Wec12 01 Rms 20240815
Wec12 01 Rms 20240815
ly/APEdexcel
Summer 2024
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Summer 2024
Question Paper Log Number P75889A
Publications Code WEC12_01_2406_MS
All the material in this publication is copyright
© Pearson Education Ltd 2024
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Section A
Question Quantitative skills Answer Mark
assessed
1 QS9: Interpret, apply and The only correct answer is D
analyse information in
A is not correct as investment and the
written, graphical, tabular
profits of firms are likely to fall
and numerical forms
B is not correct as real income is likely to fall
and government expenditure is likely to rise
C is not correct as unemployment is likely to
rise and consumer confidence is likely to fall (1)
2 QS9: Interpret, apply and The only correct answer is B
analyse information in
A is not correct as this implies higher
written, graphical, tabular
consumption and therefore leads to an
and numerical forms
increase in the average price level
C is not correct as this would lead to higher
consumption and therefore an increase in
the average price level
D is not correct as this would lead to higher
consumption/investment and therefore an
increase in the average price level (1)
3 QS1: Calculate, use and The only correct answer is C
understand ratios and
A is not correct as this is calculated using
fractions
an incorrect formula: 44 / 1.5
QS9: Interpret, apply and
analyse information in B is not correct as this is calculated using
written, graphical, tabular an incorrect formula: 44 x 1.5
and numerical forms
D is not correct as this is calculated using
an incorrect formula: (44 x 1.5 x 1000) (1)
4 QS9: Interpret, apply and The only correct answer is B
analyse information in
A is not correct because this will lead to a
written, graphical, tabular
reduction in the deficit on the balance of
and numerical forms
trade for Honduras
C is not correct because this will lead to a
reduction in the deficit on the balance of
trade for Honduras
D is not correct because this will lead to a
reduction in the deficit on the balance of
trade for Honduras (1)
5 QS9: Interpret, apply and The only correct answer is C
analyse information in
A is not correct as incomes will fall and
written, graphical, tabular
reduce national happiness
and numerical forms
B is not correct as profits for firms will fall
as consumer spending decreases
D is not correct as welfare payments will
increase (1)
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Section B
Question In 2021 net migration in Nepal was approximately 300 000. Mark
Application
1 mark for appropriate reference to Nepal, e.g.:
• In 2021 net migration in Nepal was approximately 300 000 (1) (4)
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Question Between May 2022 and April 2023 the central bank of Nigeria Mark
increased the country’s base rate of interest by six percentage
points.
8 Knowledge 1, Application 3
Knowledge
Correctly drawn diagram with correctly labelled AD/LRAS curves
showing the original equilibrium price level and real output (1)
Application
Up to 3 marks for the following information included on the diagram:
• Drawing AD shifted to the left (1)
• Showing correct lower price level (1)
(not rewarded if ‘price’ is used on the axis)
• Showing correct real output (1)
(not rewarded if ‘quantity’ is used on the axis) (4)
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Question Calculate the change in Thailand’s balance of trade between 2020 and Mark
2021. Show your workings.
9 Knowledge 1, Application 3
Knowledge
1 mark for correct formula/implicit understanding, e.g.:
• Net trade balance = (X-M) /
• Value of exports – value of imports (1)
Application
Up to 3 marks for use of data in calculation from the following, e.g.:
Question With reference to the chart, explain one likely effect of this trend in Mark
the rate of inflation.
Application
1 mark for appropriate use of the chart, e.g.:
• For identifying an increase in the rate of inflation /
Between Jan 2021 and Jan 2023, the rate of inflation
increased from approximately 1.8% to 13% /
Between Jan 2021 and Jan 2023, the rate of inflation
increased by 11.2 percentage points (1) (4)
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Question Between 2015 and 2023 the European Central Bank increased its Mark
asset purchases (quantitative easing) programme by approximately
€3.5 trillion.
11 Knowledge 2, Application 2
Knowledge
Up to 2 marks for defining quantitative easing, e.g.:
• Central bank buys government bonds/gilts/securities/
corporate bonds (1)
• Increases money supply /
digital/virtual/electronic creation of money /
increases cash deposits of commercial banks /
injects more liquidity in financial markets (1)
Application
Up to 2 marks applying this to data, e.g.:
• It is a reflationary/monetary policy instrument (1)
• The European Central Bank increased its asset purchases
(quantitative easing) programme by €3.5 trillion (1)
• Reduces interest rate/borrowing costs/reward for saving (1)
• This would result in greater consumption/investment/AD (1) (4)
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Section C
Question Define the term ‘corporation tax’ (Extract A, lines 4 and 5). Mark
12 (a) Knowledge 2
Question Explain what is meant by Gross National Income (Extract A, line 24). Mark
Knowledge
Up to 2 marks for explaining Gross national income (GNI), e.g.
• It is GDP (1) plus net income (positive or negative) from
overseas/abroad (1)
• It is GDP (1) plus net receipts from abroad from compensation
of employees, property income and net taxes less subsidies on
production (1)
• It is GDP (1) plus money flowing from foreign countries minus
money flowing to foreign countries (1)
Application
Up to 2 marks for application to Extract A, e.g.:
• An alternative measure of economic growth (1)
• This measure removes the impact of international companies
/ provides a better understanding of domestic demand (1)
• According to the GNI estimate, Ireland’s rate of economic
growth was much lower / at 5.9% in 2022 (1)
(4)
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Question With reference to Extract A, analyse two reasons for the improvement Mark
in living standards in Ireland between 2015 and 2022.
Application
Up to 2 marks for use of Extract A, e.g.,
• Employment: 2.06 million to 2.55 million (1)
• Corporation tax receipts: €22.6 billion (1)
• Attracted over 1500 international companies / Apple Inc., the
world’s largest technology company, moved its European base
to Ireland in 2015 (1)
• The activities of international companies had a positive impact
on living standards in Ireland (1)
(6)
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Question With reference to Figure 1 and Extract A, examine two reasons why Mark
Ireland’s rate of economic growth was expected to decrease in 2023.
Application
1 mark for reference to Figure 1, e.g.:
• In 2022 Ireland’s annual real GDP growth rate was 12.2% (1)
AND
1 mark for reference to Extract A, e.g.:
• rate of economic growth is expected to decrease to just 4% /
Forecasts also suggest that between 2024 and 2027, the
economy is likely to grow by an average of 3.5% per year (1)
Evaluation
Up to 2 marks for evaluative comments (1+1 or 2+0), e.g.:
• The size of the decrease in the rate of economic growth is large
(1) as between 2022 and 2023, it has fallen by 8.2 percentage
points / from 12.2% in 2022 to 4% in 2023 (1)
• These are forecasts and may not happen (1) as inflation falls/
state of the global economy improves (1)
• Ireland’s rate of economic growth may not be low if Ireland’s
Government increases its spending e.g. fiscal policy (1) at a
faster rate than other components of AD (1)
• Economic growth may not be low in the long-run (1) given
forecasts also suggest that between 2024 and 2027, GDP is
likely to grow by an average of 3.5% per year (1)
• It is likely to be a combination of reasons that would lead to a
(8)
lower rate of economic growth for Ireland (1)
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Question With reference to Figure 2, Extract A and your own knowledge, discuss
the limitations of using GDP to compare living standards between countries.
Limitations include:
• Percentage changes are misleading without any reference to total GDP
• Differences in the composition of GDP: most of Ireland’s GDP is made up of
investment by international companies, where their output produced can be
volatile – “Some of these companies are so large that the country’s GDP
figures may be overstated”
• Fails to indicate whether the nation’s rate of growth is sustainable or not –
“Apple Inc., the world’s largest technology company, moved its European
base to Ireland in 2015”
• Differences in distribution of income as growth varies between countries –
“mislead analysis of matters related to income inequality”
• Quality of life issues, such as pollution from manufacturing: impact is hard
to measure – “mislead analysis of matters related to the environment”
• Methods of calculation and reliability of data may differ between countries –
“large fluctuations in Ireland’s industrial production data. It rose or fell by
more than 10% from one month to the next”
• Currency values do not effectively calculate accurate purchasing power
parity/exchange rates might not accurately reflect these differences in
purchasing power of currencies
• Presence of an informal and unpaid economy will imply that some output is
unrecorded as it is not bought or sold and there is no resulting income
• Does not consider differences in the size of population/population growth
• Subsistence, barter and the hidden economy will undervalue the real output
and national income will not reflect true living standards between countries
• Differences in quality of housing/education/healthcare between countries
• The size of the public sector spending, especially in developed countries
such as Ireland, which may or may not improve living standards
• Standard of living is subjective and therefore cannot be measured accurately
Section D
Question Evaluate supply-side policies that a government could use to increase the rate
of economic growth and to decrease the rate of inflation. Refer to a country of
your choice in your answer.
Policies include:
• Increased government spending on skills through investment in education
and/or training – this would increase human capital and raise productivity
• Increased government spending on infrastructure investment (e.g. roads or
broadband) – this would reduce industry costs or improve access to markets
• Reducing the level of welfare benefits – this will incentivise the unemployed
to take jobs, work harder and increase output per worker of those in work
• Privatisation – this may lead to increased competition, greater innovation
resulting from higher R&D spending, and therefore higher productivity
• Cutting cost of bureaucracy and/or deregulation of firms – this would raise
efficiency and productivity by increasing competition between firms
• Reducing regulation and/or increasing competition by reducing barriers to
entry in product markets
• Reducing corporation tax – this incentivises firms to innovate by investing in
technological advancements and therefore increasing potential output
• Reducing income tax – this may motivate employees to work harder/longer
NB Candidates may consider the positive effects for KAA and the
negative effects for evaluation (or vice versa)