Oxford Cambridge and RSA
*1859511602*
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 2025 [603/0143/0] DC (DE/CT) 345085/2
OCR is an exempt Charity
Turn over
Section A
Write your answer to each question in the box provided.
1 A government increases its budget deficit.
, 2
What is the most likely cost of this decision?
An increase in:
A debt interest
B exports
C government spending
D unemployment
Your answer
2 The claimant count:
A cannot be used to measure the rate of unemployment
B includes people receiving jobseeker’s allowance
C measures the different causes of unemployment
D uses the CPI to measure the level of unemployment
Your answer
3 What is the most likely cause of structural unemployment?
A Different jobs are available in the summer
B High levels of occupational immobility
C Increased migration into the country
D The closure of some discount food stores
Your answer
4 How might an increase in interest rates affect the economy?
A Decrease unemployment
B Improve price stability
C Increase economic growth
D Increase inflation
Your answer
© OCR 2025
, 3
5 A consumer is planning a holiday.
They found a villa that cost €3480 when the exchange rate was £1 = €1.20.
By the time they booked the villa the exchange rate had changed to £1 = €1.16.
What happened to the Sterling price of the villa for the consumer?
A Decreased by £400
B Decreased by £139.20
C Increased by £100
D Remained unchanged
Your answer
6 What is the most likely cost of globalisation for consumers in developed countries?
A Dominant global brands
B Higher prices
C Increased immigration
D Lower prices
Your answer
7 The UK government sets an inflation target.
What might happen if inflation is above this target?
Interest rates will:
A decrease to discourage saving
B decrease to encourage more investment
C increase to discourage consumer spending
D increase to encourage more borrowing
Your answer
8 What is not a purpose of government spending?
A To ensure everyone has access to health services
B To increase the welfare of the population
C To maintain a balanced current account
© OCR 2025 Turn over
, 4
D To reduce inequality in the distribution of income
Your answer
9 An individual’s only source of income has risen in nominal value but fallen in real
value.
As a result, the individual will
A be unable to buy all the same products
B decide to save more of their income
C have less money to spend
D not have to pay as much direct tax
Your answer
10 The government spends £50bn on a new railway line linking some of the country’s
largest cities.
Why is this an example of a supply side policy?
A Journey times will be improved for people travelling to work
B Many construction companies will achieve greater profits
C The £50bn could have been used to reduce the level of direct taxation
D There will be an increased demand for imported building materials
Your answer
11 The table shows the growth in GDP for a country from 2021 to 2024.
Annual growth in GDP
2021 2.7%
2022 –1.4%
2023 2.3%
2024 1.8%
Which statement is correct?
A The country was in a recession in 2024
B The level of employment is likely to have fallen in 2022
C The level of GDP was at its highest in 2021
D The level of output fell between 2023 and 2024
© OCR 2025
*1859511602*
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 2025 [603/0143/0] DC (DE/CT) 345085/2
OCR is an exempt Charity
Turn over
Section A
Write your answer to each question in the box provided.
1 A government increases its budget deficit.
, 2
What is the most likely cost of this decision?
An increase in:
A debt interest
B exports
C government spending
D unemployment
Your answer
2 The claimant count:
A cannot be used to measure the rate of unemployment
B includes people receiving jobseeker’s allowance
C measures the different causes of unemployment
D uses the CPI to measure the level of unemployment
Your answer
3 What is the most likely cause of structural unemployment?
A Different jobs are available in the summer
B High levels of occupational immobility
C Increased migration into the country
D The closure of some discount food stores
Your answer
4 How might an increase in interest rates affect the economy?
A Decrease unemployment
B Improve price stability
C Increase economic growth
D Increase inflation
Your answer
© OCR 2025
, 3
5 A consumer is planning a holiday.
They found a villa that cost €3480 when the exchange rate was £1 = €1.20.
By the time they booked the villa the exchange rate had changed to £1 = €1.16.
What happened to the Sterling price of the villa for the consumer?
A Decreased by £400
B Decreased by £139.20
C Increased by £100
D Remained unchanged
Your answer
6 What is the most likely cost of globalisation for consumers in developed countries?
A Dominant global brands
B Higher prices
C Increased immigration
D Lower prices
Your answer
7 The UK government sets an inflation target.
What might happen if inflation is above this target?
Interest rates will:
A decrease to discourage saving
B decrease to encourage more investment
C increase to discourage consumer spending
D increase to encourage more borrowing
Your answer
8 What is not a purpose of government spending?
A To ensure everyone has access to health services
B To increase the welfare of the population
C To maintain a balanced current account
© OCR 2025 Turn over
, 4
D To reduce inequality in the distribution of income
Your answer
9 An individual’s only source of income has risen in nominal value but fallen in real
value.
As a result, the individual will
A be unable to buy all the same products
B decide to save more of their income
C have less money to spend
D not have to pay as much direct tax
Your answer
10 The government spends £50bn on a new railway line linking some of the country’s
largest cities.
Why is this an example of a supply side policy?
A Journey times will be improved for people travelling to work
B Many construction companies will achieve greater profits
C The £50bn could have been used to reduce the level of direct taxation
D There will be an increased demand for imported building materials
Your answer
11 The table shows the growth in GDP for a country from 2021 to 2024.
Annual growth in GDP
2021 2.7%
2022 –1.4%
2023 2.3%
2024 1.8%
Which statement is correct?
A The country was in a recession in 2024
B The level of employment is likely to have fallen in 2022
C The level of GDP was at its highest in 2021
D The level of output fell between 2023 and 2024
© OCR 2025
