AQA A-level ECONOMICS 7136/2 PAPER 2 National and International Economy Question Paper + Mark scheme (Merged) GRADE A+

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AQA A-level ECONOMICS 7136/2 PAPER 2 National and International Economy Question Paper + Mark scheme (Merged) June 2021 Version: 1.0 Final IB/M/Jun21/E8 7136/2 Time allowed: 2 hours Materials... For this paper you must have: • an AQA 12-page Answer Book • a calculator. Instructions • Use black ink or black ball-point pen. Pencil should only be used for drawing. • Write the information required on the front cover of your Answer Book. The Paper Reference is 7136/2. • In Section A, answer EITHER Context 1 OR Context 2. • In Section B, answer ONE essay. Information • The marks for questions are shown in brackets. • The maximum mark for this paper is 80. • There are 40 marks for Section A and 40 marks for Section B. Advice • You are advised to spend 1 hour on Section A and 1 hour on Section B. A-level ECONOMICS Paper 2 National and International Economy 2 IB/M/Jun21/7136/2 Section A Answer EITHER Context 1 OR Context 2. EITHER Context 1 Total for this context: 40 marks National debt and government spending Study Extracts A, B and C and then answer all parts of Context 1 which follow. Extract A Figure 1: Annual average yields on long-term bonds, Greece and the UK, selected years, 2007 to 2019 Figure 2: Selected statistics for Greece and the UK, 2012 Greece UK GDP ($bn) 245.7 2662.1 GDP per capita ($) 22 242 41 791 National debt ($bn) 391 2243 Population (millions) 11.1 63.7 Source: Official statistics, 2020 Source: ONS, Eurostat, World Bank 2020 Extract B: Government debt: a Greek tragedy In 2018, after years of tough government spending cuts (austerity), the Greek government emerged from its third and final international financial rescue package, although economists warned that the country still had a “long way to go”. The European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) have loaned Greece a total of €289bn (£240bn) since 2010. The EU and IMF insisted that, in return for help, economic reforms were necessary to reduce Greece’s structural budget deficit. For many Greeks, especially the young, the years of economic hardship were severe. Higher taxes and reduced salaries and pensions led to riots on the streets. The government spending cuts also severely damaged private-sector jobs. In 2012–13, the unemployment rate peaked at 27.5%, but for those under 25 it was 58%. Eight years after austerity began, GDP was 25% below its 2010 level. How did Greece find itself in this position in the first place? In 2007–08, the global financial crisis caused a worldwide recession. Many countries had huge government debts, but Greece was the worst affected with an unsustainable budget deficit following years of high government spending. In 2010, the country revealed the size of its huge budget deficit which led bond yields to soar and to a sovereign debt crisis. International lenders labelled Greek debt as ‘junk’ and the Greek Government was unable to borrow on financial markets. Greece was forced to ask for financial help. But what now? In 2019, the Greek economy grew by 1.9%. It had a budget surplus (excluding interest payments on its debt) and the unemployment rate had fallen below 20%. However, the pandemic has harmed the Greek economy and the Greek government’s budget is again in deficit. 1 5 10 15 20 Source: News reports, 2020 [Show More]

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