2010
1
(a) Idea of a downswing/downturn in a business or trade cycle. Economic growth will be
negative. Rising unemployment/job losses. Idea of a period of time (technically two successive
quarters of negative growth, but we shouldn’t expect candidates to be this precise). [2]
(b) Productivity refers to output per factor or input, such as output per worker (1), per period of
time (1). A vague comment on an increase in production/output should get no marks. [2]
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2
(a)
(i) Correctly labelled diagram (price, quantity, demand) (1). Shift of demand curve to the right
(1). [2]
(ii) Possible causes: • rise in income • greater availability of credit to finance borrowing • fall in
interest rate on loans • price of substitute has gone up • price of complement has gone down •
effect of advertising campaign • growth in population • change in tastes and preferences of
consumers in favour of a product. Note that the question asks candidates to identify two causes.
[2]
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5
(a) To pay for: • education • health service • transport • social services/security • housing • local
government • law and order • defence. Part of fiscal policy: • to reduce the level of demand • to
help control inflation • to discourage imports • to maintain a balance of payments equilibrium • to
redistribute income. A maximum mark of 4 if candidate only deals with raising revenue to pay for
expenditure. [6]
(b) Direct taxes: • these take money directly from people’s incomes or from companies’ profits •
they can be progressive in effect • examples include income tax, corporation tax, inheritance
tax, capital gains tax. Indirect taxes: • these are paid when goods and services are bought •
these tend to be regressive in effect • examples include VAT/GST, excise duties. [4]
(c) Direct taxes, such as income tax, are progressive meaning that they take a higher proportion
of income from the rich than the poor. They take into account the ability of people to pay and the
money obtained can then be used to pay for benefits to the poor, such as housing benefits,
unemployment benefits and other types of social security. This wouldn’t apply to indirect taxes
because these are regressive taxes. In other words, they do not take into account the ability to
pay. The question does refer to extent; answers which fail to address this can get no more than
6 marks. [10]
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6
(a) Economic advantages: • large pool of labour • large number of consumers. Economic
disadvantages: • possible burden on limited resources • high rate of unemployment. [4]
(b) Possible reasons: • birth rate • death rate • fertility rate • net migration • living
standards/quality of life • availability of/knowledge about contraception • customs and beliefs •
religion • female employment/career opportunities • age of marriage • medical advances and
healthcare • influences on immigration/emigration, e.g. availability of jobs. Maximum of 3 marks
for identification of reasons. [6]
(c) GDP: • GDP • real GDP • per head/per capita • a rather narrow measure of economic
development/welfare • doesn’t take into account what people can buy with their incomes • does
not take into account the distribution of income, the type of products produced or pollution.
There are other ways of measuring the standard of living, such as the Human Development
Index: • United Nations compilation • has a maximum possible value of 1 • it does incorporate
GDP per capita • also includes access to education and knowledge, measured by the adult
literacy rate and school and college enrolment rates • also includes health, diet and lifestyle,
measured by life expectancy at birth. The question does refer to how effectively, e.g. a
comparison of GDP with alternative approaches; answers which fail to address this can gain no
more than 6 marks. [10]
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2011:
5
(a) A persistent or sustained (1) increase (1) in the general (1) level of prices (1) over a specific
period of time (1).
There must be some reference to prices to gain all three marks.
An answer which focuses on the decline in purchasing power can gain no more than 2 marks.
[3]
2012:
2013:
2014:
2015:
2016:
2017:
2018:
2020:
