Edexcel A Level Economics B
Edexcel A Level Economics B 2.5 Economic Growth Exam Questions
Free Edexcel A Level Economics B exam questions on 2.5 Economic Growth, with mark schemes. Covers actual and potential growth, the trade cycle and the effects of growth.
2.5 Economic Growth 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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A Level Economics Flashcards
Every answer is written in mark scheme wording, so you learn exactly what examiners give marks for. Pick your exam board, then test yourself with the questions on this page.
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About Edexcel A Level Economics B 2.5 Economic Growth
This part of 2.5 explains the causes and consequences of growth. Questions often ask you to evaluate growth for firms, consumers and the environment.
What you need to know
- Actual and potential growth Actual growth is rising real GDP; potential growth is rising productive capacity.
- Output gaps Positive gaps bring inflationary pressure; negative gaps bring unemployment.
- The trade cycle Boom, slowdown, recession and recovery, and their effects on firms.
- Benefits and costs Higher living standards and tax revenue, against inflation, inequality and environmental damage.
Common mistakes in 2.5 Economic Growth
- Treating actual and potential growth as the same.
- Ignoring the costs of growth.
- Defining recession vaguely instead of two consecutive quarters of negative growth.
Try three 2.5 Economic Growth exam-style questions
1. Define potential economic growth. (2 marks)
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An increase in the productive capacity of the economy (1), shown by an outward shift of the PPF or LRAS (1).
2. Explain one effect of a recession on a car manufacturer. (2 marks)
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Cars have high income elasticity (1), so falling incomes reduce demand sharply and the firm's sales and profits fall (1).
3. Explain one cost of economic growth. (2 marks)
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Growth may increase pollution and resource depletion (1), damaging the environment and future living standards (1).
2.5 Economic Growth FAQs
What does 2.5 Economic Growth cover?
Causes of growth, output gaps, the trade cycle and the benefits and costs of growth.
How is a recession defined?
Two consecutive quarters of negative real GDP growth.
What is an output gap?
The difference between actual output and potential output.
Revise this topic with flashcards: A Level Economics Flashcards, with mark scheme answers for Anki and Quizlet.
