This essay is a past exam essay. It argues whether if the UK would benefit from leaving the EU. It is an A grade answer for AQA A level Economics. It is an ideal guide for those aspiring to write A-grade answers in their Aqa A-level economics essays.
Do you agree with the view that the UK economy would benefit if the UK
left the EU? Justify your answer using the data and your economic
knowledge. (25 marks)
Certainly, the UK economy would benefit to a lower extent if the UK left
the EU. Some argue that leaving the EU would be more beneficial to the
UK economy as uncontrolled migration may cause problems however, it
would be more beneficial as there will be an increase in the labour force
which will generally make the UK producers to be more efficient. However,
remaining in the EU would be more beneficial as the UK has access to a
larger market with a greater consumer base, as well as this the UK
consumers would benefit more as the UK is generally an importing nation
as evidenced by the by the trade deficit it has and in 2018, the UK will
also have an access to FDI such as the Juncker plan which was established
in 2015. Therefore, remaining in the EU would be more beneficial to the
UK economy.
Indeed, an argument for leaving the EU is that the UK can remain in the
free trade area as negotiation will allow it to do so, however, it will have to
work both ways, some countries may not wish to trade freely with the UK,
they may sell their goods at a higher price to the UK and as the UK is a
consumer nation, the increase in in price will clearly hinder the UK
consumers.
The diagram shows that, if the UK
left the EU, the supply would shift
from S1 to S2. This will be a welfare
loss for the UK consumers as they
will see a rise in price from p1 to p2.
However, an argument for leavingS2
can be supported from this diagram
S1
as it would indeed result in a gain for
UK suppliers and demand for UK
goods increase from Q1P1 to Q2P2.
However, the EU suppliers supplying these goods at a cheaper price
means that they can produce it at a lower price as they have a
comparative advantage which means that they are more efficient than UK
suppliers. Therefore, leaving the EU would mean that UK consumers will
see an increase in price due to a loss of comparative advantage.
Therefore, it is evident that remaining in the EU would be beneficial for
the UK economy, leaving it will cost more.
The UK remaining in the EU would let it be open to investments such as
the Juncker plan which is a sum of €315 bn. This investment is directed
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