AQA
A-level
ECONOMICS
7136/2
Paper 2 National and International Economy
Question Paper + Mark scheme [MERGED]
June 2022
,A-level
ECONOMICS
Paper 2 National and International Economy
Time allowed: 2 hours
Materials
For this paper you must have:
• an AQA 12-page answer book
• a calculator.
Instructions
• Use black ink or black ball-point pen. Pencil should only be used for drawing.
• Write the information required on the front cover of your answer book.
The Paper Reference is 7136/2.
• In Section A, answer EITHER Context 1 OR Context 2.
• In Section B, answer ONE essay.
Information
• The marks for questions are shown in brackets.
• The maximum mark for this paper is 80.
• There are 40 marks for Section A and 40 marks for Section B.
Advice
• You are advised to spend 1 hour on Section A and 1 hour on Section B.
IB/M/Jun22/E5 7136/2
, 2
Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
Investment in Africa
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A
Figure 1: Real GDP (US$ bn), selected African Figure 2: Foreign direct investment (FDI) net
nations, 2015–2018 inflows (US$ bn), selected African
nations, 2015–2018
Country 2015 2016 2017 2018 Country 2015 2016 2017 2018
Egypt 250.0 260.9 271.8 286.3 Egypt 6.9 8.1 7.4 8.1
Kenya 52.3 55.4 58.1 61.7 Kenya 0.6 0.7 1.3 1.6
Liberia 2.6 2.6 2.5 2.6 Liberia 0.2 0.3 0.2 0.1
Morocco 113.4 114.6 119.5 123.2 Morocco 3.3 2.2 2.7 3.5
Nigeria 461.8 454.4 458.0 466.9 Nigeria 3.0 4.5 3.5 2.0
Source: World Bank, 2020 Source: World Bank, 2020
Extract B: Foreign direct investment in Africa
In 2018, foreign direct investment (FDI) in Africa rose to $46 billion, an 11% increase on the
previous year. Morocco and Kenya saw some of the biggest rises in FDI, although many
nations in Sub-Saharan and Central Africa experienced falls. Nations with high and stable
growth seem better able to attract FDI inflows.
It was expected that increased rates of economic growth in Africa, along with progress towards 5
the African Continental Free Trade Area (AfCFTA) agreement and key improvements in
infrastructure, would boost FDI. Multinational corporations (MNCs) from developing countries
have been expanding their activities in Africa but investors from developed countries remain
key. French companies are currently the largest investors in Africa, followed by the
Netherlands, the United States and the UK. Africa is a key producer of commodities and with 10
higher demand and rising commodity prices, FDI inflows are expected to increase even further.
The growing number of special economic zones (SEZs) are also likely to help Africa attract
more FDI. SEZs are areas with relaxed trade rules, little regulation and little or no tax on firms
that invest in the zone. This makes locating in a SEZ very appealing to foreign firms. The
creation of these zones has helped to promote development in several Asian economies and 15
many African nations hope to make their economies more business-friendly. There are an
estimated 237 SEZs in the African continent already.
FDI can have many benefits. It should create employment, boost long-run economic growth
and increase exports. SEZs and improving competitiveness should contribute to the
achievement of key macroeconomic objectives and the development of a country’s economy. 20
Source: News reports, 2020
IB/M/Jun22/7136/2
, 3
Extract C: Problems for Africa
It has been said that ‘investing in Africa is only for the brave’. Some of the issues faced by firms
include lack of infrastructure such as poor electricity and transport networks, bureaucracy,
political instability and corruption. African nations’ current share of global trade is only around
3%.
Since African governments began to use SEZs in the early 1970s, they have failed to attract 5
significant investment, to promote exports, or to create sustainable industrial development.
SEZs create distortions in markets, with too much focus on short-term gains. Often, conflicts of
interest occur between host governments and investors. Many MNCs, that have been attracted
to Africa by the SEZs, have been accused of doing little to improve the living standards of the
African people. It has been said that they do not create many jobs, they exploit workers and 10
damage the environment. Too often, profits are not reinvested in Africa but distributed to
shareholders or invested elsewhere.
Some argue that African governments should be doing more to improve the living standards of
their citizens, rather than relying on foreign firms. However, high debts, high unemployment
rates and low tax revenues often make it difficult for the governments of African nations to 15
develop their economies without investment from abroad.
Source: News reports, 2020
0 1 Using the data in Extract A (Figure 1), if 2015 is the base year, calculate the index of
Egypt’s real GDP in 2018.
Give your answer to one decimal place.
[2 marks]
0 2 Explain how the data in Extract A (Figures 1 and 2) show that nations with high and
stable economic growth attract rising foreign direct investment (FDI) inflows.
[4 marks]
0 3 Extract B (lines 18–19) states: ‘FDI can have many benefits. It should create
employment, boost long-run economic growth and increase exports.’
With the help of a suitable diagram, explain how a rise in inward foreign direct investment
(FDI) may lead to increased exports.
[9 marks]
0 4 Extract C (lines 13–14) states: ‘Some argue that African governments should be doing
more to improve the living standards of their citizens, rather than relying on foreign firms.’
Using the data in the extracts and your knowledge of economics, assess the view that to
improve the living standards of their citizens, African nations should pursue policies to
attract foreign direct investment (FDI).
[25 marks]
Turn over ►
IB/M/Jun22/7136/2
A-level
ECONOMICS
7136/2
Paper 2 National and International Economy
Question Paper + Mark scheme [MERGED]
June 2022
,A-level
ECONOMICS
Paper 2 National and International Economy
Time allowed: 2 hours
Materials
For this paper you must have:
• an AQA 12-page answer book
• a calculator.
Instructions
• Use black ink or black ball-point pen. Pencil should only be used for drawing.
• Write the information required on the front cover of your answer book.
The Paper Reference is 7136/2.
• In Section A, answer EITHER Context 1 OR Context 2.
• In Section B, answer ONE essay.
Information
• The marks for questions are shown in brackets.
• The maximum mark for this paper is 80.
• There are 40 marks for Section A and 40 marks for Section B.
Advice
• You are advised to spend 1 hour on Section A and 1 hour on Section B.
IB/M/Jun22/E5 7136/2
, 2
Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
Investment in Africa
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A
Figure 1: Real GDP (US$ bn), selected African Figure 2: Foreign direct investment (FDI) net
nations, 2015–2018 inflows (US$ bn), selected African
nations, 2015–2018
Country 2015 2016 2017 2018 Country 2015 2016 2017 2018
Egypt 250.0 260.9 271.8 286.3 Egypt 6.9 8.1 7.4 8.1
Kenya 52.3 55.4 58.1 61.7 Kenya 0.6 0.7 1.3 1.6
Liberia 2.6 2.6 2.5 2.6 Liberia 0.2 0.3 0.2 0.1
Morocco 113.4 114.6 119.5 123.2 Morocco 3.3 2.2 2.7 3.5
Nigeria 461.8 454.4 458.0 466.9 Nigeria 3.0 4.5 3.5 2.0
Source: World Bank, 2020 Source: World Bank, 2020
Extract B: Foreign direct investment in Africa
In 2018, foreign direct investment (FDI) in Africa rose to $46 billion, an 11% increase on the
previous year. Morocco and Kenya saw some of the biggest rises in FDI, although many
nations in Sub-Saharan and Central Africa experienced falls. Nations with high and stable
growth seem better able to attract FDI inflows.
It was expected that increased rates of economic growth in Africa, along with progress towards 5
the African Continental Free Trade Area (AfCFTA) agreement and key improvements in
infrastructure, would boost FDI. Multinational corporations (MNCs) from developing countries
have been expanding their activities in Africa but investors from developed countries remain
key. French companies are currently the largest investors in Africa, followed by the
Netherlands, the United States and the UK. Africa is a key producer of commodities and with 10
higher demand and rising commodity prices, FDI inflows are expected to increase even further.
The growing number of special economic zones (SEZs) are also likely to help Africa attract
more FDI. SEZs are areas with relaxed trade rules, little regulation and little or no tax on firms
that invest in the zone. This makes locating in a SEZ very appealing to foreign firms. The
creation of these zones has helped to promote development in several Asian economies and 15
many African nations hope to make their economies more business-friendly. There are an
estimated 237 SEZs in the African continent already.
FDI can have many benefits. It should create employment, boost long-run economic growth
and increase exports. SEZs and improving competitiveness should contribute to the
achievement of key macroeconomic objectives and the development of a country’s economy. 20
Source: News reports, 2020
IB/M/Jun22/7136/2
, 3
Extract C: Problems for Africa
It has been said that ‘investing in Africa is only for the brave’. Some of the issues faced by firms
include lack of infrastructure such as poor electricity and transport networks, bureaucracy,
political instability and corruption. African nations’ current share of global trade is only around
3%.
Since African governments began to use SEZs in the early 1970s, they have failed to attract 5
significant investment, to promote exports, or to create sustainable industrial development.
SEZs create distortions in markets, with too much focus on short-term gains. Often, conflicts of
interest occur between host governments and investors. Many MNCs, that have been attracted
to Africa by the SEZs, have been accused of doing little to improve the living standards of the
African people. It has been said that they do not create many jobs, they exploit workers and 10
damage the environment. Too often, profits are not reinvested in Africa but distributed to
shareholders or invested elsewhere.
Some argue that African governments should be doing more to improve the living standards of
their citizens, rather than relying on foreign firms. However, high debts, high unemployment
rates and low tax revenues often make it difficult for the governments of African nations to 15
develop their economies without investment from abroad.
Source: News reports, 2020
0 1 Using the data in Extract A (Figure 1), if 2015 is the base year, calculate the index of
Egypt’s real GDP in 2018.
Give your answer to one decimal place.
[2 marks]
0 2 Explain how the data in Extract A (Figures 1 and 2) show that nations with high and
stable economic growth attract rising foreign direct investment (FDI) inflows.
[4 marks]
0 3 Extract B (lines 18–19) states: ‘FDI can have many benefits. It should create
employment, boost long-run economic growth and increase exports.’
With the help of a suitable diagram, explain how a rise in inward foreign direct investment
(FDI) may lead to increased exports.
[9 marks]
0 4 Extract C (lines 13–14) states: ‘Some argue that African governments should be doing
more to improve the living standards of their citizens, rather than relying on foreign firms.’
Using the data in the extracts and your knowledge of economics, assess the view that to
improve the living standards of their citizens, African nations should pursue policies to
attract foreign direct investment (FDI).
[25 marks]
Turn over ►
IB/M/Jun22/7136/2
