AQA-7136-2-ECONOMICS QUESTION PAPER 2_NATIONAL AND INTERNATIONAL ECONOMY-A LEVEL-20May24
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Course
ECONOMICS
Institution
ECONOMICS
AQA-7136-2-ECONOMICS QUESTION PAPER 2_NATIONAL AND INTERNATIONAL ECONOMY-A LEVEL-20May24.
Extract C: Falling living standards in the UK?
According to the Office for Budget Responsibility (OBR), in 2022, the UK faced its biggest fall
in living standards on record as the surging cost of living re...
AQA
A-level
ECONOMICS
Paper 2 National and International Economy
Monday 20 May 2024 Afternoon Time allowed: 2 hours
Materials
For this paper you must have:
• an AQA 12-page answer book
• a calculator.
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Instructions
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• Use black ink or black ball-point pen. Pencil should only be used for drawing.
• Write the information required on the front cover of your answer book.
The Paper Reference is 7136/2.
• In Section A, answer EITHER Context 1 OR Context 2.
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• In Section B, answer ONE essay.
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Information
• The marks for questions are shown in brackets.
• The maximum mark for this paper is 80.
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• There are 40 marks for Section A and 40 marks for Section B.
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Advice
• You are advised to spend 1 hour on Section A and 1 hour on Section B.
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IB/H/Jun24/G4001/E8 7136/2
Page 1 of 8
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2
Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
Productivity and living standards
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A: Indicators of economic performance and living standards, selected nations, 2021
Productivity Productivity Life Gini Expected CO2
(GDP per change expectancy coefficient years of emissions
hour worked, 2010–2021 at birth schooling per capita
US $) (%) (years) (years) (tonnes)
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Estonia 42.9 +28.8 77.1 0.308 15.9 7.9
Hungary
UK
39.9
59.1
+16.7
+3.5
74.5
80.7 IC0.300
0.351
15.0
17.3
5.0
4.9
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Source: OECD & WHO, 2022
Extract B: The UK’s productivity puzzle
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The economist Paul Krugman once wrote that “Productivity isn’t everything, but, in the long-run,
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it is almost everything”. Productivity is a key determinant of living standards because it affects
the amount of goods and services that can be produced, and therefore consumed, from the
resources that are available. Historically, productivity has increased over time, which has
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contributed to real wage rises and improved living standards. Although productivity can be 5
measured in several different ways, one common way is GDP per hour worked.
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When economies move through their economic cycles, it is not unusual for productivity to fall
during downturns, as happened in 2008–2009. However, the persistently low rate of growth of
productivity that the UK has experienced since 2010 is unusual. Productivity growth in other
nations, including Estonia and Hungary, has been much higher. The UK’s low rate of 10
productivity growth is often referred to as ‘The UK’s productivity puzzle’. If the pre-2007 trend in
productivity growth had continued, UK productivity would now be over 30% higher than it is
today.
Many economists have tried to provide reasons for the productivity puzzle. Among the
suggestions are low levels of investment and the impact of the financial crisis on banks’ 15
willingness to lend to new businesses. More people working beyond normal retirement age has
led to an older workforce and may have affected productivity. These factors may be relevant but
they do not provide a complete explanation for the weakness in UK productivity growth.
So, what can be done to raise productivity? Investing in human capital to improve people’s skills
and supporting improvements in technology should help. Creating a stable economy and 20
effective use of the tax and benefits system are also key factors in driving productivity growth.
Source: News reports, 2022
IB/H/Jun24/7136/2
Page 2 of 8
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