Write your name here
Surname Other names
Candidate Number
Pearson Centre Number
Edexcel GCE
Economics
Advanced Subsidiary
Unit 2: Managing the Economy
Wednesday 21 May 2014 – Paper Reference
Afternoon Time: 1 hour 30 minutes 6EC02/01
You do not need any other materials. Total Marks
PEARSON EDEXCEL GCE A-LEVEL ECONOMICS 6EC02/01
ADVANCED SUBSIDIARY UNIT 2 MANAGING THE
ECONOMY SUMMER 2024 MAY EXAM
(AUTHENTIC MARKING SCHEME ATTACHED)
Turn over
P43305A *P43305A0132*
©2014 Pearson Education Ltd.
1/1/1/1/1/1
, Answer EITHER Question 1 or Question 2.
If you answer Question 1, put a cross in this box .
1 Growth, Productivity and Unemployment
Figure 1
UK Growth, percentage change in real GDP from previous quarter
1.0
0.5
0
–0.5
–1.0
–1.5
–2.0
–2.5
2006 07 08 09 10 11 12
Extract 1
Exceptional effects on growth
The 1% growth rate in real GDP in the third quarter of 2012 from the previous quarter
was the strongest in five years. However, the economy is still no bigger than it was a
year ago, and is 3% smaller than it was before the financial crisis hit in 2008. One-off
factors such as the Queen’s Diamond Jubilee and the London Olympics also improved
the third quarter figure, which was better than the 0.6% economists predicted. 5
But few believed the better data signalled the start of a strong economic recovery.
Employment is rising, real disposable incomes are recovering and retail sales are
picking up. However, the global economy is slowing, the government plans to
reduce its budget deficit further next year and confidence among businesses and
households remains fragile. 10
(Source for Figure 1 and Extract 1: © The Financial Times Ltd 2013)
Extract 2
UK unemployment and employment
UK ILO unemployment is at 2.51 million, up 55% since 2007, a similar increase
to the US and the eurozone, according to the OECD. That eurozone average
disguises huge variations, however, from rises of well over 100% in Greece and
Spain to a fall of 33% in Germany.
In past recessions, the proportion of the unemployed out of work for more than 12 5
months in the UK has typically increased to 40–50%. This time it has reached only 35%.
This has been partly attributed to the welfare-to-work policies of current and previous
governments which try to push people quickly back into whatever jobs are available.
The UK’s strength in creating jobs, taking the number employed back above the
pre-crisis level, has been balanced by concern about the quality of those jobs – 10
a lot of them self-employed, part-time or temporary – and a poorer productivity
performance than the average for developed countries.
(Source for Figure 1 and Extract 2: © stats.oecd.org)
2
*P43305A0232*
,(a) (i) With reference to Figure 1, explain how the growth rate in the third quarter of
2012 can be “the strongest in five years” (Extract 1, line 2) while the economy is
“smaller than it was before the financial crisis hit in 2008” (Extract 1, line 3).
(6)
(ii) With reference to Extract 1 and your own knowledge, explain two
likely benefits of economic growth.
(8)
(iii) Using the concept of the multiplier, assess the contribution of “one-off
factors such as the Queen’s Diamond Jubilee and the London Olympics”
(Extract 1, lines 3 and 4) to economic growth.
(12)
(b) (i) Explain how ‘UK ILO unemployment’ (Extract 2, line 1) is measured.
(4)
(ii) Explain two possible problems for the UK economy of 35% of the unemployed
being “out of work for more than 12 months” (Extract 2, lines 5 – 6).
(8)
*(iii) According to Extract 2 (lines 11 – 12) the UK has a “poorer productivity
performance than the average for developed countries.” Assess the likely
impact of the UK’s relatively poor productivity performance on its economy.
(12)
*(c) With reference to the information provided and your own knowledge, evaluate
the policies that the UK government could adopt to improve productivity.
(30)
3
*P43305A0332* Turn over
, (a) (i) With reference to Figure 1, explain how the growth rate in the third quarter of
2012 can be “the strongest in five years” (Extract 1, line 2) while the economy is
“smaller than it was before the financial crisis hit in 2008” (Extract 1, line 3).
(6)
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4
*P43305A0432*
Surname Other names
Candidate Number
Pearson Centre Number
Edexcel GCE
Economics
Advanced Subsidiary
Unit 2: Managing the Economy
Wednesday 21 May 2014 – Paper Reference
Afternoon Time: 1 hour 30 minutes 6EC02/01
You do not need any other materials. Total Marks
PEARSON EDEXCEL GCE A-LEVEL ECONOMICS 6EC02/01
ADVANCED SUBSIDIARY UNIT 2 MANAGING THE
ECONOMY SUMMER 2024 MAY EXAM
(AUTHENTIC MARKING SCHEME ATTACHED)
Turn over
P43305A *P43305A0132*
©2014 Pearson Education Ltd.
1/1/1/1/1/1
, Answer EITHER Question 1 or Question 2.
If you answer Question 1, put a cross in this box .
1 Growth, Productivity and Unemployment
Figure 1
UK Growth, percentage change in real GDP from previous quarter
1.0
0.5
0
–0.5
–1.0
–1.5
–2.0
–2.5
2006 07 08 09 10 11 12
Extract 1
Exceptional effects on growth
The 1% growth rate in real GDP in the third quarter of 2012 from the previous quarter
was the strongest in five years. However, the economy is still no bigger than it was a
year ago, and is 3% smaller than it was before the financial crisis hit in 2008. One-off
factors such as the Queen’s Diamond Jubilee and the London Olympics also improved
the third quarter figure, which was better than the 0.6% economists predicted. 5
But few believed the better data signalled the start of a strong economic recovery.
Employment is rising, real disposable incomes are recovering and retail sales are
picking up. However, the global economy is slowing, the government plans to
reduce its budget deficit further next year and confidence among businesses and
households remains fragile. 10
(Source for Figure 1 and Extract 1: © The Financial Times Ltd 2013)
Extract 2
UK unemployment and employment
UK ILO unemployment is at 2.51 million, up 55% since 2007, a similar increase
to the US and the eurozone, according to the OECD. That eurozone average
disguises huge variations, however, from rises of well over 100% in Greece and
Spain to a fall of 33% in Germany.
In past recessions, the proportion of the unemployed out of work for more than 12 5
months in the UK has typically increased to 40–50%. This time it has reached only 35%.
This has been partly attributed to the welfare-to-work policies of current and previous
governments which try to push people quickly back into whatever jobs are available.
The UK’s strength in creating jobs, taking the number employed back above the
pre-crisis level, has been balanced by concern about the quality of those jobs – 10
a lot of them self-employed, part-time or temporary – and a poorer productivity
performance than the average for developed countries.
(Source for Figure 1 and Extract 2: © stats.oecd.org)
2
*P43305A0232*
,(a) (i) With reference to Figure 1, explain how the growth rate in the third quarter of
2012 can be “the strongest in five years” (Extract 1, line 2) while the economy is
“smaller than it was before the financial crisis hit in 2008” (Extract 1, line 3).
(6)
(ii) With reference to Extract 1 and your own knowledge, explain two
likely benefits of economic growth.
(8)
(iii) Using the concept of the multiplier, assess the contribution of “one-off
factors such as the Queen’s Diamond Jubilee and the London Olympics”
(Extract 1, lines 3 and 4) to economic growth.
(12)
(b) (i) Explain how ‘UK ILO unemployment’ (Extract 2, line 1) is measured.
(4)
(ii) Explain two possible problems for the UK economy of 35% of the unemployed
being “out of work for more than 12 months” (Extract 2, lines 5 – 6).
(8)
*(iii) According to Extract 2 (lines 11 – 12) the UK has a “poorer productivity
performance than the average for developed countries.” Assess the likely
impact of the UK’s relatively poor productivity performance on its economy.
(12)
*(c) With reference to the information provided and your own knowledge, evaluate
the policies that the UK government could adopt to improve productivity.
(30)
3
*P43305A0332* Turn over
, (a) (i) With reference to Figure 1, explain how the growth rate in the third quarter of
2012 can be “the strongest in five years” (Extract 1, line 2) while the economy is
“smaller than it was before the financial crisis hit in 2008” (Extract 1, line 3).
(6)
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4
*P43305A0432*
