Pearson Edexcel GCE AS Level In Economics A (8EC0)

Mark Scheme (Results) Summer 2024 Pearson Edexcel GCE AS Level In Economics A (8EC0) Paper 02 The UK Economy – Performance and Policies General marking guidance • All candidates must receive the same treatment. Examiners must mark the last candidate in exactly the same way as they mark the first. • Mark schemes should be applied positively. Candidates must be rewarded for what they have shown they can do rather than be penalised for omissions. • Examiners should mark according to the mark scheme – not according to their perception of where the grade boundaries may lie. • All the marks on the mark scheme are designed to be awarded. Examiners should always award full marks if deserved, i.e. if the answer matches the mark scheme. Examiners should also be prepared to award zero marks if the candidate’s response is not worthy of credit according to the mark scheme. • Where some judgement is required, mark schemes will provide the principles by which marks will be awarded and exemplification/indicative content will not be exhaustive. • When examiners are in doubt regarding the application of the mark scheme to a candidate’s response, a senior examiner must be consulted before a mark is given. • Crossed-out work should be marked unless the candidate has replaced it with an alternative response. Summer 2024 Question Paper Log Number 72019 Publications Code 8EC0_02_2406_MS All the material in this publication is copyright © Pearson Education Ltd 2024 Question Number Answer Mark 1(a) The only correct answer is A B is not correct because this is when actual economic growth is less than potential economic growth C is not correct because this is when actual economic growth is greater than potential economic growth D is not correct because this is the increase in productive capacity of the economy (1) Question Number Answer Mark 1(b) Knowledge 1, Application 1, Analysis 1 Knowledge/understanding: 1 mark for identifying one limitation, e.g. does not consider • exchange rates (1) • population growth (1) • presence of informal and unpaid economy (1) • subsistence, barter and the hidden economy (1) • income inequality/distribution of income (1) Application: 1 mark for reference to the information provided for e.g. • Real GDP increase in developing countries is higher than developed countries (1) / • Difference of 2.9 pp in growth rates (1) • Reference to own example (1) Analysis: 1 mark for linked development, e.g. • Exchange rates might not accurately reflect the differences in purchasing power of currencies (1) • Population growth accounts for most of the growth in developing countries (1) • Presence of informal and unpaid economy will imply that some output is unrecorded (1) • Subsistence, barter and the hidden economy will undervalue real output (1) • In some countries, wealth is concentrated in the hands of a few high income households (1) (3) Question Number Answer Mark 2(a) Knowledge 1 Knowledge: 1 mark for definition, e.g. • It is the proportion of extra income that is spent on consumption (1) • The additional consumer spending from an increase in national income (1) • Change in consumption/change in income (∆C/∆Y) (1) Question Number Answer Mark 2(b) Knowledge 2 Knowledge/understanding: 2 marks for, e.g. • Increase in employment/disposable income (1) so increases purchasing power/greater affordability (1) • Lower interest rates (1) so reduces the cost of borrowing/reward for savings (1) • Increase in consumer confidence (1) due to greater job security and raises consumer spending (1) • Positive wealth effects (1) so increases confidence and raises consumer spending (1) (2) Question Number Answer Mark 2(c) The only correct answer is D A is not correct because this figure is determined by (1-0.8) B is not correct because this figure is determined by (1x0.8) C is not correct because this figure is determined by (1/0.8) (1) Question Number Answer Mark 3(a) The only correct answer is C A is not correct because between September 2013 and September 2016, there were over 150 000 more people entering the UK B is not correct because immigration to the UK is likely to affect the country’s long-run AS curve (1) D is not correct because emigration throughout the given period has remained relatively stable Question Number Answer Mark 3(b) Knowledge 1, Application 1, Analysis 1 Knowledge/understanding: 1 mark for identifying one likely effect, e.g. • Increase employment (1) • Increased demand for labour (1) • Increased supply of labour (1) Application: 1 mark for reference to the chart, for e.g. • Immigration to the UK fell after the financial crisis/ EU referendum (1) / • Immigration increased once the economy started to recover from the financial crisis (1) • Emigration increased from 350 000 to 400 000 between September 2016 and September 2019 (1) Analysis: 1 mark for linked development, e.g. • Increased size of population (1) • Increased consumer spending will create more jobs (1) • Increased demand for public services (1) • Immigrants may fill job vacancies that domestic people are unable to fill (1) NB Accept references made to either the impact of immigration or emigration on employment (3) Question Number Answer Mark 4(a) Knowledge 1 Knowledge/understanding: 1 mark for definition, e.g. • Increase in the capital stock of the economy (1) • An injection into the circular flow of income (1) • Spending by firms on capital goods (1) (1) Question Number Answer Mark 4(b) Application 2 Application: 2 marks for, • Correct leftward shift of AD (1) • Correct new equilibrium point showing lower price level and lower real output (1) (2) Question Number Answer Mark 4(c) The only correct answer is A B is not correct because this will reduce cost of production for firms leading to an increase in investment C is not correct because this will increase revenues for firms leading them to increase investment D is not correct because firms will increase investment as they expect future demand to rise (1)