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GCE JUN 2008 : (AS 3) The National Economy

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ADVANCED SUBSIDIARY (AS) General Certificate of Education 2008 Economics assessing Module 2: The National Economy ASE31 Assessment Unit AS 3 [ASE31] FRIDAY 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 part (a). 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. ASE3S8 4159 You must answer this question. 1 Study the information below and answer the questions which follow. 60 Quarters Of Continuous Growth 320 billion A long run of growth ... 300 280 GDP, constant 2003 prices, quarterly data 260 240 220 200 90 92 94 96 98 00 02 04 06 Figure 1 At last we have stability 6% 5 4 3 2 1 0 -1 -2 -3 70 ... a record period of stability GDP (quarterly change) 74 78 82 86 90 94 98 02 06 Figure 2 The British economy has just passed a significant economic milestone. The Office for National Statistics (ONS) has announced the 60th consecutive quarter of economic growth in the UK. Gross domestic product (GDP) increased by 0.8 per cent between April and June 2007. (Paragraph 1) This may not sound particularly exciting but when we consider that the previous record run was 19 quarters from 1985 to 1990 then we should realise just how important an achievement this is. Economic growth is not just a statistic! It is what brings us material benefits like cars, flat screen televisions and mobile phones and it provides the government with more revenue to finance public services like education and health care. (Paragraph 2) ASE3S8 4159 2 However, impressive as our growth rate appears, it pales into insignificance when compared with Chinese growth which last year was 12% and this from an economy which could only expand by a paltry 17% throughout the entire 1960s. (Paragraph 3) Of course growth is good. No one could seriously suggest that Victorian Britain was a better place to live in than today s society. But not all groups have gained equally from growth. The Joseph Rowntree Foundation in a recent report into the distribution of poverty and wealth stated Britain is moving backwards towards levels of inequality and poverty last seen more than 40 years ago . When the economy expands it is often a very uneven process with some regions and sectors forging ahead and others remaining stagnant or even declining. (Paragraph 4) Indeed growth may have another very disturbing negative side-effect. The dreadful rain and flooding of summer 2007 may be the result of global warming, probably caused by the discharge of greenhouse gases into the atmosphere. So all those cars and televisions may come at the expense of severe flooding and if the cost of this extreme weather is deducted from the published data then our growth rate becomes much less impressive. (Paragraph 5) Environmental pressure group, Friends Of The Earth, expressed concern about using GDP as our measure of progress. In a recent report it stated, We need to redefine progress and replace GDP with a new indicator of progress which measures whether our national policies truly deliver a better quality of life for all . (Paragraph 6) (Adapted from The Sunday Times, July 15th 2007, author David Smith) (a) Explain what is meant by economic growth. [2] (b) Using Figures 1 and 2 describe two significant features of the UK s GDP since 1992. [6] (c) Figure 1 measures the growth of GDP at constant 2003 prices. Explain what is meant by GDP at constant 2003 prices . [8] (d) Explain some of the factors which might cause the UK and China to have very different rates of economic growth. [6] (e) Explain why economic growth may create inequality. [8] (f) Evaluate the view of Friends Of The Earth that GDP should cease to be used as a measure of economic growth. ASE3S8 4159 3 [10] [Turn over Answer any one of Questions 2, 3 or 4. 2 (a) Describe two methods by which unemployment is measured in the UK. [8] (b) Explain some of the reasons why Northern Ireland s rate of unemployment has fallen significantly since the early 1990s. [16] (c) In July 2007 the Treasury was considering a proposal to regionalise the National Minimum Wage, the level of social welfare benefits and public sector pay awards. If implemented, each of these payments would be lower in Northern Ireland than in many other regions of the UK. Critically examine this proposal. [16] 3 (a) Explain what is shown by the aggregate demand curve. [8] (b) Analyse the probable impact of a significant cut in interest rates on the aggregate demand curve. [16] (c) Evaluate the view that monetary policy is a more effective instrument for influencing aggregate demand than fiscal policy. [16] 4 (a) Briefly explain the four main macroeconomic objectives of the government of the United Kingdom. [8] (b) In July 2007 the British pound was valued at $2.06. Explain how a strong pound affects the achievement of these objectives. [16] (c) Evaluate the view that only supply side policies can enable the government to achieve all of its macroeconomic objectives. [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. ASE3S8 4159 SP (SM/CGW) T59327/2

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Additional Info : Gce Economics June 2008 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

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