100 marks · 18 question parts · Paper, mark scheme and report on Pearson's site
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A
Quantitative skills: QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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In this question the focus is on making the link between the data on unemployment and the circular flow of income. The marks are divided up into 2 for knowledge, 1 for application, and 1 for analysis. There are several ways of achieving the knowledge marks, including through drawing a circular flow of income diagram. The application mark needs to come from being able to interpret the data and understand that the figure shows a fall in unemployment. The analysis is for explaining what impact a drop in unemployment would have on the circular flow of income. The main issue that candidates faced here was failing to correctly see that the chart shows a drop in unemployment. This often meant that candidates were unable to achieve very many marks, since it often led on to incorrect analysis. This answer scores 3/4 marks. The candidate has correctly identified that unemployment has fallen. They then go on to achieve 1 knowledge mark for identifying that this would increase the circular flow of income. The final mark comes from analysis, explaining the link between falling unemployment and an increase in the circular flow of income. Focus on answering the question – there are no marks here for defining unemployment since that is not what has been asked. This answer scores the full 4 marks available. The application is referring to a fall in unemployment. The knowledge for referring to specific injections/ leakages and the impact on the circular flow of income. Finally, the analysis is towards the end of the answer for explaining why falling unemployment would increase the circular flow via a higher multiplier.
Quantitative skills: QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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Most candidates found this to be a straightforward question. There are 2 marks available for knowledge, 1 mark for the reason and 1 mark for an explanation of that reason. If candidates failed to score full marks on this question it was generally either because they misread the data or they failed to explain their reason for the second mark. Most candidates explained the impact of falling interest rates reducing the incentive to save. This answer scores the full 2 marks. The candidate has identified falling interest rates and clearly explained why it would lead to a lower MPS. Be clear and concise in these short questions.
Quantitative skills: QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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In this question, like 2(a), the marks are again split as 1 for identifying the impact on the multiplier and 1 for explaining it. Many candidates achieved the full 2 marks here. The main problem that let candidates down was not being clear about their multiplier formulas and therefore making mistakes when they tried to use them. This answer scores only 1/2 marks because the candidate has only identified their reason, they have not explained it. Don't define everything in the question when you haven't been asked to – focus on precisely what the question has asked you. This answer scores the full 2 marks. The candidate has used the multiplier formula to explain why the multiplier would increase when MPS falls. Ensure you know key formulas like the multiplier. In particular, remember that there are several different ways of calculating the multiplier. 9EC0_02_Q02b_1291573_01.png This answer scores zero as unfortunately the candidate doesn't have the correct formula for the multiplier and therefore they incorrectly think that the value of the multiplier would fall.
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D
Quantitative skills: QS 1 (calculate, use and understand ratios and fractions)
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B
Quantitative skills: QS 10 (distinguish between changes in the level of a variable, and the rate of change); QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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This question is focused on how to calculate the Consumer Prices Index (CPI). The question specifically asks candidates to do two things as part of their explanation – to refer to the chart provided and also to explain the concept of weights. Unfortunately, many candidates didn't read the question carefully and these were often missing from answers. This limits the mark a candidate can receive. In terms of weights, there was often simply a repetition of the word rather than an explanation of what it actually means. This answer scores only 2/4 marks. The candidate receives the knowledge marks for their explanation of how CPI is calculated. However, there is no explanation of weights or reference to the chart, and therefore the highest mark they can receive is 2/4. This answer scores 3/4 marks. There are several points that earn the two knowledge marks available. There is also an explanation of weights for the analysis mark. However, there is no application, so only a maximum of 3/4 marks can be achieved. Remember to apply the data when asked to do so.
Quantitative skills: QS 5 (calculate and interpret index numbers); QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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In this question, candidates need to make sure they identify what has happened to inequality and offer a specific reference to the data provided. They then need to apply and analyse one reason for why inequality has fallen. As with earlier questions, a common theme that is costing candidates marks is an inability to correctly interpret data. For example, if a candidate incorrectly thinks the diagram shows a rise in inequality it is very difficult for them to then gain very many marks. Having said that, the majority of candidates did offer a relevant point with good analysis. Make sure you know what values mean for key measurements such as the Gini coefficient. This answer scores 2/4 marks. The candidate has correctly identified that the Gini coefficient has fallen and their data points are correct. They achieve 2 marks for this. Unfortunately, the candidate thinks this means that inequality has increased, and as such the rest of their answer cannot achieve any marks. This answer scores the full 4 marks. The candidate has correctly referred to the chart and explained how the national minimum wage could explain why income inequality has fallen.
Quantitative skills: QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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A
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Quantitative skills: QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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This question asks for two limitations of the HDI to compare levels of development. Many candidates wasted valuable time explaining what the HDI is and how it is calculated rather than getting on and answering the question. A wide variety of limitations could be discussed here. The fact that it doesn't take into account income inequality was a popular one. Candidates also needed to remember to refer to the data they had been provided with about Vietnam and India as part of their answer. This answer achieves 3/4 marks. The candidate has correctly identified 2 reasons along with plenty of analysis. However, there is no application in the answer so they cannot achieve more than 3 marks. This answer also scores 3/4 marks. In contrast to the earlier answer, there is application. There is also some knowledge and analysis. However, the candidate has only discussed one limitation so only 1/2 for knowledge can be awarded, hence a maximum mark of 3/4.
Quantitative skills: QS 11 (understand composite indicators); QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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This answer is a straightforward percentage change calculation. Most candidates were able to answer this question easily and achieve the full 5 marks. Some candidates forgot the minus (or a reference to decrease or similar) and as such scored 4/5 marks. This question also demonstrates the need for candidates to know key calculations such as percentage change. This answer scores 4/5 marks. They have the correct value but have not appreciated that this is a decrease in the exchange rate. This candidate has calculated the correct answer and as such achieves full marks. Always ensure you know how to calculate percentage change and other similar calculations.
Quantitative skills: QS 2 (calculate, use and understand percentages, percentage changes and percentage point changes); QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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In this question the marks are evenly divided between knowledge, application, analysis, and evaluation (2 marks for each). Again, it is important that candidates appreciate that there has been a continuous fall in the rate of inflation since 2011, as shown in figure 2. This needs to be the basis for their answer. There are a wide variety of reasons that candidates put forward to explain this and all relevant reasons were credited. Candidates also needed to offer some evaluation of their answer. This is where many answers were lacking – candidates simply didn't evaluate, and as such missed out on 2 marks. Make sure you have two distinct reasons. In the pressure of an exam it can be easy to forget what you have already written about. This answer scores 4/8 marks. The candidate unfortunately only has one reason – falling growth/AD. There is also no evaluation. Their application is good and their knowledge and analysis of their one point is good, but 4/8 is the highest they can score in this situation. This answer scores 6/8 marks. The candidate offers 2 good reasons, along with analysis and application. Unfortunately there is no evaluation, so they cannot gain more than 6 marks. Always remember to evaluate in these 8-mark 'examine' questions.
Quantitative skills: QS 10 (distinguish between changes in the level of a variable, and the rate of change); QS 9 (interpret, apply and analyse information in written, graphical tabular and numerical forms)
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This is the first of the 'levels' marked questions on this paper. This means examiners are not looking to award specific marks for knowledge, application, etc. but that the focus shifts to the level descriptors. Candidates need to ensure they are familiar with these descriptors and that they understand what is required to reach the top levels. For this question specifically, candidates needed to explain how an appreciation would affect the balance of payments of Eurozone countries. So the focus should be on changing prices of imports and exports. The majority of candidates picked up on this but the stronger ones were able to clearly explain the process and put their answer in context. There are 6 marks for KAA here and 4 for evaluation. This answer scores full marks. The candidate has very clearly explained the impact of an appreciation on the balance of payments, in the process demonstrating accurate knowledge and understanding and linking this in context – which clearly fits the KAA criteria for level 3. They have also convincingly evaluated their argument using the Marshall-Lerner condition and the J-curve. This answer is relatively concise yet it achieves very highly – remember the emphasis of the levels mark scheme is very much on quality over quantity.
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This question is focused on the effectiveness of quantitative easing in impacting upon Eurozone inflation. The stronger answers showed an understanding of what quantitative easing is and how it works, whilst the weaker ones were not at all certain about the process. This was the main obvious issue in this question. Evaluation was generally present and relevant; although sometimes candidates need to be sure they are explaining/justifying their evaluation points – not just stating them. This is a good, solid answer but not quite up to the same standard as the previous one. It reaches level 3 for KAA but for evaluation only level 1. The points are relevant but they are really just stated and lack relevant reasoning. The overall mark for this answer is 7/10. Where relevant, always draw diagrams to aid your explanation. This is a very high quality answer that clearly demonstrates a solid understanding of quantitative easing, as well as its effect on AD and therefore inflation (including an AD/AS diagram). The answer is also in context, both in the KAA and the evaluation. Overall this answer scores full marks – 12/12. This is a reasonable attempt to answer the question which includes good context. However, it is lacking a clear explanation of the process of quantitative easing. There is some brief evaluation at the end about the size of the multiplier and short/long run. Overall this answer gets 4 marks for KAA and 2 for evaluation – 6/12.
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There are two parts to this question, and it is important that candidates discuss both fiscal and supply-side policies. Candidates also need to remember that the question specifically asks how they could be used to increase economic growth, so this needs to be part of the explanation of the policies. The policies also need to be evaluated, and here the number of marks for evaluation has increased to 6. This is a high quality answer that clearly addresses the demands of the question. It starts off with an explanation of fiscal policy, both in terms of less tax and then increased government spending. There is also an AD/AS diagram to back up the explanation. This explanation is a solid level 3 answer. This is followed up by some brief evaluation that is only really worthy of level 1. The candidate then goes on to discuss the supply side of the economy, talking about infrastructure and education. However, this is much less well-explained than the previous part and is only a level 2 response. This is evaluated with a discussion about time lags and a good, detailed evaluation in relation to the budget deficit. Overall this answer is level 3 for KAA and level 2 for evaluation. This answer is less weaker, achieving level 2 for KAA and level 1 for evaluation. Fiscal policy is fairly well-explained although there is a lack of context, so overall a level 2 answer. The evaluation regarding magnitude is relevant but only at level 1. There is then some mention of subsidies for renewable energy but it's not clear how this is a supply-side policy. This is followed by an attempt at evaluation. The conclusion is not needed and it doesn't really add anything to the answer. Conclusions are not needed in these questions. A judgement is needed in the 25-mark questions only.
This question was the more popular of the two essay questions. Candidates are asked to evaluate the effects of an increase in protectionism on the economy of a developing country of their choice. One point to note here is that this question asks specifically for an evaluation of the effects. This question is not asking what the benefits and downsides of protectionism are. This is where many candidates struggled with their evaluation points. As always, it is important to read the question carefully and make sure you are precisely answering what you have been asked. Many candidates drew a tariff diagram and used this to help them explain the effects of this method of protectionism. It is also important to note that candidates could answer this question either from the point of view of a developing country imposing protectionist policies on imports or on a developing country having protectionist policies placed on its exports by other countries. 9EC0_02_Q07_1291601_0429_003750899_030.png This answer starts off rather vague with some attempts to make points which are partly relevant to the question. It gets better when we have a tariff diagram and relevant explanation of the effects of a tariff, using the diagram to aid the analysis. There are some errors in this answer, for example the discussion about elasticity. The candidate doesn't fully address the demands of the question; as such this answer overall is a level 2 answer for both KAA and evaluation. It does display elements of knowledge and these are related to the economic problem in context. However it is fairly narrow and not focusing on the broad elements of the question. Similarly for evaluation, there is evidence and it has some supporting reasoning but it is not fully developed. This answer initially focuses on the extra government revenue that a tariff would generate and includes a tariff diagram to back up this point. This is followed by some good evaluation discussing the risk of retaliation. There is also good context in relation specifically to Kenya. The competitiveness point is relevant but not as well-explained as the earlier point and it is followed by an attempt at some relevant evaluation. The answer concludes with a reasonable attempt at a judgement. However the rest of the evaluation is not sufficient to push this answer into level 3 for evaluation. Overall this answer achieves a low level 4 for KAA and level 2 for evaluation. Remember to use relevant diagrams to explain your analysis, like this answer has done.
This was the less popular of the two essay questions, although it was still completed by several thousand candidates. The focus here is on the significant fall in oil prices and how this might affect the macro economy. It is another broad, open question that candidates can approach from a number of different angles. For example, they could consider oil importers and oil exporters and how they would be affected differently. Similarly to question 7, the focus here is on evaluating consequences – so the evaluation needs to be of the consequence. It was also important for candidates to remember that they are asked specifically for macroeconomic consequences and as such microeconomic consequences are not relevant in this question. This is a good answer which starts off discussing the impact of the drop in the oil price on aggregate supply, coupled with a relevant diagram. It drifts off-topic towards the end of the point. The next point is better, clearly explaining what the impact on the current account would be. However, the diagram is not relevant to the point being made. There is some good evaluation regarding alternative fuels to oil and also an attempt at a judgement. Overall this answer is nearly there, but not quite. It achieves level 3 for KAA and level 2 for evaluation. This answer starts with the impact on both consumers and firms of cheaper oil prices and does a good job of explaining these. However it then starts to discuss microeconomic consequences for specific firms. In addition, the idea that oil prices will definitely 'shoot up' just because they've dropped dramatically isn't explained. Increased pollution is another relevant issue as well as the possibility of greener alternatives. Overall this answer is a solid level 2 for both KAA and evaluation. It fails to go beyond the criteria for this level and is too microeconomic in places. Remember this is a macroeconomics paper so your answer needs to focus on this.
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