OCR 2023 GCE ECONOMICS H460/02: MACROECONOMICS A LEVEL QUESTION PAPER & MARK SCHEME (MERGED)

SECTION A Read the stimulus material and answer all parts of Question 1. International competitiveness In 2019, the UK had a trade in goods and services deficit of £30.5bn and a current account deficit of £95.3bn. A country’s international competitiveness is influenced primarily by the relative price and quality of its products. In the 2019 global competitiveness index, published by the World Economic Forum, the UK was ranked 9th out of 141 countries. This position was down one on 2018. Singapore was placed 1 st 5 in 2019 and 2 nd in 2018. The World Economic Forum considers 12 categories of influences on a country’s international competitiveness. These include the country’s financial system, the skills of its workers and its macroeconomic stability. The UK has a strong financial system and was placed 7 th in this category. Its central bank has experience in, for instance, maintaining price stability and engaging 10 in quantitative easing. The country’s commercial banks provide savings facilities, loans and other services for their customers. The UK was placed 11th in the skills category. A more skilled labour force is likely to have higher productivity. In turn, productivity can also be affected by working hours. Between 2018 and 2019, average working hours fell in Germany, the UK and the USA and labour productivity rose. 15 In contrast, both average working hours and labour productivity rose in Poland and both fell in Mexico over this period. The category in the global competitiveness index which the UK performed best in was macroeconomic stability. It came 1 st achieving a maximum score of 100. Macroeconomic stability can increase business confidence. This can increase investment, international competitiveness 20 and GDP per capita. Fig. 1 shows the international competitiveness ranking of eight countries and their GDP per capita. © OCR 2023 3 Fig. 1 International competitiveness ranking and GDP per capita of selected countries 140 120 Eswatini International competitiveness ranking Rwanda 100 80 60 40 20 0 Brazil Slovenia I