AQA ECON 2 Resit 23rd May

25 mark structure:

Intro: Definitions. Possible benefits of Exports! Short term growth but perhaps inflation, cost-push from imports. Linked to extract to say a deficit is very bad for economy.

Para 1: Talk about benefits of exports etc. Macro objectives like decreasing unemployment/ reducing deficit. Ad diagram.
Evaluation- inflation but depends on output gap. Also depends on economies abroad. Inelastic demand?

Para 2: cost push inflation fron more expensive imports. And the negatives from that.

Para 3: Supply side policies best for long run growth, etc. Increasing productivity. Boosting exports without need of depreciation. So no cost push. But time lags, and if in recession s.s.p wont work. Low confidence etc.

Conclusion: monetary and s.s. Policies need to work in tandem to ensure both short run and long run growth! Meet macro objectives without conflict.

I DIDN'T MENTION THE MULTIPLIER. AAAAAAAAAARGH.

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Did anyone get 4 D,s in a row for the multiple choice questions

Did anyone do context 2 ?


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I remember getting 3 bs then an A then 4 ds but i was unsure about one D

What was the definition for context 1? I know it was some kind of deficit but can't remember? Pretty sure it wasn't budget deficit, so current account maybe?

It was budget deficit ...

If that's to do with defining the unemployment rate yes I did 😀

What did you write for the 12
Marker ?


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The context 2 25 marker specifically asked how the monetary+fiscal policy would reduce unemployment further. Would you get marks if you talked about how a cut in interest rates decreased unemplyment as a result of increased gdp but also about how the shift in AD affected the BOP (exports decrease as a result of inflation and imports increase as result of increased national income, this would lead to a deterioration of the Balance of payment deficit) since the question only specifies unemployment??

I defined spare capacity, I drew the pbb and put point x inside the pbb saying that it shows spare capacity exists, I then spoke about how fiscal supply side policy such as increased spending on education shifts the lras to the right , I drew that too and then I said that inflation is decreasing from pl1 to pl1 and that this also makes us more internationally competitive

Please tell me you also got something similar

I thought the q specifically asked how a reduction in spare capacity would affect inflation .. To be absolutely honest I didn't write enough and wasn't 100% happy with my answer .. But I drew the PPf shifting in wards and then explained with a point inside the PPF going out of it how if actual Growth > the trend rate of growth = demand pull inflation and just revolved my answer around those concepts


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