OCR
GCSE
Economics
H460/02: Macroeconomics
*1354714057*
A Level
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 in Section A, one question in Section B and one question in
Section C.
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 20 pages.
ADVICE
• Read each question carefully before you start your answer.
© OCR 2025 [601/4799/4] DC (CJ/FC) 345195/5
OCR is an exempt Charity
Turn over
Section A
Read the stimulus material and answer all parts of Question 1.
What is the future for Bolivia?
Export tariffs and quotas are imposed by a number of countries. Reducing exports can
increase domestic supply which can affect the price of products sold on the home
market and the country’s tax revenue. It can also affect the supply of the country’s raw
materials available to rival foreign producers.
Both Argentina and Bolivia, impose export tariffs on soya beans. Argentina also imposes an 5
export tariff on lithium, a rare earth metal used in the production of electric cars. Bolivia has the
world’s largest resources of lithium which it is just beginning to extract. Bolivia already mines
gold, silver, nickel and other natural metals. Mining is part of the primary sector. Fig. 1 shows the
, 2
share of the labour force in the different sectors in Argentina and Bolivia in 2021.
Fig. 1
Share of the labour force in the different sectors in Argentina and Bolivia 2021
Primary sector
Secondary sector
Tertiary sector
Argentina Bolivia
5%
27%
28%
49%
63%
24%
Exporting lithium can affect Bolivia’s terms of trade and the current account of its balance of 10
payments. In 2021, Bolivia’s terms of trade were 62 and its index of average export prices was
85.56. In that year, Bolivia had a surplus on its current account. It also had the lowest inflation
rate in South America.
Fig. 2 shows the inflation rate and current account balance as a percentage of GDP of selected
countries in 2021, when the global average inflation rate was 3.5%. 15
Fig. 2 The inflation rate and current account balance as a percentage of GDP of
selected countries 2021
3
Bolivia
2 China
1
0 Canada
0 1 2 3 4 5 6 7
–1 Paraguay
Current account
balance as –2
% of GDP Peru
–3
Bangladesh
–4
–5
–6
Chile
–7
Inflation rate (%)
A current account surplus can put upward pressure on a country’s
exchange rate. There are, however, other influences on a country’s
exchange rate. Bolivia has a fixed exchange rate
© OCR 2025
, 3
against the US dollar. This fixed exchange rate has provided some
certainty and is credited with
helping to keep inflation low. In 2023, speculation put downward pressure
on the exchange rate. Bolivia’s central bank, Banco Central de Bolivia,
intervened to support the value of the boliviano 20
which significantly reduced the country’s foreign exchange reserves.
As well as maintaining the exchange rate, the Banco Central de Bolivia manages the
country’s
national debt. A country’s national debt increases as a result of government budget
deficits.
Bolivia has had a government budget deficit for many years. A relatively high proportion of
Bolivians work in the informal economy and do not pay any income tax. The country has a
relatively low flat rate of income tax of 13%. Some economists suggest that a rise in this
rate of
income tax would increase government tax revenue and reduce the budget deficit. Others
have
suggested that Bolivia should introduce a progressive income tax system. Bolivia has the
highest
income inequality in South America, that is gradually reducing.
Bolivia has a standard rate of VAT of 13%. Additional indirect taxes are imposed on other
products such as cigarettes, alcohol and luxuries, including perfume and cosmetics.
1
(a) Using information from the stimulus material, identify two reasons for imposing export
tariffs.
1. ........................................................................................................................................
.............. .........................................................................................................................
.................................
2. ........................................................................................................................................
..............
........................................................................................................................................
..................
(b) Using Fig. 1, explain how Bolivia’s level of development compared to Argentina’s level
of development in 2021.
........................................................................................................................................
..................
© OCR 2025 Turn over
, 4
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
............. [2]
(c) Calculate Bolivia’s index of average import prices in 2021.
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
............. [2]
(d) Using Fig. 2 and the stimulus material, explain the relationship between the inflation
rate and current account balance of the selected countries in 2021.
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
............. [4]
© OCR 2025
GCSE
Economics
H460/02: Macroeconomics
*1354714057*
A Level
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 in Section A, one question in Section B and one question in
Section C.
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 20 pages.
ADVICE
• Read each question carefully before you start your answer.
© OCR 2025 [601/4799/4] DC (CJ/FC) 345195/5
OCR is an exempt Charity
Turn over
Section A
Read the stimulus material and answer all parts of Question 1.
What is the future for Bolivia?
Export tariffs and quotas are imposed by a number of countries. Reducing exports can
increase domestic supply which can affect the price of products sold on the home
market and the country’s tax revenue. It can also affect the supply of the country’s raw
materials available to rival foreign producers.
Both Argentina and Bolivia, impose export tariffs on soya beans. Argentina also imposes an 5
export tariff on lithium, a rare earth metal used in the production of electric cars. Bolivia has the
world’s largest resources of lithium which it is just beginning to extract. Bolivia already mines
gold, silver, nickel and other natural metals. Mining is part of the primary sector. Fig. 1 shows the
, 2
share of the labour force in the different sectors in Argentina and Bolivia in 2021.
Fig. 1
Share of the labour force in the different sectors in Argentina and Bolivia 2021
Primary sector
Secondary sector
Tertiary sector
Argentina Bolivia
5%
27%
28%
49%
63%
24%
Exporting lithium can affect Bolivia’s terms of trade and the current account of its balance of 10
payments. In 2021, Bolivia’s terms of trade were 62 and its index of average export prices was
85.56. In that year, Bolivia had a surplus on its current account. It also had the lowest inflation
rate in South America.
Fig. 2 shows the inflation rate and current account balance as a percentage of GDP of selected
countries in 2021, when the global average inflation rate was 3.5%. 15
Fig. 2 The inflation rate and current account balance as a percentage of GDP of
selected countries 2021
3
Bolivia
2 China
1
0 Canada
0 1 2 3 4 5 6 7
–1 Paraguay
Current account
balance as –2
% of GDP Peru
–3
Bangladesh
–4
–5
–6
Chile
–7
Inflation rate (%)
A current account surplus can put upward pressure on a country’s
exchange rate. There are, however, other influences on a country’s
exchange rate. Bolivia has a fixed exchange rate
© OCR 2025
, 3
against the US dollar. This fixed exchange rate has provided some
certainty and is credited with
helping to keep inflation low. In 2023, speculation put downward pressure
on the exchange rate. Bolivia’s central bank, Banco Central de Bolivia,
intervened to support the value of the boliviano 20
which significantly reduced the country’s foreign exchange reserves.
As well as maintaining the exchange rate, the Banco Central de Bolivia manages the
country’s
national debt. A country’s national debt increases as a result of government budget
deficits.
Bolivia has had a government budget deficit for many years. A relatively high proportion of
Bolivians work in the informal economy and do not pay any income tax. The country has a
relatively low flat rate of income tax of 13%. Some economists suggest that a rise in this
rate of
income tax would increase government tax revenue and reduce the budget deficit. Others
have
suggested that Bolivia should introduce a progressive income tax system. Bolivia has the
highest
income inequality in South America, that is gradually reducing.
Bolivia has a standard rate of VAT of 13%. Additional indirect taxes are imposed on other
products such as cigarettes, alcohol and luxuries, including perfume and cosmetics.
1
(a) Using information from the stimulus material, identify two reasons for imposing export
tariffs.
1. ........................................................................................................................................
.............. .........................................................................................................................
.................................
2. ........................................................................................................................................
..............
........................................................................................................................................
..................
(b) Using Fig. 1, explain how Bolivia’s level of development compared to Argentina’s level
of development in 2021.
........................................................................................................................................
..................
© OCR 2025 Turn over
, 4
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
............. [2]
(c) Calculate Bolivia’s index of average import prices in 2021.
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
............. [2]
(d) Using Fig. 2 and the stimulus material, explain the relationship between the inflation
rate and current account balance of the selected countries in 2021.
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
..................
........................................................................................................................................
............. [4]
© OCR 2025
