7136-2-AQA ECONOMICS-A-QUESTION PAPER 22May23-A-level ECONOMICS Paper 2 National and International Economy
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Course
7136-2-AQA ECONOMICS-A
Institution
7136-2-AQA ECONOMICS-A
A-level
ECONOMICS
Paper 2 National and International Economy
Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
Corporation tax in Ireland
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A
Figure 1: Corp...
AQA
A-level
ECONOMICS
Paper 2 National and International Economy
Monday 22 May 2023 Afternoon Time allowed: 2 hours
Materials
For this paper you must have:
• an AQA 12-page answer book
• a calculator.
Instructions
• Use black ink or black ball-point pen. Pencil should only be used for drawing.
• Write the information required on the front cover of your answer book.
The Paper Reference is 7136/2.
• In Section A, answer EITHER Context 1 OR Context 2.
• In Section B, answer ONE essay.
Information
• The marks for questions are shown in brackets.
• The maximum mark for this paper is 80.
• There are 40 marks for Section A and 40 marks for Section B.
Advice
• You are advised to spend 1 hour on Section A and 1 hour on Section B.
IB/G/Jun23/E6 7136/2
, 2
Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
Corporation tax in Ireland
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A
Figure 1: Corporation tax rates (%) in selected Figure 2: Macroeconomic performance
European nations, 2021 indicators for selected
European nations, 2021
France Ireland Spain
GDP at current
2935 499 1202
prices ($bn)
Exports ($bn) 775 641 462
Inflation (%) 1.6 2.4 3.1
Unemployment
3074 127 3105
(thousands)
Labour force
31.0 2.5 23.3
(millions)
Note: Main tax rates only.
Some figures rounded. Source: Official statistics, 2022
Extract B: Irish corporation tax
Ireland has dropped its low-tax policy of the past 18 years, which had helped to persuade some
of the world’s biggest companies, including Google and Facebook, to site their European
headquarters in Ireland. Countries who are members of the Organisation for Economic
Co-operation and Development (OECD), have agreed to a minimum corporation tax rate of 15%.
Initially, Ireland was one of nine countries that refused to join the scheme but they have now all 5
agreed to do so.
The deal brings an end to the country’s 12.5% corporation tax rate that has applied since
January 2003, which has been criticised in other EU countries and the UK, where higher
corporation tax rates have applied. The new tax, which will be limited to firms with annual global
revenues of over €750m, will come into force in 2023. According to some estimates, it will cost 10
the Irish government between €800m and €2bn a year in lost tax revenue. Multinational
corporations (MNCs) located in Ireland and elsewhere, employing up to 500 000 staff, could be
affected.
Over the years, as a consequence of its low corporate tax policy, Ireland has attracted an
estimated 1000 MNCs in the technology, finance and pharmaceutical sectors, including Pfizer, 15
Intel, Yahoo, LinkedIn, TikTok, Apple, IBM and Twitter. Such is the importance of MNCs to the
Irish economy, that figures released in May showed that just 100 companies accounted for
almost 80% of government tax revenue. The figures exclude those sectors closed due to the
lockdown, including hospitality and travel, but showed Ireland’s reliance on MNCs for
employment and tax revenue. In 2020, about 32% of all jobs in Ireland were in MNCs and those 20
employees contributed 49% of all taxes on income.
Source: News reports, 2021
IB/G/Jun23/7136/2
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