AS & A Level Economics (9708) — May–June 2025, Paper 21

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Question 1 · 20 marks · The macroeconomy - inflation and interest rates

Using the data in Table 1.1, compare changes in the inflation rate and changes in the interest rate in the US.

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Question 2 · 20 marks · Basic economic ideas - production possibility curves

With the help of a diagram, explain the reasons for a movement within a production possibility curve (PPC) and a shift of a PPC and consider the extent to which opportunity cost…

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Question 3 · 20 marks · The price system and the microeconomy - subsidies and market intervention

With the help of a diagram, explain how changes in a subsidy can influence the price and quantity sold of a product in a market and consider how expenditure on a subsidy is…

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Question 4 · 20 marks · The macroeconomy - circular flow of income

Explain how the circular flow of income in an economy changes when that economy moves from a closed to an open economy and consider what determines the extent of the change.

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Question 5 · 20 marks · Government macroeconomic intervention - fiscal policy and the government budget

Explain the difference between a budget surplus and a budget deficit and consider the extent to which a budget surplus is better than a budget deficit.

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