Oxford Cambridge and
RSA Examinations
GCEEconomicsH460/02:
Macroeconomics A Level
question paper with
marking scheme
(merged)
, Oxford Cambridge and RSA
Monday 22 May 2023 – Afternoon
A Level Economics
H460/02 Macroeconomics
Time allowed: 2 hours
You can use:
* 9 1 0 7 3 7 9 0 6 9 *
• a scientific or graphical calculator
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INSTRUCTIONS
• Use black ink. You can use an HB pencil, but only for graphs and diagrams.
• Write your answer to each question in the space provided. If you need extra space use
the lined pages at the end of this booklet. The question numbers must be clearly shown.
• Answer all the questions in Section A, one question in Section B and one question in
Section C.
INFORMATION
• The total mark for this paper is 80.
• The marks for each question are shown in brackets [ ].
• Quality of extended response will be assessed in questions marked with an asterisk (*).
• This document has 20 pages.
ADVICE
• Read each question carefully before you start your answer.
Read the stimulus material and answer all parts of Question 1.
International competitiveness
In 2019, the UK had a trade in goods and services deficit of £30.5bn and a current account deficit
of £95.3bn. A country’s international competitiveness is influenced primarily by the relative price
and quality of its products.
In the 2019 global competitiveness index, published by the World Economic Forum, the UK was
ranked 9th out of 141 countries. This position was down one on 2018. Singapore was placed 1st 5
in 2019 and 2nd in 2018.
The World Economic Forum considers 12 categories of influences on a country’s international
competitiveness. These include the country’s financial system, the skills of its workers and
its macroeconomic stability. The UK has a strong financial system and was placed 7th in this
category. Its central bank has experience in, for instance, maintaining price stability and engaging 10
in quantitative easing. The country’s commercial banks provide savings facilities, loans and other
services for their customers.
The UK was placed 11th in the skills category. A more skilled labour force is likely to have higher
productivity. In turn, productivity can also be affected by working hours. Between 2018 and
2019, average working hours fell in Germany, the UK and the USA and labour productivity rose. 15
In contrast, both average working hours and labour productivity rose in Poland and both fell in
Mexico over this period.
The category in the global competitiveness index which the UK performed best in was
macroeconomic stability. It came 1st achieving a maximum score of 100. Macroeconomic stability
can increase business confidence. This can increase investment, international competitiveness 20
and GDP per capita. Fig. 1 shows the international competitiveness ranking of eight countries
and their GDP per capita.
, 3
Fig. 1
International competitiveness ranking and GDP per capita of selected countries
140
Eswatini
120
Rwanda
100
International 80 Brazil
competitiveness
ranking 60
40 Slovenia
Italy
20 UK Sweden
Singapore
0
0 10 000 20 000 30 000 40 000 50 000 60 000 70 000
GDP per capita ($)
The country which experienced the largest increase in international competitiveness ranking
between 2018 and 2019 was Rwanda. The main destination of Rwanda’s exports is the UAE and
its main source of imports is China. Rwanda’s imports to GDP rose from 28% in 2010 to 35% in 25
2019 and GDP per capita increased from $610 to $802. Fig. 2 shows the savings ratio (average
propensity to save) and the changes in GDP per capita in Rwanda over the period.
Fig. 2
Rwanda’s savings ratio and change in GDP per capita 2010–2019
18
16
14
12
10
8
6
4
2
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
–2
% change in GDP per capita Savings ratio (%)
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