Economics

Real GDP in Norland is forecast to rise by 2.8% in 2024 and by 2.4% in 2025; over the same two years the Meridia Union's real GDP is forecast to ri...

The international agency that produced these projections always reports economic growth as the percentage change in real GDP, never as the percenta...

Firms operating in Norland have succeeded in raising their productivity. Drawing an appropriate diagram, explain why this may result in lower price...

Inflation in Norland has been driven largely by buoyant aggregate demand alongside falling unemployment. Assess whether inflation must always impos...

Norland's central bank has held interest rates high for a prolonged period. Assess how far keeping them there is the best available means of bringi...

Explain the meaning of the incidence of an indirect tax and consider how far it is possible for that burden to be shifted from the seller of a good...

Explain the factors that make the price elasticity of supply (PES) of a good elastic or inelastic and consider how far the value of PES is likely t...

With reference to two methods of trade protection, explain the meaning of protectionism and consider the extent to which these two methods may brin...

Distinguish structural unemployment from cyclical unemployment, and discuss how far unemployment of the structural kind is likely to inflict greate...

Assess the extent to which the principle of comparative advantage ought to be the leading consideration when countries decide whether to trade with...

Assess the extent to which subsidising the production of merit goods is the approach a government should take in order to raise the consumption of ...

Assess the extent to which knowledge of income elasticity of demand (YED) is likely to be of greater value than cross elasticity of demand (XED) to...

A government treats low unemployment as one of its macroeconomic objectives. Assess the extent to which supply-side policy is the approach most lik...

Paper 2 (AS)

Paper 2 · Energy policy and the mixed economy, elasticity, classification of goods, unemployment and trade

13 Q

With reference to the evidence in the article, explain whether Petralia can be described as a mixed economy.

The article closes by saying that the opportunity cost of Petralia's new energy policy is high. Explain what is meant by this.

Using the information provided, consider how far consumers in Petralia are likely to gain when electricity is supplied directly by companies that t...

Evaluation 4 marks

Assess the case for and against Petralia using its own crude oil at home to produce electricity rather than selling it abroad.

With the help of an appropriate diagram, assess whether a subsidy that holds down the electricity price in Petralia would bring the country more ga...

Explain, using its formula, what price elasticity of demand (PED) measures, and consider how much the time period allowed for adjustment matters in...

Explain why frictional unemployment and structural unemployment arise, and consider whether an economy could ever expect to remove frictional unemp...

Using examples of your own, explain what distinguishes a free good from a private good (economic good), and consider why drawing this distinction m...

Explain two methods a government can use to restrict imports, and consider whether the two methods you have chosen would differ in how strongly eac...

Structural unemployment and cyclical unemployment both add to the number of people out of work. Assess which of the two is likely to do the greater...

Assess whether knowledge of a product's price elasticity of demand (PED) is more useful to a firm than knowledge of its income elasticity of demand...

Some economists describe healthcare as a public good; others call it a merit good. Assess which of these two classifications fits healthcare better.

Assess whether the government is the main beneficiary of protectionism in a country.

Paper 2

Paper 2 · Exchange rates, tariffs, subsidies and maximum prices, supply-side policy, elasticities, the price mechanism and mixed economies, the circular flow and LRAS, specialisation and free trade, the current account

13 Q

Corvania will raise its average tariff on imported manufactures from 6% to 15%. Explain one likely effect of this on the value of Corvania's imports.

The emergency budget lets the corva depreciate. State what is meant by a depreciation of a currency, and give one effect a weaker corva would have ...

Using a diagram, explain how cutting the subsidy paid to cooking-gas suppliers is likely to affect the market for cooking gas in Corvania, and cons...

Assess whether the reforms to 'the supply side of the economy' planned in Corvania would make every group in Corvania better off.

Corvania plans to abolish its price ceilings on bread, rice and rents. Assess whether the benefits of removing these maximum prices would be greate...

Explain three possible gains from specialisation and free trade, and discuss whether consumers are bound to gain from specialisation and free trade.

Explain the influences on the cross elasticity of demand (XED) of a good and discuss how valuable a knowledge of XED is likely to be to the firm th...

Explain the three functions that price performs in allocating resources and discuss whether the market price of a product will always prevent the p...

Explain the circular flow of income in a closed economy that includes a government sector, and discuss how this flow would be affected if the econo...

Assess whether it is always beneficial for an economy to have a surplus on the current account of its balance of payments.

Assess how far the ability of a government to achieve price stability through fiscal policy depends on the shape of the long-run aggregate supply (...

Assess whether a mixed economy is better served by a relatively large state sector or by a relatively small one.

An economy has entered a period in which real output is falling. Assess whether a firm would find price elasticity of demand (PED) or income elasti...

Paper 2

Paper 2 · Exports of electric motorcycles + essays (determinants of demand and supply restriction, public and merit goods, aggregate demand and LRAS, depreciation and the current account)

13 Q

Using Table 1.1, identify two ways in which sales of electric motorcycles around the world changed between 2020 and 2024.

Suggest two reasons why demand for Daryan's e-motorcycles has grown faster in the Aldoran Union than in Corvessa.

Using a diagram, explain how the Daryan government's payment for every e-motorcycle shipped overseas is likely to affect the price and the quantity...

Evaluation 4 marks

Assess the likely effects on the economy of Velmark, a major motorcycle-producing country in the Aldoran Union, of rising sales of Daryan e-motorcy...

Hollenfeld Motorwerke, a Velmark manufacturer, fears that it will lose e-motorcycle sales in the Aldoran Union to imports from Daryan. Assess how u...

Using examples, explain how a public good differs from a private good, and consider how far it is true that consumers are unable to reject public g...

Explain the effect of a currency depreciation on a country's terms of trade, and consider why such a depreciation may not always be good for the ec...

Using one or more diagrams, explain how a rise in aggregate demand influences real output and the general price level, and consider under what circ...

Leaving aside the price of goji berries themselves, explain three other factors that can influence the demand for goji berries, and consider which ...

Assess whether a rise in government expenditure on merit goods or on public goods will always improve the distribution of income in an economy.

Assess how far small goji berry growers are likely to gain if the supply of goji berries is restricted.

Assess whether a current account deficit on a country's balance of payments must always harm both its consumers and its firms.

Assess whether policies that increase long-run aggregate supply (LRAS) are the most effective way to bring down unemployment.

Paper 2 (AS)

Paper 2 · Monetary policy, inflation and growth; public, merit and demerit goods; income inequality; unemployment; protectionism

13 Q

The article reports that Kestovian workers' real wages rose in 2025. Using Table 1.1, explain how much money wages in Kestovia must have changed du...

Other than changing interest rates, state two monetary policy tools that the Kestovian Reserve Bank could use to bring inflation under control.

Using a diagram, explain how a cut in Kestovia's interest rate could cause the kesta to depreciate, and consider whether the interest rate is the o...

Evaluation 4 marks

Assess whether the possible benefits of Kestovia's economy growing faster than forecast are likely to be greater than the possible costs.

Assess whether a low interest rate on its own is likely to raise aggregate demand in Kestovia.

Explain three economic causes of income inequality in an economy, and consider which of the three is likely to matter most.

Explain how a trade embargo differs from an export subsidy, and consider which of the two is likely to be the more effective means of protection.

Explain how frictional unemployment differs from structural unemployment, and consider which type is likely to do more harm to an economy.

Explain how a public good differs from a merit good, and consider whether education should be classified as a public good or as a merit good.

Assess which would do more to bring down unemployment in an economy: supply-side policy or fiscal policy.

Assess which of two policies, a progressive income tax or a minimum wage, would do more to redistribute income within an economy.

Assess whether a tax or a public information campaign would be the better way to reduce the over-consumption of a demerit good.

Assess whether the case against protectionism is stronger than the case for it.

Paper 4

Paper 4 · Growth, sustainability and externalities + essays

9 Q

With reference to Table 1.1, state how living standards and greenhouse gas emissions per head have been related in Lunavia.

Economists divide goods into normal goods and inferior goods. Using the extract, explain which type of good bus and tram travel appears to be in Lu...

Economists divide goods into normal goods and inferior goods. Using the extract, explain which type of good private cars appear to be in Lunavia.

Using a diagram, consider whether the production of electricity in Lunavia results in a deadweight welfare loss.

Explanation 6 marks

Drawing on the extract and your own economic knowledge, assess whether economic growth and sustainability are in conflict in Lunavia.

Evaluate how far marginal utility theory can account for the fact that the market demand curve for a product slopes downwards.

'Firms in an oligopoly may compete, but they will always gain more by colluding with one another.' Using either a diagram or a game-theory pay-off ...

'If a government understands how both the multiplier and the accelerator work, it can use fiscal policy successfully to eliminate a deflationary ga...

Consider whether policies that reduce expenditure are a better way than policies that switch expenditure to correct a long-lasting current account ...

Paper 4 (A Level)

Paper 4 · Inequality and globalisation + essays

8 Q

Distinguish between equity and equality.

A newspaper quoted in the article argues that much of what is claimed about growing inequality is mistaken. Analyse whether that argument is genuin...

Gini coefficients are quoted in the article. Using a diagram, explain how such a coefficient is obtained from a Lorenz curve and what the relations...

Globalisation runs through the whole of the article. Explain what economists mean by that term, then use the material provided to judge how far it ...

Evaluation 8 marks

A finance minister whose country has run a current account deficit for several years is advised that imposing tariffs is the single most powerful r...

A government reform has made an industry substantially more contestable. Using a suitable diagram, evaluate what this change means for consumers an...

It is often claimed that what workers are paid, and how many of them are hired, is settled mainly by how much labour is offered for work. Using dia...

The central bank of Verandia has been asked by its government to lift the pace at which the economy expands. Using a diagram, evaluate how far the ...

Paper 4 (A Level)

Paper 4 · Interest rates, exchange rates and trade + essays

8 Q

Identify and explain two indicators in the article suggesting that Velmora was in the upswing (expansion) stage of its economic cycle in 2025.

Explain how Velmora's high-street (commercial) banks could assist the VRB in meeting its 2% inflation target.

Consider the extent to which a fall in the value of the ren has helped Velmora's trade balance in goods and services.

Assess how fading expectations of an interest rate cut in Astoria drove the ren to a 30-year low against the Astorian dollar in May 2025.

Assess, using one or more diagrams, whether bigger firms will always produce at a lower average cost than smaller ones.

'Charging separate groups of buyers different prices for an identical product helps the seller but harms the people who buy from it.' With the help...

'Because of the multiplier, a government using expansionary fiscal policy can close a negative output gap with an increase in spending that is smal...

Assess the extent to which heavy borrowing from overseas lenders places low-income countries under a debt burden that they cannot sustain.

Identify from the extract one negative production externality resulting from the operation of the copper smelter.

Paper 4

Paper 4 · Market failure, externalities and monopoly + essays

9 Q

Explanation 1 mark

Explain what economists mean by a negative production externality.

Set out what is meant by each of the following: allocative efficiency; productive efficiency.

Suppose copper producers were obliged to bear the external costs that their operations impose on others. Using a diagram, explain what would then h...

'Wherever one firm comes to dominate a market, consumers are bound to lose out.' Discuss how far you agree with this claim.

'The diminishing marginal utility theory of demand is a sufficient explanation of the downward-sloping market demand curve for every good and servi...

With the help of diagrams, evaluate the view that abnormal profits and losses arise only temporarily and only under perfect competition.

In a single budget, the government of Norlandia puts a 25% tax on goods bought from abroad and cuts the quota of foreign workers allowed to take jo...

Assess whether a rise in a government's budget deficit will necessarily raise a country's rate of economic growth.

Paper 4 (A Level)

Paper 4 · Migration, remittances and development + essays

8 Q

Explain what is meant by absolute poverty.

Large numbers of Maravian workers have left the country to take up jobs overseas. Using an appropriate diagram, explain the likely effect of this o...

The article states that in 2024 Maravians sent home an estimated $9 billion in remittances. Analyse how this inflow of remittances is likely to ben...

Explanation 6 marks

Ministers in Norland have argued that inward migration brings gains to the host economy and nothing else. Judge whether the material presented in t...

Government intervention is the only way to correct the market failure caused by negative externalities such as pollution. Assess, with the help of ...

'How much competition a firm faces depends on nothing other than how hard it is for new rivals to get into its market.' Evaluate this claim, using ...

Evaluate, with the help of a diagram, the effect of a rise in a country's exchange rate on its ability to achieve its macroeconomic objectives.

Economic growth can only occur when an economy has spare capacity and is operating below full employment. Evaluate this statement.

Zanuria's output figures in the article are reported at 2015 prices. Explain why economists regard it as important to value a country's output in t...

Paper 4 (A Level)

Paper 4 · Resources in a developing economy: national income, integration and market structure, living standards; plus essays on externalities and allocative efficiency, wage differentials, exchange rates and MNCs

8 Q

Explanation 3 marks

The article describes large commodity traders that have grown by both horizontal integration and vertical integration. Explain one gain a firm may ...

Describe the differences you would expect to find between the type of market in which the many smallholder cocoa growers sell their crop and the ty...

Explanation 6 marks

Drawing on the evidence in the article, assess how far the expansion of Zanuria's farming and mining sectors has raised the standard of living of i...

Rush-hour road congestion in the capital city of Ardenia means that road space is not being allocated efficiently. Using diagram(s), assess two mea...

In many large firms the average pay of senior executives is over 100 times greater than the average pay of the workers they employ. Evaluate, with ...

The currency of Velmara has lost a substantial part of its value against those of its trading partners. Using diagram(s), evaluate the consequences...

'Wherever a multinational company chooses to set up operations in a poor country, that country is bound to gain from it.' Using diagram(s), evaluat...

Paper 4 (A Level)

Paper 4 · Trade deficits, tariffs, interest rate policy and low-income countries + essays on marginal utility, wage intervention, the quantity theory of money and GNI

8 Q

Explain why the Kestovian government might see the widening deficit on its balance of trade in goods as a problem.

With the help of a diagram, explain how placing higher duties on imported goods leads to expenditure switching in the Kestovian economy.

Consider whether keeping interest rates high will make sure that inflation, employment and output growth are 'all heading the right way' in the Kes...