5/10/25, 2:04 PM Edexcel A-level Economics Paper 2 ACTUAL EXAM 2025 TEST COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS…
Scheduled maintenance: May 11, 2025 from 07:00 AM to 09:00 AM
Edexcel A-level Economics Paper 2 ACTUAL
EXAM 2025 TEST COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
(DETAILED & ELABORATED) 100% SOLVED
2025!!
Save
Terms in this set (262)
The study of the economy as a whole, including
Macroeconomics
inflation, growth and unemployment.
The total of all demands or expenditures in the
Aggregate demand
economy at any given price.
Shows the relationship between the price level and
Aggregate demand
equilibrium national income. As the price level rises
curve
the equilibrium level of national income falls.
Business confidence: the mood of managers and
Animal spirits owners of firms about the future of their industry
and the wider economy.
The addition to capital stock, both to replace the
Gross investment existing capital stock which has been used up
(depreciation) and the creation of additional capital.
Investment The addition to the capital stock of the economy.
Profit kept back by a firm for its own use which is not
Retained profit
distributed to shareholders or used to pay taxation.
https://quizlet.com/1042211011/edexcel-a-level-economics-paper-2-actual-exam-2025-test-comprehensive-questions-and-verified-answers-detai… 1/26
,5/10/25, 2:04 PM Edexcel A-level Economics Paper 2 ACTUAL EXAM 2025 TEST COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS…
Net exports or the net Exports minus imports.
trade balance
The relationship between the average level of prices
Aggregate supply curve
in the economy and the level of total output.
The level of output where no
extra production can take
place in the long run with
existing resources. The full
capacity level of output for an
Full capacity
economy is shown by the
classical long run aggregate
supply curve or the vertical
part of a Keynesian aggregate
supply curve.
Short-run aggregate The upward sloping aggregate supply curve which
supply curve assumes that money wage rates are fixed.
Factors such as changes in wage rates or
Supply-side shocks commodity prices which cause the short run
aggregate supply curve to shift.
A model of the economy which shows the flow of
Circular flow of income goods, services and factors and their payments
around the economy.
Closed economy An economy where there is no foreign trade.
Rent, interest, wages and profits earned from wealth
Income
owned by economic actors.
In the circular flow of income, spending which is not
Injections generated by households including investment,
government spending and exports.
The value of the output, expenditure or income of
National income
an economy over a period of time.
An economy where there is trade with other
Open economy
countries.
https://quizlet.com/1042211011/edexcel-a-level-economics-paper-2-actual-exam-2025-test-comprehensive-questions-and-verified-answers-detai… 2/26
, 5/10/25, 2:04 PM Edexcel A-level Economics Paper 2 ACTUAL EXAM 2025 TEST COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS…
A stock of assets which can be used to generate a
flow of production or income. For example, physical
Wealth
wealth such as factories and machines is used to
make goods and services.
In the circular flow of income, spending by
Withdrawals or leakages households which does not flow back to domestic
firms. It includes savings, taxes and imports.
The increase in imports divided by the increase in
Marginal propensity to
income that caused them (i.e. change in M / change
import (MPM)
in Y)
Marginal propensity to The increase in saving divided by the increase in
save (MPS) income that caused it (i.e. change in S / change in Y)
The increase in tax revenues divided by the increase
Marginal propensity to
in income that caused them (i.e. change in T /
tax (MPT)
change in Y)
The increase in withdrawals from the circular flow (S
+ T + M) divided by the increase in income that
Marginal propensity to
caused them (i.e. change in W / change in Y); this is
withdraw (MPW)
the same as the sum of the marginal propensity to
save, tax and import (MPS + MPT + MPM).
https://quizlet.com/1042211011/edexcel-a-level-economics-paper-2-actual-exam-2025-test-comprehensive-questions-and-verified-answers-detai… 3/26
Scheduled maintenance: May 11, 2025 from 07:00 AM to 09:00 AM
Edexcel A-level Economics Paper 2 ACTUAL
EXAM 2025 TEST COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
(DETAILED & ELABORATED) 100% SOLVED
2025!!
Save
Terms in this set (262)
The study of the economy as a whole, including
Macroeconomics
inflation, growth and unemployment.
The total of all demands or expenditures in the
Aggregate demand
economy at any given price.
Shows the relationship between the price level and
Aggregate demand
equilibrium national income. As the price level rises
curve
the equilibrium level of national income falls.
Business confidence: the mood of managers and
Animal spirits owners of firms about the future of their industry
and the wider economy.
The addition to capital stock, both to replace the
Gross investment existing capital stock which has been used up
(depreciation) and the creation of additional capital.
Investment The addition to the capital stock of the economy.
Profit kept back by a firm for its own use which is not
Retained profit
distributed to shareholders or used to pay taxation.
https://quizlet.com/1042211011/edexcel-a-level-economics-paper-2-actual-exam-2025-test-comprehensive-questions-and-verified-answers-detai… 1/26
,5/10/25, 2:04 PM Edexcel A-level Economics Paper 2 ACTUAL EXAM 2025 TEST COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS…
Net exports or the net Exports minus imports.
trade balance
The relationship between the average level of prices
Aggregate supply curve
in the economy and the level of total output.
The level of output where no
extra production can take
place in the long run with
existing resources. The full
capacity level of output for an
Full capacity
economy is shown by the
classical long run aggregate
supply curve or the vertical
part of a Keynesian aggregate
supply curve.
Short-run aggregate The upward sloping aggregate supply curve which
supply curve assumes that money wage rates are fixed.
Factors such as changes in wage rates or
Supply-side shocks commodity prices which cause the short run
aggregate supply curve to shift.
A model of the economy which shows the flow of
Circular flow of income goods, services and factors and their payments
around the economy.
Closed economy An economy where there is no foreign trade.
Rent, interest, wages and profits earned from wealth
Income
owned by economic actors.
In the circular flow of income, spending which is not
Injections generated by households including investment,
government spending and exports.
The value of the output, expenditure or income of
National income
an economy over a period of time.
An economy where there is trade with other
Open economy
countries.
https://quizlet.com/1042211011/edexcel-a-level-economics-paper-2-actual-exam-2025-test-comprehensive-questions-and-verified-answers-detai… 2/26
, 5/10/25, 2:04 PM Edexcel A-level Economics Paper 2 ACTUAL EXAM 2025 TEST COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS…
A stock of assets which can be used to generate a
flow of production or income. For example, physical
Wealth
wealth such as factories and machines is used to
make goods and services.
In the circular flow of income, spending by
Withdrawals or leakages households which does not flow back to domestic
firms. It includes savings, taxes and imports.
The increase in imports divided by the increase in
Marginal propensity to
income that caused them (i.e. change in M / change
import (MPM)
in Y)
Marginal propensity to The increase in saving divided by the increase in
save (MPS) income that caused it (i.e. change in S / change in Y)
The increase in tax revenues divided by the increase
Marginal propensity to
in income that caused them (i.e. change in T /
tax (MPT)
change in Y)
The increase in withdrawals from the circular flow (S
+ T + M) divided by the increase in income that
Marginal propensity to
caused them (i.e. change in W / change in Y); this is
withdraw (MPW)
the same as the sum of the marginal propensity to
save, tax and import (MPS + MPT + MPM).
https://quizlet.com/1042211011/edexcel-a-level-economics-paper-2-actual-exam-2025-test-comprehensive-questions-and-verified-answers-detai… 3/26
