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Pearson Edexcel International Advanced Level
Friday 12 January 2024
Afternoon (Time: 2 hours) Paper
reference WEC14/01
Economics
International Advanced Level
UNIT 4: Developments in the global economy
You must have: Total Marks
Source Booklet (enclosed)
Instructions
•• Use black ink or ball-point pen.
Fill in the boxes at the top of this page with your name,
centre number and candidate number.
•• Answer ALL questions in Section A and Section B.
Answer TWO questions in Section C.
• Answer the questions in the spaces provided
– there may be more space than you need.
Information
•• The total mark for this paper is 80.
The marks for each question are shown in brackets
– use this as a guide as to how much time to spend on each question.
• Calculators may be used.
Advice
•• Read each question carefully before you start to answer it.
Check your answers if you have time at the end.
DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA
Questions must be answered with a cross in a box . If you change your mind about an answer,
put a line through the box and then mark your new answer with a cross .
1 Which one of the following is an economic factor that might constrain the rate of
economic growth of a country?
A A high level of corruption
B A reduced threat of terrorism
C An increased access to credit
D A lack of foreign currency
(Total for Question 1 = 1 mark)
2 In 2022 the Government of Brazil spent $160 million on 762 infrastructure projects.
This public expenditure is an example of which one of the following?
A Expenditure on transfer payments
B Current expenditure
C Capital expenditure
D Consumer expenditure
(Total for Question 2 = 1 mark)
3 Between 2021 and 2022 the European Union (EU) recorded an increase in the capital
and financial account surplus of the balance of payments.
Ceteris paribus, which one of the following is the most likely reason for this increase in
the EU’s capital and financial account surplus?
A An increase in inward foreign direct investment (FDI) and portfolio
investment
B An increase in the value of EU exports and a decrease in the value of EU
imports
C An increase in public sector borrowing and an increase in public sector debt
D An increase in inflows into the primary income component of the EU’s
balance of payments
(Total for Question 3 = 1 mark)
2
*P75595A0228*
, 4 Globalisation has been associated with an increase in real GDP per capita in many
countries. However, some economists consider that there are costs associated
with globalisation.
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Ceteris paribus, which one of the following is a possible cost of globalisation on the
global economy?
A Lower prices and higher consumer surplus
B Lower rates of unemployment
C Higher long-run average costs for transnational companies
D Higher external costs arising from increased trade
(Total for Question 4 = 1 mark)
5 In 2022 the value of Japan’s currency, the yen, depreciated significantly against the
US dollar. Japan’s central bank intervened in the currency markets to increase the
external value of its currency.
Which one of the following combinations of foreign currency transactions would
Japan’s central bank be most likely to use if it wanted to raise the value of the yen
against the US dollar?
Japanese yen US dollar
A Buy Buy
B Buy Sell
C Sell Buy
D Sell Sell
(Total for Question 5 = 1 mark)
3
*P75595A0328* Turn over
, 6 The table shows Bosnia and Herzegovina’s index of export prices and index of import
prices between 2018 and 2020, (2000=100).
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Year Index of export Index of import
prices prices
2018 379.7 219.1
2019 354.4 214.2
2020 331.8 191.9
Ceteris paribus, which one of the following can be deduced from this table?
A Between 2000 and 2018 Bosnia and Herzegovina’s terms of trade worsened
by 73.3%
B Between 2000 and 2020 Bosnia and Herzegovina’s terms of trade improved
by 72.9%
C Bosnia and Herzegovina had to export the same amount of goods and
services to purchase a given quantity of imports each year
D Bosnia and Herzegovina’s index of import prices exceeded its index of export
prices each year
(Total for Question 6 = 1 mark)
TOTAL FOR SECTION A = 6 MARKS
4
*P75595A0428*
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