For Examiners Use - Materials For this paper you must have: • the...

*jun257135201 * IB/M/Jun25/G4003/V4 7135/2

For Examiner’s Use Section Mark A B TOTAL

Monday 19 May 2025 Morning Time allowed: 1 hour 30 minutes

Materials

For this paper you must have:

• the Insert • a calculator.

Instructions • Use black ink or black ball-point pen. Pencil should only be used for drawing.• Fill in the boxes at the top of this page.• Answer all questions in Section A.• Answer either Context 1 or Context 2 in Section B .• You will need to refer to the Insert provided to answer Section B.• You must answer the questions in the spaces provided. Do not write outside the box around each page or on blank pages.• If you need extra space for your answer(s), use the lined pages at the end of this book. Write the question number against your answer(s).• Do all rough work in this book. Cross through any work you do not want to be marked.

Information • The maximum mark for this paper is 70.• The marks for questions are shown in brackets.• No deductions will be made for wrong answers.Please write clearly in block capitals.Centre number

Candidate number

Surname

Forename(s)

Candidate signature

I declare this is my own work.

AS

ECONOMICS

Paper 2 The National Economy in a Global Context 1 / 4

2

*02*

IB/M/Jun25/7135/2

Do not write outside the box Section A

Answer all questions in this section.

Only one answer per question is allowed.

For each question completely fill in the circle alongside the appropriate answer.

CORRECT METHOD

WRONG METHODS

If you want to change your answer you must cross out your original answer as shown.

If you wish to return to an answer previously crossed out, ring the answer you now wish to select as shown.

• 1

Which one of the following is most likely to be an objective of government macroeconomic policy?[1 mark]

A Achieving deflation in the average price level

B Creating a budget surplus during a recession

C Generating stable and sustained economic growth

D Improving productivity in an electronics firm

• 2

In an economy, the number of people in work is unchanged but the rate of growth of labour productivity slows from 2.3% to 0.4%.

It can be concluded that there will be an increase in [1 mark]

A cyclical unemployment.

B national income.

C raw material prices.

D the negative output gap.

• / 4

3

*03* Turn over ►

IB/M/Jun25/7135/2

Do not write outside the box

• 3

In a particular year, the rate of inflation in an economy was 2% and real national income rose by 6%. What was the approximate increase in the economy’s nominal national income in that year?[1 mark]

A 2%

B 4%

C 6%

D 8%

• 4

Figure 1 shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves for an economy.

Figure 1

All other things being equal, which one of the following is most likely to cause aggregate demand to shift from AD1 to AD2 and long- run aggregate supply to shift from LRAS 1 to

LRAS2?

[1 mark]

A A fall in spending on imports and a rise in productivity

B A reduction in exports and an increase in imports of capital goods

C An increase in Bank Rate and a reduction in firms’ costs of production

D An increase in saving and a rise in government spending on infrastructure

• / 4

4

*04* IB/M/Jun25/7135/2

Do not write outside the box

• 5

Which one of the following statements concerning short-run economic growth and long-run economic growth is correct?[1 mark]

A Short-run growth is inflationary whereas long-run growth will cause a fall in the average price level

B Short-run growth may occur independently of the government whereas long-run growth is only achieved as a result of government policy

C Short-run growth may occur when governments use demand-side policies but these do not affect long-run growth

D Short-run growth may reduce spare capacity whereas long-run growth increases productive capacity

• 6

When an economy goes into a recession, there is most likely to be an increase in [1 mark]

A business uncertainty.

B imports.

C inflation.

D tax revenue.

• / 4