AS LEVEL ECONOMICS A: THE UK
ECONOMY: PERFORMANCE AND POLICIES
FINAL TEST 2026 QUESTIONS WITH
CORRECT ANSWERS GRADED A+
◍ Actual Growth.
Answer: Economic growth measured by changes in real GDP.
◍ Aggregate Demand (AD).
Answer: The total level of demand in an economy at any given price at a
moment in time.
◍ What is the acronym to remember macroeconomic indicators?.
Answer: TIGER
◍ What are the macroeconomic indicators?.
Answer: TradeInflationGrowthEmploymentRedistribution of
incomeStability
◍ What are non core macroeconomic objectives?.
Answer: Sound government financesEnvironmental
sustainabilityProductivity growth
◍ Aggregate Supply (AS).
Answer: The total amount of output in the economy at any given price at a
moment in time.
◍ What is the macroeconomic objective for trade?.
Answer: Balanced
◍ Animal Spirits.
Answer: The level of confidence of business owners.
,◍ What is the macroeconomic objective for inflation?.
Answer: Low and stable
◍ What is the inflation target for the UK?.
Answer: 2% +/- 1
◍ What is the macroeconomic objective for growth?.
Answer: Strong sustained and sustainable
◍ What is the macroeconomic objective for employment?.
Answer: Full employment
◍ Balance of Payments.
Answer: A record of all financial dealings over a period of time between
economic agents of one country and another.
◍ What is the macroeconomic objective for redistribution?.
Answer: Fair
◍ Base Year.
Answer: A year chosen as a good comparison in series of data when
building an index; it is automatically given an index figure of 100.
◍ Boom.
Answer: The peak of the business cycle, when growth is high.
◍ Budget.
Answer: Where the government lays out their spending and taxation plans.
◍ What is productivity?.
Answer: output per worker per hour
◍ What is a trade deficit?.
Answer: when a country imports more than it exports
◍ What is a trade surplus?.
Answer: when a country exports more than it imports
◍ What is a current account?.
, Answer: The balance of trade in goods and services
◍ Budget Deficit.
Answer: When the government spends more money than it receives.
◍ What is the circular flow of income?.
Answer: The movement of spending and income across the economy
◍ What are 3 leakages in an economy?.
Answer: SavingsImportsTax
◍ Budget Surplus.
Answer: When the government receives more money than it spends.
◍ What are 3 injections into an economy?.
Answer: Investment Exports Government spending
◍ What is investment?.
Answer: When firms spend on capital goods to increase their productive
capacity
◍ What are the 3 methods to calculate GDP?.
Answer: Output IncomeExpenditure
◍ What is the output method relating to calculating GDP?.
Answer: The value of all final goods and services produced in a year
◍ What is the income method relating to calculating GDP?.
Answer: Adding up all factor incomes in a year
◍ What is the expenditure method relating to calculating GDP?.
Answer: C+I+G+(X-M)
◍ Circular Flow.
Answer: A model of the economy which shows the flow of goods and
services, the factors of production and money around the economy.
◍ Why are index numbers good?.
Answer: To make numbers more appealingTo allow for quick and easy data
comparisons
ECONOMY: PERFORMANCE AND POLICIES
FINAL TEST 2026 QUESTIONS WITH
CORRECT ANSWERS GRADED A+
◍ Actual Growth.
Answer: Economic growth measured by changes in real GDP.
◍ Aggregate Demand (AD).
Answer: The total level of demand in an economy at any given price at a
moment in time.
◍ What is the acronym to remember macroeconomic indicators?.
Answer: TIGER
◍ What are the macroeconomic indicators?.
Answer: TradeInflationGrowthEmploymentRedistribution of
incomeStability
◍ What are non core macroeconomic objectives?.
Answer: Sound government financesEnvironmental
sustainabilityProductivity growth
◍ Aggregate Supply (AS).
Answer: The total amount of output in the economy at any given price at a
moment in time.
◍ What is the macroeconomic objective for trade?.
Answer: Balanced
◍ Animal Spirits.
Answer: The level of confidence of business owners.
,◍ What is the macroeconomic objective for inflation?.
Answer: Low and stable
◍ What is the inflation target for the UK?.
Answer: 2% +/- 1
◍ What is the macroeconomic objective for growth?.
Answer: Strong sustained and sustainable
◍ What is the macroeconomic objective for employment?.
Answer: Full employment
◍ Balance of Payments.
Answer: A record of all financial dealings over a period of time between
economic agents of one country and another.
◍ What is the macroeconomic objective for redistribution?.
Answer: Fair
◍ Base Year.
Answer: A year chosen as a good comparison in series of data when
building an index; it is automatically given an index figure of 100.
◍ Boom.
Answer: The peak of the business cycle, when growth is high.
◍ Budget.
Answer: Where the government lays out their spending and taxation plans.
◍ What is productivity?.
Answer: output per worker per hour
◍ What is a trade deficit?.
Answer: when a country imports more than it exports
◍ What is a trade surplus?.
Answer: when a country exports more than it imports
◍ What is a current account?.
, Answer: The balance of trade in goods and services
◍ Budget Deficit.
Answer: When the government spends more money than it receives.
◍ What is the circular flow of income?.
Answer: The movement of spending and income across the economy
◍ What are 3 leakages in an economy?.
Answer: SavingsImportsTax
◍ Budget Surplus.
Answer: When the government receives more money than it spends.
◍ What are 3 injections into an economy?.
Answer: Investment Exports Government spending
◍ What is investment?.
Answer: When firms spend on capital goods to increase their productive
capacity
◍ What are the 3 methods to calculate GDP?.
Answer: Output IncomeExpenditure
◍ What is the output method relating to calculating GDP?.
Answer: The value of all final goods and services produced in a year
◍ What is the income method relating to calculating GDP?.
Answer: Adding up all factor incomes in a year
◍ What is the expenditure method relating to calculating GDP?.
Answer: C+I+G+(X-M)
◍ Circular Flow.
Answer: A model of the economy which shows the flow of goods and
services, the factors of production and money around the economy.
◍ Why are index numbers good?.
Answer: To make numbers more appealingTo allow for quick and easy data
comparisons
