
	Trending ▼ ICSE CBSE 10th ISC CBSE 12th CTET GATE UGC NET Vestibulares ResFinder

GCE JUN 2007 : (AS 3) The National Economy

4 pages, 16 questions, 0 questions with responses, 0 total responses,

	gce	+Fave Message
	Profile Timeline Uploads Q & A

Home > gce >

Instantly get Model Answers to questions on this ResPaper. Try now!
NEW ResPaper Exclusive!

Formatting page ...

ADVANCED SUBSIDIARY (AS) General Certificate of Education 2007 Economics assessing Module 2: The National Economy ASE31 Assessment Unit AS 3 [ASE31] WEDNESDAY 13 JUNE, MORNING TIME 1 hour 30 minutes. INSTRUCTIONS TO CANDIDATES Write your Centre Number and Candidate Number on the Answer Booklet provided. Answer Question 1 and any one of Questions 2, 3 or 4. INFORMATION FOR CANDIDATES The total mark for this paper is 80. Quality of written communication will be assessed in all questions except Question 1 parts (a) and (c). Figures in brackets printed down the right-hand side of pages indicate the marks awarded to each question or part question. ADVICE TO CANDIDATES You are advised to take account of the marks for each part question in allocating the available examination time. ASE3S7 3170 You must answer this question. 1 Study the information below and answer the questions which follow. Inflation: bad for some but worse for others. TRUDGING UP THE MIDDLE-CLASS INFLATION SLOPE Audio-visual & related products -0.7% -4.6% Clothing -3.8% Alcoholic drink 3.2% 4.0% 4.3% 4.6% 5.8% 5.7% Food Nannies salaries, London Outpatient services, including private healthcare Domestic services Social protection, including playgroup fees Private school fees Footwear -10.6% Unless stated, all figures are for July 2006 latest figure Annual Percentage Increase/Decrease in Prices of Selected Items Fig. 1 Many people feel that their cost of living is increasing by much more than the government s preferred measure of inflation which now (July 2006) stands at 2.4% per annum. Cynics might argue that those experiencing higher price increases have only themselves to blame for spending their money on school fees, private healthcare and expensive nannies instead of on new clothes and the latest electronic gadgetry. The consumer price index (CPI) consists of a range of goods and services for which the inflation rate is carefully monitored. Each item is allocated a weighting which reflects its degree of importance when the general average is calculated. For example food has a weighting of 9%, clothing and footwear 5% and private education is just under 2%. Of course like all averages these weightings can be very misleading. 85% of the population spend nothing whatsoever on private education but for those that do the burden is closer to 10% of expenditure rather than the average of 2%. ASE3S7 3170 2 5 10 One component which significantly affects us all is the price of oil. However economists and the policy makers at the Bank of England are uncertain as to the precise impact of dearer energy upon the economy. On the one hand soaring energy costs are driving inflation upwards and pushing the Monetary Policy Committee of the Bank of England toward higher interest rates. On the other hand higher fuel bills act like a tax, causing individuals and firms to curb spending on other goods and services and pushing the Bank of England towards lower rather than higher interest rates. 15 20 The key to this puzzle is how much the one-off impact of dearer energy spills over into pay demands, putting pressure on companies to raise their prices. If these so called second-round effects take hold then the Bank of England will have little option but to increase interest rates in an effort to squeeze inflation out of the economy. Source: Adapted from The Times August 19th 2006, authors Martin Waller and Gary Duncan (a) Explain what is meant by inflation. [3] (b) Explain how the UK government s preferred rate of inflation is measured. [6] (c) Explain why a 10% rise in the price of food and a 10% rise in the price of private education will have different effects on the rate of inflation. [4] (d) Explain why Northern Ireland might have a significantly different inflation rate from the rest of the UK. [6] (e) Using the information in Fig. 1 explain the different trends in the prices of goods as opposed to services. [6] (f) Explain why the weights used in the construction of the CPI might give a misleading impression of the importance of a particular product to a household. [6] (g) Evaluate the case for a significant increase in interest rates in the UK. ASE3S7 3170 3 [9] [Turn over Answer any one of Questions 2, 3 or 4. 2 (a) Explain what is meant by the term Gross Domestic Product (GDP). (b) Outline any two methods by which GDP may be calculated. [8] [16] (c) GDP per head of the population is often used as the basis for measuring a country s standard of living. Evaluate the desirability of replacing GDP per head of the population with other measures such as the Human Development Index, for this purpose. [16] 3 (a) Explain what is meant by fiscal policy. [8] (b) Show how fiscal policy might be used to reduce fluctuations in the level of economic activity. [16] (c) Evaluate the desirability of a government maintaining a balanced budget rather than using discretionary fiscal policy. [16] 4 (a) Explain what is shown by the short run aggregate supply curve. [8] (b) Explain the main factors which may lead to a rightward shift in the long run aggregate supply curve. [16] (c) Evaluate the impact of supply-side policies on an economy. [16] Permission to reproduce all copyright material has been applied for. In some cases, efforts to contact copyright holders may have been unsuccessful and CCEA will be happy to rectify any omissions of acknowledgement in future if notified. ASE3S7 3170 SP (NF/CGW) T46228/2

Formatting page ...

Additional Info : Gce Economics June 2007 Assessment Unit AS 3 Module 2: The National Economy
Tags : General Certificate of Education, A Level and AS Level, uk, council for the curriculum examinations and assessment, gce exam papers, gce a level and as level exam papers , gce past questions and answer, gce past question papers, ccea gce past papers, gce ccea past papers

gce chat

Horizontal lines at:
Guest Horizontal lines at:
AutoRM Data:
Box geometries: