Economics > QUESTION PAPER & MARK SCHEME > Economics B Advanced PAPER 3: The economic environment and business.., Pearson Edexcel Level 3 GCE. (All)

Economics B Advanced PAPER 3: The economic environment and business.., Pearson Edexcel Level 3 GCE. LATEST MASTERPIECE.

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Answer ALL questions. SECTION A Read the following extracts (A and B) before answering Question 1. Write your answers in the spaces provided. Extract A UK’s productivity crisis The UK has expe... rienced a decline in productivity growth since the financial crisis of 2008. The slowdown has been more acute than in any other western country. –10 0 10 20 30 40 Japan Canada Italy G7 G7 excl. UK US France Germany GDP per hour worked, 2016 (% above/below UK level) Labour productivity is normally measured as the value of goods and services produced for each hour worked. The average UK worker produced 16% less on average than counterparts in other members of the Group of Seven (G7) leading economies in 2016, according to data from the Office for National Statistics. The average French worker produces more by the end of Thursday than their UK counterpart can in a full week. In 1960 the UK had the best productivity in Europe, better than France, West Germany and Italy. UK productivity grew continuously during the next 50 years, but often at a slower pace than comparable countries. Between 1980 and 2008, the UK did become a more efficient economy, notably after reforms introduced by Prime Minister Margaret Thatcher and other changes resulting from UK membership of the EU. In 2016 the Organisation for Economic Co-operation and Development (OECD) found that UK had one of the largest proportions of low-skilled young workers among advanced economies. It also found that young UK workers were no more skilled than older employees, suggesting a high likelihood that weak productivity will be difficult to remedy in the coming years. 5 10 15*P66201A0324* Turn over 3 0 10 20 30 40 50 60 Italy US UK Spain Ireland N. Ireland France Canada Germany OECD Avg Sweden Netherlands Japan S. Korea UK has a high proportion of low-skilled young workers Aged 16–24 Aged 55–65 The proportion of older workers with low skills is relatively low % of adults with low literacy and/or numeracy skills source adapted from: https://www.ft.com/content/6ada0002-9a57-11e8-9702- 5946bae86e6d Extract B UK economic forecast 2019 • Economic growth to remain weak and is expected to grow by just 1% in both 2019 and 2020 • Growth in consumption is expected to slow in line with slower growth in employment • The economy should benefit from a modest recovery in global growth in 2020 • The 2% target for inflation is expected to be achieved by the end of 2020 • The current account deficit has been worsening, nearing 4½% of GDP, reflecting worsening trade, particularly in the car sector • The current account deficit should improve but remain large • With high economic uncertainty and fragile consumer confidence, housing activity and prices are likely to remain subdued in the short term • The unemployment rate is anticipated to remain broadly stable • The public debt-to-GDP ratio is projected to decline marginally from its pe [Show More]

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