AQA GCSE ECONOMICS 8136/2 Paper 2 How the Economy Works Version: 1.0 Final *JUN* IB/H/Jun23/E8 8136/2QUESTION PAPER & MARKING SCHEME/ [MERGED] Marl( scheme June 2023

GCSE ECONOMICS 8136/2 Paper 2 How the Economy Works Version: 1.0 Final *JUN* IB/H/Jun23/E8 8136/2 Friday 26 May 2023 Morning Time allowed: 1 hour 45 minutes Materials You will need no other materials. You may use a calculator. Instructions • Use black ink or black ball-point pen. • Fill in the boxes at the top of this page. • Answer all questions. • You must answer the questions in the spaces provided. Do not write on blank pages. • If you need extra space for your answer(s), use the lined pages at the end of this book. Write the question number against your answer(s). • Do all rough work in this book. Cross through any work you do not want to be marked. Information • The marks for questions are shown in brackets. • The maximum mark for this paper is 80. • Questions should be answered in continuous prose. You will be assessed on your ability to: – use good English – organise information clearly – use specialist vocabulary where appropriate. GCSE ECONOMICS Paper 2 How the Economy Works Please write clearly in block capitals. Centre number Candidate number Surname Forename(s) Candidate signature I declare this is my own work. For Examiner’s Use Section Mark A B TOTAL 2 *02* IB/H/Jun23/8136/2 Section A Answer all questions in the spaces provided. For questions with four responses, only one answer per question is allowed. For each question, completely fill in the circle alongside the appropriate answer. CORRECT METHOD WRONG METHODS If you want to change your answer you must cross out your original answer as shown. If you wish to return to an answer previously crossed out, ring the answer you now wish to select as shown. 0 1 A budget surplus is best described as which of the following? [1 mark] A Where government expenditure is greater than government revenue B Where government revenue is greater than government expenditure C Where the value of exports is greater than the value of imports D Where the value of imports is greater than the value of exports 0 2 Which of the following is not a supply-side policy? [1 mark] A Decreasing taxes on business profits B Decreasing the power of trade unions C Increasing interest rates D Increasing investment in education Do not write outside the box 3 *03* Turn over ► IB/H/Jun23/8136/2 Do not write outside the box 0 3 Table 1 shows economic growth between 2018 and 2022 for an economy. Table 1 Year Economic growth (% change in GDP) 2018 3.2 2019 0.5 2020 –1.4 2021 1.2 2022 1.9 Using Table 1, the average (mean) annual rate of economic growth for the period 2018–2022 to one decimal place is [1 mark] A 0.9% B 1.1% C 1.4% D 1.9% 0 4 ‘If inflation is low, the money saved today can be used at a later date with no significant reduction in its purchasing power.’ Which function of money does the above statement most closely relate to? [1 mark] A Means of deferred payment B Medium of exchange C Store of value D Unit of account 4 *04* IB/H/Jun23/8136/2 Do not write outside the box 0 5 Which of the following would be most likely to increase income inequality? [1 mark] A Increased tax-free personal allowances B Increased tax rates on high incomes C Decreased unemployment benefits D Decreased tax rates on all incomes 0 6 Which of the following is most likely to increase the UK’s quantity of imports? [1 mark] A Increased trade barriers B Increased UK economic growth C Lower economic growth in UK’s trading partners D Lower exchange rate 0 7 Which type of unemployment is caused by unemployment benefits being generous enough to allow workers to take a long time when searching for jobs? [1 mark] A Cyclical B Frictional C Seasonal D Structural 5 *05* Turn over ► IB/H/Jun23/8136/2 Do not write outside the box 0 8 Which of the following pairs of policy changes is most likely to reduce a balance of trade deficit? [1 mark] Tax rates Exchange rate A Decrease Decrease B Decrease Increase C Increase Decrease D Increase Increase 0 9 Figure 1 shows the US Dollar ($) to the British Pound (£) foreign exchange market. Figure 1 Which of the following could have caused the change in the equilibrium from point A to point B? [1 mark] A Decreased UK exports to the USA B Decreased UK imports from the USA C Increased UK exports to the USA D Increased UK imports from the USA 6 *06* IB/H/Jun23/8136/2 Do not write outside the box 1 0 Table 2 shows data from the current account of the balance of payments for an economy. Table 2 £ million Exports 4.5 Imports 7.7 Primary income balance 3.4 Secondary income balance –1.6 Based on this information, calculate the current account balance for this economy. [1 mark] A £1.4 million deficit B £0.4 million deficit C £3.4 million surplus D £14.0 million surplus 1 1 State two factors that may influence the rate of interest charged by banks lending money. [2 marks] Factor 1 Factor 2 7 *07* Turn over ► IB/H/Jun23/8136/2 Do not write outside the box 1 2 Explain one benefit of increasing taxation rates for an economy. [2 marks] 1 3 Explain one factor that may contribute to the growth of globalisation. [2 marks] Turn over for the next question 8 *08* IB/H/Jun23/8136/2 Do not write outside the box 1 4 Table 3 contains labour market data for an economy. Table 3 Number of people in labour force 33.5 million Number of people in employment 31.8 million 1 4 . 1 Using Table 3, calculate the unemployment rate to one decimal place. Show your working. [2 marks] Answer 1 4 . 2 Explain one possible consequence for UK businesses of increased UK unemployment. [2 marks] 9 *09* Turn over ► IB/H/Jun23/8136/2 Do not write outside the box Figure 2 – Inequality in the UK Many people are concerned that inequality is increasing in the UK to unacceptably high levels. The share of income earned by the top 1% richest households has nearly tripled in the last forty years. Income inequality and wealth inequality can lead to social and economic problems. Solutions to rising income inequality include policies on taxation and welfare spending. Wealth inequality comes from wide differences in people’s wealth – often connected to rising prices of assets, such as houses. The problems caused by wealth inequality can be addressed by changes in taxation. 1 5 Using Figure 2, analyse how redistribution of income and wealth can be achieved through taxation and government spending. [6 marks] Extra space 10 *10* IB/H/Jun23/8136/2 Do not write outside the box 1 6 State two examples of direct taxes used in the UK. [2 marks] Example 1 Example 2 1 7 Explain one role of a commercial bank. [2 marks] 1 8 Explain one disadvantage of using supply-side policies. [2 marks] 11 *11* Turn over ► IB/H/Jun23/8136/2 Do not write outside the box 1 9 Table 4 shows data relating to tax rates and personal allowances in an economy. Table 4 – Income tax rates and allowance for yearly income Tax-free personal allowance £14 000 Tax rate on income above £14 000 25% Tax rate on income above £40 000 50% 1 9 . 1 A person earns an annual income of £35 000 f