Edexcel A Level Economics A
Edexcel A Level Economics A 2.1 Measures of Economic Performance Exam Questions
Free Edexcel A Level Economics A exam questions on 2.1 Measures of Economic Performance, with mark schemes. Covers GDP, inflation, unemployment and the balance of payments.
2.1 Measures of Economic Performance exam questions
1 question pack of real past exam questions with its mark scheme. Answer every question without notes, then mark your answers line by line against the mark scheme.
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Edexcel A Level Economics A 9EC0 Flashcards (Anki & Quizlet)
Every answer is written in mark scheme wording, so you learn exactly what examiners give marks for. Use them on Anki or Quizlet, then test yourself with the questions on this page.
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About Edexcel A Level Economics A 2.1 Measures of Economic Performance
2.1 introduces the four headline measures used to judge how an economy is performing. Questions often give you data to interpret, so practise reading index numbers, real versus nominal figures and percentage changes.
What you need to know
- Economic growth Real GDP measures output adjusted for inflation. Know nominal versus real, total versus per capita, GDP versus GNI, and the limits of GDP for comparing living standards, including the role of national happiness measures.
- Inflation The sustained rise in the general price level. Know how CPI is calculated from a weighted basket, the limits of CPI and RPI, and the causes and effects of inflation and deflation.
- Employment and unemployment Know the claimant count and Labour Force Survey measures, types of unemployment (structural, frictional, seasonal, cyclical), real wage unemployment, and underemployment.
- Balance of payments The current account records trade in goods and services, primary income and secondary income. Know the causes and possible consequences of current account imbalances.
Common mistakes in 2.1 Measures of Economic Performance
- Using nominal GDP to claim the economy grew, when the rise may be inflation.
- Saying falling inflation means prices are falling. Prices are still rising, just more slowly.
- Confusing the claimant count with the ILO Labour Force Survey measure.
- Treating a current account deficit as automatically bad without considering how it is financed.
Try three 2.1 Measures of Economic Performance exam-style questions
1. Distinguish between real GDP and nominal GDP. (2 marks)
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Nominal GDP is measured at current prices (1). Real GDP is adjusted for inflation, so it measures the change in actual output (1).
2. Explain one limitation of using CPI to measure the cost of living for an individual household. (2 marks)
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CPI is based on an average basket of goods (1), so a household whose spending pattern differs, for example a pensioner spending more on heating, may face a different inflation rate (1).
3. Explain why cyclical unemployment rises during a recession. (3 marks)
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In a recession aggregate demand falls (1), so firms sell less and reduce output (1). Labour is a derived demand, so firms cut jobs, increasing cyclical (demand-deficient) unemployment (1).
2.1 Measures of Economic Performance FAQs
What does Edexcel A Level Economics 2.1 cover?
Economic growth, inflation, employment and unemployment, and the balance of payments: how each is measured, and what causes and follows from changes in each.
Do I need to calculate inflation from an index?
Yes. Percentage change = (new index minus old index) divided by old index, multiplied by 100.
Which paper is 2.1 examined in?
Theme 2 is examined in Paper 2, The national and global economy, and in the synoptic Paper 3.
Revise this topic with flashcards: Edexcel A Level Economics A 9EC0 Flashcards, with mark scheme answers for Anki and Quizlet.
