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J205 Economics Paper2 QP

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3K views24 pages

J205 Economics Paper2 QP

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yashwantrsunkara

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You are on page 1/ 24

rajeshikha@gmail.

com - Shikha - Gupta

Oxford Cambridge and RSA

Tuesday 21 May 2024 – Morning

GCSE (9–1) Economics
J205/02 National and International Economics
Time allowed: 1 hour 30 minutes

You can use:

* 1 3 7 3 4 9 2 9 2 7 *

• a scientific or graphical calculator

• an HB pencil

* J 2 0 5 0 2 *

Please write clearly in black ink. Do not write in the barcodes.

Centre number Candidate number

First name(s)

Last name

INSTRUCTIONS
• Use black ink. You can use an HB pencil, but only for graphs and diagrams.
• Write your answer to each question in the space provided. If you need extra space use
the lined pages at the end of this booklet. The question numbers must be clearly shown.
• Answer all the questions.

INFORMATION
• The total mark for this paper is 80.
• The marks for each question are shown in brackets [ ].
• Quality of extended response will be assessed in questions marked with an asterisk (*).
• This document has 24 pages.

ADVICE
• Read each question carefully before you start your answer.

© OCR 2024 [603/0143/0] OCR is an exempt Charity

DC (PQ/SG) 335441/3 Turn over
[email protected] - Shikha - Gupta
2
SECTION A

Write your answer to each question in the box provided.

1 Which statement about GDP per capita is not correct?

A It calculates the output per head of a country’s population

B It can be used to measure the standard of living between countries

C It represents the average income of each person in a country

D It shows a country is in recession if GDP per capita decreases

Your answer [1]

2 The UK uses CPI to measure inflation.

Which statement about CPI is correct?

A It does not include the prices of exports

B It measures the prices of all goods and services in the UK

C It only measures the prices of goods

D The letters CPI stand for customer price index

Your answer [1]

3 Which statement shows a negative externality affecting a worker in the car industry?

A A worker is retrained so they can use new machinery as part of their job

B A worker is unable to get to work due to train drivers being on strike

C A worker loses their job due to increased use of automation

D A worker takes time off to have medical tests provided by their employer

Your answer [1]

© OCR 2024
[email protected] - Shikha - Gupta
3
4 If a country enters into a free trade agreement, it is most likely to lead to a decrease in the

A country’s economic growth

B level of imports

C standard of living in other countries

D unemployment in the country

Your answer [1]

5 The table shows the rate of inflation for 2021 and 2022 in five countries.

2021 (%) 2022 (%)

Country S 4.7 4.1

Country T –2.4 –0.5

Country V 12.3 3.1

Country W 8.1 0.3

Country Z 8.1 –0.1

In which two countries did the general price level decrease between 2021 and 2022?

A Countries S and V

B Countries T and W

C Countries T and Z

D Countries W and Z

Your answer [1]

6 A current account surplus will most likely lead to

A a decrease in the country’s debt

B a decrease in the exchange rate

C a decrease in the rate of inflation

D an increase in unemployment

Your answer [1]

© OCR 2024 Turn over

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4
7 A country is experiencing structural problems which means overpriced and poor-quality goods
being produced.

This will lead to

A a decision to reduce the amount of regulation in the market

B a deficit of the balance of payments on current account

C an increase in the demand for the country’s exports

D the country’s central bank deciding to increase interest rates

Your answer [1]

8 The diagram shows import and export data for the UK from 2017 to 2021.

£bn
750

700

Imports
650
Exports

600

550
2017 2018 2019 2020 2021

What does this diagram show?

A Exports decreased by more than imports between 2019 and 2020

B Exports increased by less than imports between 2020 and 2021

C The demand for UK exports was greater in 2021 than in 2018

D The UK’s imports were always greater than its exports

Your answer [1]

© OCR 2024
[email protected] - Shikha - Gupta
5
9 Education results in positive externalities being generated.
To ensure that these are internalised the UK government provides state education.

What is an opportunity cost of this decision?

A The cost of paying teachers

B The excess demand for health services

C The money spent on producing examinations

D The need to ensure all children attend school

Your answer [1]

10 Why can the life expectancy of the population be used to help measure the development of a
country?

A A larger number of people need to be educated so more teachers are required

B An improved life expectancy will encourage parents to have fewer children

C If people live longer there will be greater demand for health services

D It can help to indicate safety levels in a country are higher due to less conflict

Your answer [1]

11 Which of these is likely to cause a decrease in economic growth?

A A decrease in unemployment

B An increase in infrastructure investment

C Fewer workers coming from the EU

D More government spending on training

Your answer [1]

© OCR 2024 Turn over

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6
12 Which of these is not included in the UK’s balance of payments on current account?

A A Spanish firm buying land in the UK to build a factory

B A UK consumer spending money while on holiday in Greece

C Foreign aid money sent from the UK to a less developed country

D Interest earned by a UK individual from a bank account in France

Your answer [1]

13 A UK producer is currently buying raw materials from the USA for $28 000.
The value of the UK pound (£) in terms of the US Dollar ($) changes from £1 = $1.40 to £1 = $1.25.

What is the price that the UK producer will now have to pay for the raw materials?

A £2400

B £20 000

C £22 400

D £35 000

Your answer [1]

14 In the past 20 years there has been more free movement of goods and greater international
interdependence.

What is this called?

A Globalisation

B International trade

C Specialisation

D Sustainability

Your answer [1]

© OCR 2024
[email protected] - Shikha - Gupta
7
15 Indirect taxation is one policy a government can use to correct negative externalities.

This policy works through the

A demand curve shifting to the right as prices increase

B quantity sold decreasing as the demand curve shifts to the left

C supply curve shifting to the left leading to higher prices

D supply curve shifting to the right as supply decreases

Your answer [1]

16 A government intends to use information provision to encourage the consumption of a good

which has a positive externality.

Why would a policy of information provision be unsuccessful?

A Demand is highly price elastic

B Supply is perfectly price inelastic

C There is a high level of internet use in the country

D There is excess supply of the good

Your answer [1]

17 A benefit for UK producers of international trade is

A an improvement in the current account

B an increase in imported goods and services

C greater variety of goods for consumers

D increased economies of scale in production

Your answer [1]

© OCR 2024 Turn over

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8
18 The diagram shows the value of the UK pound (£) in terms of the Euro (€) from 2013 to 2022.

€/£
1.40

1.35

1.30

1.25

1.20

1.15

1.10

1.05

1.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Which statement is most likely to be correct?

A There was a decrease in the demand for pounds between 2014 and 2016

B There was a decrease in the supply of pounds between 2013 and 2014

C There was a fall in the rate of inflation from 2016 to 2019

D There was a loss of confidence by investors in the UK economy after 2016

Your answer [1]

19 If a group of workers was awarded a 10% pay rise, but their productivity had increased by 6%,
then the most likely result would be

A a fall in consumer confidence

B a fall in government tax revenue

C an increase in consumer debt

D an increase in cost-push inflation

Your answer [1]

© OCR 2024
[email protected] - Shikha - Gupta
9
20 Permission was granted in 2022 for a major road to be rebuilt in Brazil’s Amazon rainforest.

The rebuilt road will help the residents of the largest Amazon city, Manaus, to stay connected to
the rest of Brazil throughout the year.

How is this an example of social sustainability?

A Residents of Manaus will have shorter travel times when visiting friends

B Road repairs will be less expensive for the government in the future

C The firms rebuilding the road will pay increased levels of taxation

D Vehicles will use less fuel as the roads are easier to drive on

Your answer [1]

Section B starts on the next page

© OCR 2024 Turn over

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10
SECTION B

21
Extract 1
UK Employment and Unemployment

% Unemployment rate in the UK: 2000–2021

9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2000 2003 2006 2009 2012 2015 2018 2021

The unemployment rate has fluctuated with changes in economic growth.

Due to family demands, workers are often unable to move to another area to find work, leading
to regional differences in unemployment. A lack of investment in manufacturing industries and in
services reduces job opportunities, which results in long-term, structural unemployment and a fall in
living standards. Depressed regions with high unemployment suffer from a lack of demand that leads
to shops closing and more unemployment and economically inactive people. Both groups need to be
supported with social security benefits.

As long as these unemployed people do not lose their skills, employers may be able to offer lower
wages because of the surplus labour. To reduce unemployment the government may offer training in
new technologies and better infrastructure, such as improved public transport.

Workforce data: 2022

Economically Employed Unemployed Unemployment Economically

active level level rate inactive

(thousands) (thousands) (thousands) (rate %) (rate %)

England 28,781 27,736 1,045 3.63 21.2
North East 1,257 1,204 53 4.22 25.2
South East 4,751 4,608 143 3.01 19.4
Wales 1,502 1,448 55 3.65 24.9
Scotland 2,804 2,705 98 3.50 21.9
Northern Ireland 877 851 26 – 27.7

© OCR 2024
[email protected] - Shikha - Gupta
11
(a) Using Extract 1, explain the trend in the UK unemployment rate between 2008 and 2011.

..........................................................................................................................................................

..................................................................................................................................................... [2]

(b) Using Extract 1, calculate the unemployment rate in Northern Ireland.

Show your working.

Answer ........................................................... [2]

Question continues on the next page

[email protected] - Shikha - Gupta
12
(c) Using the information in Extract 1, analyse how the changes in the UK unemployment rate
between 2011 and 2018 might have affected the government’s budget.

..........................................................................................................................................................

..................................................................................................................................................... [6]

..........................................................................................................................................................

..................................................................................................................................................... [2]

(ii) State two other types of unemployment.

1 .......................................................................................................................................................

2 .......................................................................................................................................................
[2]

[email protected] - Shikha - Gupta
14
(iii)* Evaluate the consequences of unemployment for producers in the North East of England.

Use the information given in Extract 1 and your own knowledge.

..........................................................................................................................................................

..................................................................................................................................................... [6]

DO NOT WRITE ON THIS PAGE

Turn over for next question

[email protected] - Shikha - Gupta
16
22
Extract 2
Income Distribution and Taxes in Indonesia

Distribution of net income in Indonesia

2002 2021
Key:
Top fifth
9% 7%
Fourth fifth
11%
14% Third fifth
40% Second fifth
15% 45%
Bottom fifth
16%

21%
22%

Governments often use direct taxes not only to increase revenue, but also to redistribute income
and wealth. Progressive income taxes charge a higher tax rate on higher incomes, while other
taxes reduce increases in wealth. The distribution of wealth is more unequal than income. Holding
wealth in the form of savings or other assets, such as houses, contributes to a more unequal income
distribution, because of interest payments and capital gains. Wide differences in income and wealth
are often associated with issues such as inequality of opportunities.

Income taxes can be used for public services and for providing social security benefits. Taxation is
also used in both fiscal and supply side policies. A change in taxation policy affects disposable income
and business profits, which results in a significant impact on economic growth and on inflation.

(a) Using Extract 2, calculate the percentage of total net income in 2021 that is received by the
richest 40% of the Indonesian population.
Show your working.

Answer ........................................................... [2]

(b) Using Extract 2, explain how the distribution of income in Indonesia has changed from 2002 to 2021.

..........................................................................................................................................................

..................................................................................................................................................... [2]
© OCR 2024
[email protected] - Shikha - Gupta
17
(c) Using the information in Extract 2, analyse how a decrease in direct taxes can affect the
Indonesian economy.

..........................................................................................................................................................

..................................................................................................................................................... [6]

[email protected] - Shikha - Gupta
18
(d)
(i) Other than income tax, state two types of direct taxes.

1 .......................................................................................................................................................

2 .......................................................................................................................................................
[2]

(ii) Explain how a progressive income tax system redistributes income.

..........................................................................................................................................................

..................................................................................................................................................... [2]

© OCR 2024
[email protected] - Shikha - Gupta
19
(iii)* Evaluate whether raising income tax on the richest 20% of the population in Indonesia would
have a purely beneficial effect for the lower paid.

Use the information given in Extract 2 and your own knowledge.

..........................................................................................................................................................

..................................................................................................................................................... [6]

[email protected] - Shikha - Gupta
20
23
Extract 3
Economic Policies and the Value of the Pound

Supply side spending (selected items) (£ billion)

Government spending 2001–02 2011–12 2021–22

General public services 44.0 76.8 108.6

Health (NHS) 59.8 121.3 216.8

Education 51.2 86.5 100.3

.......... Sum of excluded items .......... 155.0 284.6 425.7

Total government spending 384.0 675.5 952.3

Government spending on education and health provision allows workers to become more productive,
potentially increasing economic output.

When tax revenue does not increase at the same pace as government spending, the government
must borrow to cover its deficit. When government borrowing increases, interest rates may rise.
Monetary policy uses interest rates to affect economic growth through their effect on borrowing for
investment and consumption.

When interest rates in the UK are higher than overseas, the international value of the pound
increases, which may adversely affect UK exports, but should lower the inflation rate.

(a) Using Extract 3, calculate the average amount, in £ billions, spent each year on total government
spending over the period shown in the table.

Answer ........................................................... [2]

(b) Explain how an increase in spending on education can lead to a rise in the rate of economic
growth.

..........................................................................................................................................................

..................................................................................................................................................... [2]

© OCR 2024
[email protected] - Shikha - Gupta
21
(c) Using the information in Extract 3, analyse how a cut in interest rates can affect UK economic
growth.

..........................................................................................................................................................

..................................................................................................................................................... [6]

[email protected] - Shikha - Gupta
22
(d)
(i) Other than economic growth, state two economic objectives that monetary policy can achieve.

1 .......................................................................................................................................................

2 .......................................................................................................................................................
[2]

(ii) Explain how higher interest rates in the UK may lead to the international value of the pound increasing.

..........................................................................................................................................................

..................................................................................................................................................... [2]

© OCR 2024
[email protected] - Shikha - Gupta
23
(iii)* Evaluate the extent to which a rise in the foreign exchange value of the pound could affect UK
consumers and producers.

Use the information given in Extract 3 and your own knowledge.

..........................................................................................................................................................

..................................................................................................................................................... [6]

END OF QUESTION PAPER

If you need extra space use this lined page. You must write the question numbers clearly in the
margin.

..................................................................................................................................................................

Oxford Cambridge and RSA

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For queries or further information please contact The OCR Copyright Team, The Triangle Building, Shaftesbury Road, Cambridge CB2 8EA.
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