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PF
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L
R
ECONOMICS
ED EV
JUNE
EX
A 9EC0
C2
R 023
EL
H EV FO
MARKSCHEME
EL IS R
J U
AS
PF IO H
2023
AS AND A LEVEL
M N A U N 2 EL
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IO H EV
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LP IO
QUESTION PAPER 3.pdf
EM VE FU N
L L 20
E M R 2F
EV O
IS R
IO HE
AY
, Please check the examination details below before entering your candidate information
Candidate surname Other names
Centre Number Candidate Number
Pearson Edexcel Level 3 GCE
Monday 5 June 2023
Morning (Time: 2 hours)
Paper
reference 9EC0/03
Economics A
Advanced
PAPER 3: Microeconomics and Macroeconomics
You do not need any other materials. Total Marks
Instructions
•• Use black ink or ball-point pen.
Fill in the boxes at the top of this page with your name,
centre number and candidate number.
•• There are two sections in this question paper.
In Section A, answer all questions 1(a) to 1(c) and one question from 1(d) or 1(e).
•• InAnswer
Section B, answer all questions 2(a) to 2(c) and one question from 2(d) or 2(e).
the questions in the spaces provided
– there may be more space than you need.
Information
•• The total mark for this paper is 100.
The marks for each question are shown in brackets
– use this as a guide as to how much time to spend on each question.
• Calculators may be used.
Advice
•• Read each question carefully before you start to answer it.
Check your answers if you have time at the end.
Turn over
P72982A
©2023 Pearson Education Ltd.
N:1/1/1/1
*P72982A0136*
, SECTION A
Read Figures 1 and 2 and the following extracts (A and B) before answering Question 1.
DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA
Answer ALL Questions 1(a) to 1(c), and EITHER Question 1(d) OR 1(e).
Write your answers in the spaces provided.
You are advised to spend 1 hour on this section.
Question 1
The UK economy
Figure 1: UK gas prices in pence per therm, August 2002 to August 2022
600
500
400
Pence
per 300
therm
200
100
0
Aug Aug Aug
2002 2012 2022
Figure 2: UK inflation, CPI, August 2002 to August 2022
10
9.9
8
6
(%)
4
2
0
–2
Aug Aug Aug
2002 2012 2022
2
*P72982A0236*
, Extract A
Fiscal policy changes in the UK, Autumn 2022
DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA
After many changes in policy, people earning above £150 000 will now no longer benefit
from the tax cut in the September 2022 mini‑budget, which proposed the removal of
the 45% tax band. The proposed change in the main 20% standard rate of income tax
moving to 19% has been postponed. 5
In April 2022, a 1.25% rise in national insurance contributions was implemented, labelled
as a health and social care levy. It was cancelled in Autumn 2022. Britain’s poorest
households would have lost £7.56 a year from the national insurance rise. The richest
10% of households, earning an average of £108 000, would have lost £1 800.
Another measure in the Truss Government’s £30 billion tax cut proposals that would have 10
benefitted the rich, was the removal of the 2023 planned rise in corporation tax from
19% to 25%. The former chancellor wanted to cut the tax to 15% but this was the wrong
time to do this. The former chancellor also removed the 2014 cap on bankers’ bonuses,
clearly an unfair decision at the time when public sector workers were told to accept pay
caps to keep inflation under control. 15
The reflationary fiscal policy triggered warnings that the Monetary Policy Committee of
the Bank of England would raise interest rates further – having already raised them from
0.1% in 2021 to 2.25% in September 2022. This meant an end to the fiscal rules set by the
government in the recent past: debt to be falling as a share of national income by 2024
and no borrowing for day‑to‑day spending. 20
(Source: adapted from ‘Tax cuts benefit high income earners the most’ R Merrick
The Independent: 19 September 2022 and FT Source: adapted from
Sebastian Payne and Chris Giles in London 29 August 2022)
Extract B
Inequality to rise in the UK
The rising cost of living is expected to affect low‑income families the most. Inflation
in Autumn 2022 is expected to hit 14% for families in the poorest tenth of the income
distribution, compared with 8% for families in the richest tenth, driven in large part
by rising energy costs and food prices. Around half of the food consumed in the UK is 5
imported, and the 20% fall in the value of the pound in 2022 has affected lower income
groups more because food is a higher proportion of their spending. The government’s
decision to freeze benefits, rather than allowing them to rise in line with current inflation,
means that the support provided is a real terms cut for families currently receiving high
levels of benefits. A two‑year freeze on energy price caps will now only last until April 10
2023, which would have kept the average energy bill at £2 500 rather than £3 500.
(Source: adapted from IFS Report: Living standards, poverty and inequality
in the UK: July 2022 and https://www.ft.com/content/6de5b52e-
64c8-4997-8939-e1c59172daa7?shareType=nongift)
3
*P72982A0336* Turn over
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23 THIS PAGESTRIP OFF THIS PAGESTRIP OFF THIS PAGESTRIP OFF THIS PAGESTRIP OFF THIS PAGESTRIP OFF THIS
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EX
CE
L
J AN
M UN D
AR E A
KS 20 LE
IS
CH 23 VE
IO
L
N
EM M
E A
EDEXCEL
EL
EDEXCEL A LEVEL 2023MAY
PF
U
L
R
ECONOMICS
ED EV
JUNE
EX
A 9EC0
C2
R 023
EL
H EV FO
MARKSCHEME
EL IS R
J U
AS
PF IO H
2023
AS AND A LEVEL
M N A U N 2 EL
L
R 02 PFU
AR E N
EV 3F L
KS 20 D AIS OR R
IO H EV
CH 23 LE N E IS
LP IO
QUESTION PAPER 3.pdf
EM VE FU N
L L 20
E M R 2F
EV O
IS R
IO HE
AY
, Please check the examination details below before entering your candidate information
Candidate surname Other names
Centre Number Candidate Number
Pearson Edexcel Level 3 GCE
Monday 5 June 2023
Morning (Time: 2 hours)
Paper
reference 9EC0/03
Economics A
Advanced
PAPER 3: Microeconomics and Macroeconomics
You do not need any other materials. Total Marks
Instructions
•• Use black ink or ball-point pen.
Fill in the boxes at the top of this page with your name,
centre number and candidate number.
•• There are two sections in this question paper.
In Section A, answer all questions 1(a) to 1(c) and one question from 1(d) or 1(e).
•• InAnswer
Section B, answer all questions 2(a) to 2(c) and one question from 2(d) or 2(e).
the questions in the spaces provided
– there may be more space than you need.
Information
•• The total mark for this paper is 100.
The marks for each question are shown in brackets
– use this as a guide as to how much time to spend on each question.
• Calculators may be used.
Advice
•• Read each question carefully before you start to answer it.
Check your answers if you have time at the end.
Turn over
P72982A
©2023 Pearson Education Ltd.
N:1/1/1/1
*P72982A0136*
, SECTION A
Read Figures 1 and 2 and the following extracts (A and B) before answering Question 1.
DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA
Answer ALL Questions 1(a) to 1(c), and EITHER Question 1(d) OR 1(e).
Write your answers in the spaces provided.
You are advised to spend 1 hour on this section.
Question 1
The UK economy
Figure 1: UK gas prices in pence per therm, August 2002 to August 2022
600
500
400
Pence
per 300
therm
200
100
0
Aug Aug Aug
2002 2012 2022
Figure 2: UK inflation, CPI, August 2002 to August 2022
10
9.9
8
6
(%)
4
2
0
–2
Aug Aug Aug
2002 2012 2022
2
*P72982A0236*
, Extract A
Fiscal policy changes in the UK, Autumn 2022
DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA
After many changes in policy, people earning above £150 000 will now no longer benefit
from the tax cut in the September 2022 mini‑budget, which proposed the removal of
the 45% tax band. The proposed change in the main 20% standard rate of income tax
moving to 19% has been postponed. 5
In April 2022, a 1.25% rise in national insurance contributions was implemented, labelled
as a health and social care levy. It was cancelled in Autumn 2022. Britain’s poorest
households would have lost £7.56 a year from the national insurance rise. The richest
10% of households, earning an average of £108 000, would have lost £1 800.
Another measure in the Truss Government’s £30 billion tax cut proposals that would have 10
benefitted the rich, was the removal of the 2023 planned rise in corporation tax from
19% to 25%. The former chancellor wanted to cut the tax to 15% but this was the wrong
time to do this. The former chancellor also removed the 2014 cap on bankers’ bonuses,
clearly an unfair decision at the time when public sector workers were told to accept pay
caps to keep inflation under control. 15
The reflationary fiscal policy triggered warnings that the Monetary Policy Committee of
the Bank of England would raise interest rates further – having already raised them from
0.1% in 2021 to 2.25% in September 2022. This meant an end to the fiscal rules set by the
government in the recent past: debt to be falling as a share of national income by 2024
and no borrowing for day‑to‑day spending. 20
(Source: adapted from ‘Tax cuts benefit high income earners the most’ R Merrick
The Independent: 19 September 2022 and FT Source: adapted from
Sebastian Payne and Chris Giles in London 29 August 2022)
Extract B
Inequality to rise in the UK
The rising cost of living is expected to affect low‑income families the most. Inflation
in Autumn 2022 is expected to hit 14% for families in the poorest tenth of the income
distribution, compared with 8% for families in the richest tenth, driven in large part
by rising energy costs and food prices. Around half of the food consumed in the UK is 5
imported, and the 20% fall in the value of the pound in 2022 has affected lower income
groups more because food is a higher proportion of their spending. The government’s
decision to freeze benefits, rather than allowing them to rise in line with current inflation,
means that the support provided is a real terms cut for families currently receiving high
levels of benefits. A two‑year freeze on energy price caps will now only last until April 10
2023, which would have kept the average energy bill at £2 500 rather than £3 500.
(Source: adapted from IFS Report: Living standards, poverty and inequality
in the UK: July 2022 and https://www.ft.com/content/6de5b52e-
64c8-4997-8939-e1c59172daa7?shareType=nongift)
3
*P72982A0336* Turn over
