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O-LevelEconomicsGovernment and the macroeconomy2281/22 · Oct/Nov 2019 · Q220 Marks

It is predicted that the UK economy will avoid another recession in the next two decades and that its population will increase significantly by 2040. Most of this predicted increase will come from immigration. By 2040, it is also expected that one in twelve people will be aged over 80. A number of countries, including some low-income countries, may have a more rapid population growth rate than high-income countries.

  1. (a)Identify two reasons why people are living longer.[2]
  2. (b)Explain two reasons why net immigration may increase the standard of living in a country.[4]
  3. (c)Analyse how fiscal policy could be used to stop a recession.[6]
  4. (d)Discuss whether or not low-income countries have a faster rate of population growth than high-income countries.[8]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

  1. [1] (a) better healthcare
  2. [1] (a) improved nutrition
  3. [1] (a) better housing
  4. [1] (a) better living standards
  5. [1] (a) higher incomes
  6. [1] (b) May increase the size of the labour force
  7. [1] (b) increase the number of goods and services available / increase output / increase GDP / economic growth
  8. [1] (b) May bring in new skills
  9. [1] (b) raise productivity
  10. [1] (b) increase the quality of products produced
  11. [1] (b) Fill jobs that local workers do not want to do
  12. [1] (b) reduce shortages
  13. [1] (b) Fill jobs that local workers do not have the qualifications to do
  14. [1] (b) reduce shortages
  15. [1] (b) Increase total (aggregate) demand
  16. [1] (b) which will encourage firms to increase their output
  17. [1] (b) Make better use of other resources
  18. [1] (b) if the country lacks labour / is underpopulated
  19. [1] (b) Increase tax revenue
  20. [1] (b) enabling government to spend more on e.g. education
  21. [1] (b) Immigrants may set up firms
  22. [1] (b) creating jobs / reducing unemployment / purchasing power
  23. [1] (b) May lower costs of production
  24. [1] (b) make products more affordable
  25. [1] (c) The government could cut taxes
  26. [1] (c) this could raise disposable income / purchasing power
  27. [1] (c) which may increase consumer spending
  28. [1] (c) cuts in corporate tax may provide more funds for firms
  29. [1] (c) raise investment
  30. [1] (c) encourage firms to expand their output
  31. [1] (c) increase employment / reduce unemployment
  32. [1] (c) A government could increase its own spending
  33. [1] (c) example e.g. healthcare
  34. [1] (c) this would increase total (aggregate) demand
  35. [1] (c) encouraging an increase in output
  36. [1] (c) Spending on infrastructure
  37. [1] (c) may reduce firms costs and so encourage higher output
  38. [1] (d) Some have a high birth rate
  39. [1] (d) reasons e.g. low number of women working,
  40. [1] (d) need for children to support parents in old age
  41. [1] (d) lack of education
  42. [1] (d) falling death rate
  43. [1] (d) natural increase
  44. [1] (d) due to improved healthcare
  45. [1] (d) rise in incomes
  46. [1] (d) Some high-income countries experience a high rate of net immigration
  47. [2] (d) factors attracting immigrants e.g. job opportunities, high income
  48. [1] (d) Some low-income countries experience net emigration
  49. [1] (d) Some low-income countries experience natural disasters and wars
  50. [1] (d) poor health care
  51. [1] (d) which increase the death rate
  52. [1] (d) Some high-income countries are experiencing a fall in the death rate
  53. [2] (d) causes e.g. improved living standards, advances in medicines
  54. [1] (d) although birth rates falling
  55. [1] (d) governments may provide incentives to try to raise the birth rate
  56. [1] (d) including financial aid / free child care

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About this question

Topic
Government and the macroeconomy, O-Level Economics (syllabus 2281). Structured question, 20 marks.
Source
O-Level Economics, Oct/Nov 2019 Paper 2 Variant 2, question 2.

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