Jan 10 Unit 4
Jan 10 Unit 4
Jan 10 Unit 4
Centre
No.
Initial(s)
Paper Reference
6 3 5 6
Candidate
No.
0 1
Signature
Paper Reference(s)
6356/01
Edexcel GCE
Economics
Advanced
Unit 6 The UK in the Global Economy
(Synoptic Unit)
Tuesday 2 February 2010 Afternoon
Time: 1 hour 45 minutes
Question Leave
Number Blank
Section
A
Section
Instructions to Candidates
In the boxes above, write your centre number, candidate number, your surname, initial(s) and
signature.
Check that you have the correct question paper.
Write your answers in the spaces provided in this question paper.
Answer ONE Question from Section A and ONE Question from Section B.
Indicate which question you are answering by marking the box ( ). If you change your mind, put a
line through the box ( ) and then indicate your new question with a cross ( ).
This question paper is designed to give you the opportunity to use the skills and ideas developed
throughout the course in a new context. You may include in your answers relevant information from
the whole of your course, where appropriate.
There are 32 pages in this question paper. Any blank pages are indicated.
The marks for the various parts of questions are shown in round brackets: e.g. (2).
Questions in Section A will be marked out of 100; those in Section B will be marked out of 50. The
mark out of 100 for Section A will be divided by two and added to the mark out of 50 on the chosen
question from Section B.
Advice to Candidates
You are advised to divide your time equally between Section A and Section B.
You will be assessed on your ability to organise and present information, ideas, descriptions and
arguments clearly and logically, including your use of grammar, punctuation and spelling.
This publication may be reproduced only in accordance with
Edexcel Limited copyright policy.
2010 Edexcel Limited.
Printers Log. No.
M36185A
W850/6356/57570 1/1/1/1/1/1/
M36185A_GCE_A_Economics_Unit_6_F1 1
*M36185A0132*
Total
Turn over
29/09/2009 12:12:06
Leave
blank
SECTION A
Answer ONE question from this section.
You should spend approximately 45 minutes on this section.
You may include a diagram in your answer where this is helpful.
1. (a) Assess the impact on the world economy of the growth of regional trade blocs.
(40)
(b) Examine the likely impact of global recession on interdependence between countries
in the world economy.
(60)
Q1
(b) Assess the economic effects of a significant increase in taxation in the UK economy.
(60)
Q2
(b) The UK has been the largest recipient of inward foreign investment within the EU in
recent years. Evaluate the benefits of such foreign investment for the UK economy.
(60)
Q3
M36185A_GCE_A_Economics_Unit_6_F2 2
*M36185A032*
29/09/2009 12:12:06
Leave
blank
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
*M36185A032*
M36185A_GCE_A_Economics_Unit_6_F3 3
Turn over
29/09/2009 12:12:06
___________________________________________________________________________
Leave
blank
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
M36185A_GCE_A_Economics_Unit_6_F4 4
*M36185A032*
29/09/2009 12:12:06
___________________________________________________________________________
Leave
blank
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
*M36185A032*
M36185A_GCE_A_Economics_Unit_6_F5 5
Turn over
29/09/2009 12:12:07
___________________________________________________________________________
Leave
blank
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
M36185A_GCE_A_Economics_Unit_6_F6 6
*M36185A032*
29/09/2009 12:12:07
___________________________________________________________________________
Leave
blank
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
*M36185A032*
M36185A_GCE_A_Economics_Unit_6_F7 7
Turn over
29/09/2009 12:12:07
___________________________________________________________________________
Leave
blank
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
M36185A_GCE_A_Economics_Unit_6_F8 8
*M36185A032*
29/09/2009 12:12:07
___________________________________________________________________________
Leave
blank
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
*M36185A032*
M36185A_GCE_A_Economics_Unit_6_F9 9
Turn over
29/09/2009 12:12:07
Leave
blank
Tariffs on Textiles
The end of Textiles Quotas
The World Trade Organisation (WTO) ended its Multi-Fibre Agreement (MFA) on
31 December 2004. The MFA was established in the 1970s to give some protection to the
textile industries of industrialised countries facing competition from countries with lower
manufacturing costs such as Bangladesh and China. As part of the MFA, quotas were
introduced to prevent a surge of imports which threatened to cause serious damage to a
countrys own producers. Since 1995, the WTO has been gradually phasing out quotas.
The removal of quotas will not only harm industrial companies but also poor and middle
income countries such as Sri Lanka, Bangladesh, Indonesia and Morocco. The worry
is that, having no competitive advantage beyond abundant cheap labour, they will
lose market share to countries such as China and India which have vertically integrated 10
supply chains.
Some argue that quotas should be retained against other countries. For example, it is
argued that China is keeping its currency at an artificially low level and giving state
subisidies. However, supporters of the MFA claim it will mean increased efficiency and
lower costs for Western consumers. Supporters also argue that the move will see more jobs 15
created in India and China.
Producers in rich countries are also alarmed at the ending of the MFA. In the USA,
textile manufacturers are pressing for protectionism, saying that China will destroy the
American textile industry. Trade unions also argued that 350,000 jobs have been lost in
Americas textile sector between 2001 and 2004 and that, if nothing is done, many of the 20
remaining 695,000 will likewise be on a fast boat to China with the abolition of quotas.
In the EU the industry employed 2.7 million people in 2003 and had a turnover of 225
billion. But the EUs imports of Chinese textiles and clothing almost doubled between
2001 and 2003 and employment in these industries is falling rapidly. However, in the UK,
members of the 195,000 textiles workforce are finding jobs in companies at the top end of 25
the spectrum where there are larger profit margins.
Source: adapted from www.bbc.co.uk and from The Economist, 13 November 2004
10
M36185A_GCE_A_Economics_Unit_6_F10 10
*M36185A01032*
29/09/2009 12:12:07
Extract 2
Leave
blank
Tariffs on textiles
Even after quotas are phased out, exports of these goods from developing to industrialised
nations will face tariff levels that are considerably higher than for other manufactured
goods, as well as sharp tariff peaks for certain goods. The average tax imposed by rich
countries on textiles is 12 per cent, compared with 3.8 per cent for all manufactured goods;
peaks reach up to a remarkable 30 or 40 per cent on particular goods. Mens synthetic
shirts face a huge 32 per cent tariff, for example, at US customs.
The disproportionate tariffs on these goods are evidenced by the fact that, while accounting
for only 6.7 per cent of the value of US imports, shoes and clothes account for $8.7 billion
tariff revenue almost half of all tariff revenue collected. This can be likened to a system
10
of regressive taxation.
Source: adapted from Stitched Up, Oxfam Briefing Paper, April 2004
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
(4)
*M36185A01132*
M36185A_GCE_A_Economics_Unit_6_F11 11
11
Turn over
29/09/2009 12:12:07
(b) Why might the removal of textile quotas harm poor and middle-income countries?
(Extract 1, lines 78)
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
(6)
Leave
blank
(c) With reference to Extract 1, to what extent might the continued use of protectionist
measures against imported textiles from China be justified?
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
12
M36185A_GCE_A_Economics_Unit_6_F12 12
*M36185A01232*
29/09/2009 12:12:07
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
(10)
*M36185A01332*
M36185A_GCE_A_Economics_Unit_6_F13 13
Leave
blank
13
Turn over
29/09/2009 12:12:07
(d) With the aid of a diagram, assess the effects of tariffs on imports of textiles into the
EU.
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
14
M36185A_GCE_A_Economics_Unit_6_F14 14
Leave
blank
*M36185A01432*
29/09/2009 12:12:07
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
(12)
*M36185A01532*
M36185A_GCE_A_Economics_Unit_6_F15 15
Leave
blank
15
Turn over
29/09/2009 12:12:07
(e) With reference to Extract 2, discuss the impact of tariffs on textiles on the distribution
of income in the US.
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
(6)
16
M36185A_GCE_A_Economics_Unit_6_F16 16
Leave
blank
*M36185A01632*
29/09/2009 12:12:08
(f) To what extent can supply-side policies influence the international competitiveness of
a countrys textile industry?
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
*M36185A01732*
M36185A_GCE_A_Economics_Unit_6_F17 17
Leave
blank
17
Turn over
29/09/2009 12:12:08
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
(12)
Leave
blank
Q4
(Total 50 marks)
18
M36185A_GCE_A_Economics_Unit_6_F18 18
*M36185A01832*
29/09/2009 12:12:08
BLANK PAGE
*M36185A01932*
M36185A_GCE_A_Economics_Unit_6_F19 19
19
Turn over
29/09/2009 12:12:08
Leave
blank
Imports of Exports of
Goods
Goods
1999
195 217
166 166
Trade in
Goods
balance
-29 051
Trade in
Services
balance
15 562
2000
220 912
187 936
-32 976
15 002
2001
230 305
189 093
-41 212
17 200
2002
234 229
186 534
-47 695
19 632
2003
236 927
188 320
-48 607
22 612
2004
251 770
190 877
-60 893
28 146
2005
280 297
211 608
-68 689
25 875
2006
319 947
243 635
-76 312
33 108
2007
309 955
220 703
-89 252
41 772
Source: www.statistics.gov.uk/downloads/theme_economy/PinkBook_2008
GDP
1999
928,730
2000
976,533
2001
1,201,828
2002
1,075,564
2003
1,139,746
2004
1,200,595
2005
1,252,505
2006
1,321,860
2007
1,401,042
Source: www.statistics.gov.uk/statbase/product
20
M36185A_GCE_A_Economics_Unit_6_F20 20
*M36185A02032*
29/09/2009 12:12:08
Leave
blank
INDEX
110
105
100
95
90
85
80
1996 1998 2000 2002 2004 2006 2008
Source: The Independent, 17 November 2008
97
99
01
03
05
07 08
Source: The Times, 2 March 2009
*M36185A02132*
M36185A_GCE_A_Economics_Unit_6_F21 21
21
Turn over
29/09/2009 12:12:08
(a) (i) With reference to Figures 1 and 2, calculate the value of imports of goods as a
percentage of GDP in 1999 and 2007.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(3)
Leave
blank
(ii) With reference to the data and other information, discuss the likely economic
effects of increased import penetration on the UK economy
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
22
M36185A_GCE_A_Economics_Unit_6_F22 22
*M36185A02232*
29/09/2009 12:12:08
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(10)
*M36185A02332*
M36185A_GCE_A_Economics_Unit_6_F23 23
Leave
blank
23
Turn over
29/09/2009 12:12:08
(iii) Examine two possible causes of the decline in exports of goods between 2006
and 2007.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(6)
Leave
blank
24
M36185A_GCE_A_Economics_Unit_6_F24 24
*M36185A02432*
29/09/2009 12:12:08
(b) (i) What relationship might be expected between a countrys interest rate and its
currencys exchange rate? Explain your answer.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(4)
Leave
blank
(ii) To what extent do the data in Figures 3 and 4 support this relationship?
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(3)
*M36185A02532*
M36185A_GCE_A_Economics_Unit_6_F25 25
25
Turn over
29/09/2009 12:12:08
(iii) Assess two reasons for the fall in the sterling trade weighted exchange rate as
shown in Figure 3 since 2007.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
26
M36185A_GCE_A_Economics_Unit_6_F26 26
Leave
blank
*M36185A02632*
29/09/2009 12:12:08
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(12)
*M36185A02732*
M36185A_GCE_A_Economics_Unit_6_F27 27
Leave
blank
27
Turn over
29/09/2009 12:12:09
(c) Evaluate the significance of a decrease in the external value of sterling for the
simultaneous achievement of the governments macroeconomic objectives of low
inflation, economic growth and full employment.
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
28
M36185A_GCE_A_Economics_Unit_6_F28 28
Leave
blank
*M36185A02832*
29/09/2009 12:12:09
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
_ ___________________________________________________________________
(12)
Leave
blank
Q5
(Total 50 marks)
TOTAL FOR SECTION B: 50 MARKS
TOTAL FOR PAPER: 100 MARKS
END
*M36185A02932*
M36185A_GCE_A_Economics_Unit_6_F29 29
29
29/09/2009 12:12:09
BLANK PAGE
30
M36185A_GCE_A_Economics_Unit_6_F30 30
*M36185A03032*
29/09/2009 12:12:09
BLANK PAGE
*M36185A03132*
M36185A_GCE_A_Economics_Unit_6_F31 31
31
29/09/2009 12:12:09
BLANK PAGE
32
M36185A_GCE_A_Economics_Unit_6_F32 32
*M36185A03232*
29/09/2009 12:12:09