The diagram shows the AD / AS curves for an economy. price level O real GDP AS1 AS2 AD1 AD2 Y X Which government action is most likely to cause the equilibrium position to move from X to Y?

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

6. International economic issues (AS Level)  →  6.4. Exchange rates

5. Government macroeconomic intervention (AS Level)  →  5.4. Supply-side policy

Open

30

A country is suffering from severe deflation. What is most likely to prevent the deflation from worsening?

9. The macroeconomy (A Level)  →  9.4. Money and banking

9. The macroeconomy (A Level)  →  9.1. The circular flow of income

10. Government macroeconomic intervention (A Level)  →  10.2. Links between macroeconomic problems and their interrelatedness

Open