Oxford Cambridge and RSA
May 2026 – Afternoon
A Level Economics
H460/02 Macroeconomics
Time allowed: 2 hours
You can use:
• a scientific or graphical calculator
Please write clearly in black ink. Do not write in the barcodes.
Centre number Candidate number
First name(s)
Last name
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.
OCR A Level Economics Macroeconomics (H460/02) Question Paper And
Mark Scheme
, 2
Section A
Read the stimulus material and answer all parts of Question 1.
What is the future for Bolivia?
Export tariffs and quotas are imposed by a number of countries. Reducing exports can increase domestic
supply which can affect the price of products sold on the home market and the country’s tax revenue. It
can also affect the supply of the country’s raw materials available to rival foreign producers.
Both Argentina and Bolivia, impose export tariffs on soya beans. Argentina also imposes an 5
export tariff on lithium, a rare earth metal used in the production of electric cars. Bolivia has the world’s
largest resources of lithium which it is just beginning to extract. Bolivia already mines gold, silver, nickel
and other natural metals. Mining is part of the primary sector. Fig. 1 shows the share of the labour force
in the different sectors in Argentina and Bolivia in 2021.
Fig. 1
Share of the labour force in the different sectors in Argentina and Bolivia 2021
Primary sector Secondary
sector Tertiary sector
Argentina Bolivia
27%
28%
49%
63%
24%
5%
Exporting lithium can affect Bolivia’s terms of trade and the current account of its balance of 10
payments. In 2021, Bolivia’s terms of trade were 62 and its index of average export prices was
85.56. In that year, Bolivia had a surplus on its current account. It also had the lowest inflation rate in
South America.
Fig. 2 shows the inflation rate and current account balance as a percentage of GDP of selected countries in
2021, when the global average inflation rate was 3.5%. 15
, 3
Fig. 2
The inflation rate and current account balance as a percentage of GDP of selected countries 2021
3
Bolivia
2
China
1
0 Canada
0 1 2 3 4 5 6 7
–1 Paraguay
Current account
balance as 2
Peru
% of GDP
3
Bangladesh
–4
–5
–6
Chile
–7
Inflation rate(%)
A current account surplus can put upward pressure on a country’s exchange rate. There are, however,
other influences on a country’s exchange rate. Bolivia has a fixed exchange rate against the US dollar.
This fixed exchange rate has provided some certainty and is credited with helping to keep inflation low.
In 2023, speculation put downward pressure on the exchange rate.
Bolivia’s central bank, Banco Central de Bolivia, intervened to support the value of the boliviano 20
which significantly reduced the country’s foreign exchange reserves.
As well as maintaining the exchange rate, the Banco Central de Bolivia manages the country’s national
debt. A country’s national debt increases as a result of government budget deficits.
Bolivia has had a government budget deficit for many years. A relatively high proportion of
Bolivians work in the informal economy and do not pay any income tax. The country has a 25
relatively low flat rate of income tax of 13%. Some economists suggest that a rise in this rate of income tax
would increase government tax revenue and reduce the budget deficit. Others have suggested that Bolivia
should introduce a progressive income tax system. Bolivia has the highest income inequality in South
America, that is gradually reducing.
Bolivia has a standard rate of VAT of 13%. Additional indirect taxes are imposed on other 30
products such as cigarettes, alcohol and luxuries, including perfume and cosmetics.
Turn over
, 4
1
(a) Using information from the stimulus material, identify two reasons for imposing export tariffs.
1. ......................................................................................................................................................
..........................................................................................................................................................
2. ......................................................................................................................................................
..........................................................................................................................................................
[2]
(b) Using Fig. 1, explain how Bolivia’s level of development compared to Argentina’s level of
development in 2021.
..........................................................................................................................................................
..........................................................................................................................................................
..........................................................................................................................................................
. .................................................................................................................................................................... [2]
(c) Calculate Bolivia’s index of average import prices in 2021.
..........................................................................................................................................................
..........................................................................................................................................................
..........................................................................................................................................................
. .................................................................................................................................................................... [2]
May 2026 – Afternoon
A Level Economics
H460/02 Macroeconomics
Time allowed: 2 hours
You can use:
• a scientific or graphical calculator
Please write clearly in black ink. Do not write in the barcodes.
Centre number Candidate number
First name(s)
Last name
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.
OCR A Level Economics Macroeconomics (H460/02) Question Paper And
Mark Scheme
, 2
Section A
Read the stimulus material and answer all parts of Question 1.
What is the future for Bolivia?
Export tariffs and quotas are imposed by a number of countries. Reducing exports can increase domestic
supply which can affect the price of products sold on the home market and the country’s tax revenue. It
can also affect the supply of the country’s raw materials available to rival foreign producers.
Both Argentina and Bolivia, impose export tariffs on soya beans. Argentina also imposes an 5
export tariff on lithium, a rare earth metal used in the production of electric cars. Bolivia has the world’s
largest resources of lithium which it is just beginning to extract. Bolivia already mines gold, silver, nickel
and other natural metals. Mining is part of the primary sector. Fig. 1 shows the share of the labour force
in the different sectors in Argentina and Bolivia in 2021.
Fig. 1
Share of the labour force in the different sectors in Argentina and Bolivia 2021
Primary sector Secondary
sector Tertiary sector
Argentina Bolivia
27%
28%
49%
63%
24%
5%
Exporting lithium can affect Bolivia’s terms of trade and the current account of its balance of 10
payments. In 2021, Bolivia’s terms of trade were 62 and its index of average export prices was
85.56. In that year, Bolivia had a surplus on its current account. It also had the lowest inflation rate in
South America.
Fig. 2 shows the inflation rate and current account balance as a percentage of GDP of selected countries in
2021, when the global average inflation rate was 3.5%. 15
, 3
Fig. 2
The inflation rate and current account balance as a percentage of GDP of selected countries 2021
3
Bolivia
2
China
1
0 Canada
0 1 2 3 4 5 6 7
–1 Paraguay
Current account
balance as 2
Peru
% of GDP
3
Bangladesh
–4
–5
–6
Chile
–7
Inflation rate(%)
A current account surplus can put upward pressure on a country’s exchange rate. There are, however,
other influences on a country’s exchange rate. Bolivia has a fixed exchange rate against the US dollar.
This fixed exchange rate has provided some certainty and is credited with helping to keep inflation low.
In 2023, speculation put downward pressure on the exchange rate.
Bolivia’s central bank, Banco Central de Bolivia, intervened to support the value of the boliviano 20
which significantly reduced the country’s foreign exchange reserves.
As well as maintaining the exchange rate, the Banco Central de Bolivia manages the country’s national
debt. A country’s national debt increases as a result of government budget deficits.
Bolivia has had a government budget deficit for many years. A relatively high proportion of
Bolivians work in the informal economy and do not pay any income tax. The country has a 25
relatively low flat rate of income tax of 13%. Some economists suggest that a rise in this rate of income tax
would increase government tax revenue and reduce the budget deficit. Others have suggested that Bolivia
should introduce a progressive income tax system. Bolivia has the highest income inequality in South
America, that is gradually reducing.
Bolivia has a standard rate of VAT of 13%. Additional indirect taxes are imposed on other 30
products such as cigarettes, alcohol and luxuries, including perfume and cosmetics.
Turn over
, 4
1
(a) Using information from the stimulus material, identify two reasons for imposing export tariffs.
1. ......................................................................................................................................................
..........................................................................................................................................................
2. ......................................................................................................................................................
..........................................................................................................................................................
[2]
(b) Using Fig. 1, explain how Bolivia’s level of development compared to Argentina’s level of
development in 2021.
..........................................................................................................................................................
..........................................................................................................................................................
..........................................................................................................................................................
. .................................................................................................................................................................... [2]
(c) Calculate Bolivia’s index of average import prices in 2021.
..........................................................................................................................................................
..........................................................................................................................................................
..........................................................................................................................................................
. .................................................................................................................................................................... [2]
