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AQA Economics - Unit 2 A level Exam Questions and Answers
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AQA Economics - Unit 2 A level Exam Questions and Answers
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AQA Economics - Unit 2 A level ExamQuestions and Answers
What is the equation for AD? - Answer>> C + I + G + (X - M)
What is the definition of Aggregate Demand? - Answer>> The
total demand for goods and services within an economy at a
given price level.
What is the definition of Aggregate Supply? - Answer>> The
total value of goods and services supplied within an economy at a
given price level.
How is the performance of the UK economy assessed? -
Answer>> TIGER - Balance of Trade, Low Inflation, Sustainable
Growth, Full Employment & an Equal Redistribution of Income.
Define economic growth. - Answer>> An increase in the real
value of goods and services produced in an economy.
How is economic growth measured? - Answer>> GDP - Gross
Domestic Product
GNP - Gross National Product
What is the difference between GDP and GNP? - Answer>>
GNP includes net income from foreign investors, whereas GDP
does not.
What is the difference between nominal and real GDP? -
Answer>> Real GDP is adjusted for inflation whereas nominal
is not.
, Define 'negative output gap'. - Answer>> Where actual growth
is below trend growth, this means low levels of output and higher
levels of unemployment. Also, there is a large margin of spare
productive capacity.
Define 'positive output gap'. - Answer>> Where actual growth is
above trend growth, this means high levels of output and
employment. Leads to trade offs.
What is the accelerator effect? - Answer>> Where planned
capital investment is linked positively to the expected growth of
national income.
Define 'appreciation'. - Answer>> A rise in the market value of
one exchange rate against another.
What is a trade-off? - Answer>> Where one macro-economic
objective has to be curtailed in favour of another objective.
What is 'austerity'? - Answer>> An economic policy aimed at
reducing a government's deficit.
Define 'brain drain'. - Answer>> The movement of highly skilled
people from their own country to another nation.
What is a budget deficit? - Answer>> Occurs when government
spending is greater than it's tax revenues.
How are budget deficit's reduced? - Answer>> Tax increases or
cuts in government spending.
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