Notesale: Turn your study into money

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ECONOMICS

OCR 2024
GCSE Economics
J205/02 National and International Economics
With Marking Scheme Merged

Oxford Cambridge and RSA

Tuesday 21 May 2024 – Morning
GCSE (9–1) Economics
J205/02 National and International Economics
Time allowed: 1 hour 30 minutes
You can use:
• a scientific or graphical calculator
• an HB pencil

*

J

2

0

5

0

2

*

Please write clearly in black ink
...

Centre number

Candidate number

First name(s)
Last name
INSTRUCTIONS
• Use black ink
...

• Write your answer to each question in the space provided
...
The question numbers must be clearly shown
...

INFORMATION
• The total mark for this paper is 80
...

• Quality of extended response will be assessed in questions marked with an asterisk (*)
...

ADVICE
• Read each question carefully before you start your answer
...


1

Which statement about GDP per capita is not correct?
A It calculates the output per head of a country’s population
B It can be used to measure the standard of living between countries C
It represents the average income of each person in a country
D It shows a country is in recession if GDP per capita decreases
Your answer

2

[1]

The UK uses CPI to measure inflation
...

2021 (%)

2022 (%)

Country S

4
...
1

Country T

–2
...
5

Country V

12
...
1

Country W

8
...
3

Country Z

8
...
1

In which two countries did the general price level decrease between 2021 and 2022?
A

Countries S and V

B

Countries T and W

C

Countries T and Z

D

Countries W and Z

Your answer

6

[1]

A current account surplus will most likely lead to
A a decrease in the country’s debt
B a decrease in the exchange rate C
a decrease in the rate of inflation D
an increase in unemployment
Your answer

© OCR 2024

[1]

Turn over

4
7

A country is experiencing structural problems which means overpriced and poor-quality
goods being produced
...

£bn
750

700

Imports

650

Exports

600

550

2017

2018

2019

2020

2021

What does this diagram show?
A

Exports decreased by more than imports between 2019 and 2020

B

Exports increased by less than imports between 2020 and 2021

C

The demand for UK exports was greater in 2021 than in 2018

D

The UK’s imports were always greater than its exports

Your answer

© OCR 2024

[1]

5
9

Education results in positive externalities being generated
...
What is an opportunity cost of this decision?
A The cost of paying teachers
B The excess demand for health services
C The money spent on producing examinations D
The need to ensure all children attend school
Your answer

[1]

10 Why can the life expectancy of the population be used to help measure the development of a
country?
A A larger number of people need to be educated so more teachers are required B
An improved life expectancy will encourage parents to have fewer children
C If people live longer there will be greater demand for health services
D It can help to indicate safety levels in a country are higher due to less conflict
Your answer

[1]

11 Which of these is likely to cause a decrease in economic growth?
A A decrease in unemployment
B An increase in infrastructure investment C
Fewer workers coming from the EU
D More government spending on training
Your answer

© OCR 2024

[1]

Turn over

6
12 Which of these is not included in the UK’s balance of payments on current
account? A A Spanish firm buying land in the UK to build a factory
B A UK consumer spending money while on holiday in Greece
C Foreign aid money sent from the UK to a less developed country D
Interest earned by a UK individual from a bank account in France
Your answer

[1]

13 A UK producer is currently buying raw materials from the USA for $28 000
...
40 to £1 =
$1
...
What is the price that the UK producer will now have to pay for the raw materials?
A £2400 B
£20 000 C
£22 400 D
£35 000
Your answer

[1]

14 In the past 20 years there has been more free movement of goods and greater
international interdependence
...

This policy works through the
A demand curve shifting to the right as prices increase
B quantity sold decreasing as the demand curve shifts to the left C
supply curve shifting to the left leading to higher prices
D supply curve shifting to the right as supply decreases
Your answer

[1]

16 A government intends to use information provision to encourage the consumption of a
good which has a positive externality
...

€/£
1
...
35
1
...
25
1
...
15
1
...
05
1
...

The rebuilt road will help the residents of the largest Amazon city, Manaus, to stay connected
to the rest of Brazil throughout the year
...
0

Unemployment rate in the UK: 2000–2021

8
...
0
6
...
0
4
...
0
2
...
0
0
...

Due to family demands, workers are often unable to move to another area to find work, leading to
regional differences in unemployment
...
Depressed regions with high unemployment suffer from a lack of demand that
leads to shops closing and more unemployment and economically inactive people
...

As long as these unemployed people do not lose their skills, employers may be able to offer lower
wages because of the surplus labour
...

Workforce data: 2022

England

Economically
active

Employed
level

Unemployed
level

Unemployment
rate

Economically
inactive

(thousands)

(thousands)

(thousands)

(rate %)

(rate %)

28,781

27,736

1,045

3
...
2

North East

1,257

1,204

53

4
...
2

South East

4,751

4,608

143

3
...
4

Wales

1,502

1,448

55

3
...
9

Scotland

2,804

2,705

98

3
...
9

877

851

26

–

27
...


...


...
[2]

(b) Using Extract 1, calculate the unemployment rate in Northern Ireland
...


Answer
...


...


...


...


...


...


...


...


...


...
[6]

© OCR 2024

13
(d)
(i) Explain what is meant by structural unemployment
...


...


...

1
...

[2]

© OCR 2024

Turn over

14
(iii)* Evaluate the consequences of unemployment for producers in the North East of England
...


...


...


...


...


...


...


...


...


...
[6]

© OCR 2024

15
BLANK PAGE

DO NOT WRITE ON THIS PAGE
Turn over for next question

© OCR 2024

Turn over

16
22
Extract 2
Income Distribution and Taxes in Indonesia
Distribution of net income in Indonesia
2002
2021
Key:
Top fifth
Fourth fifth

7%

9%
11%

14%

40%

15%

45%

Third fifth
Second fifth
Bottom fifth

16%
21%

22%

Governments often use direct taxes not only to increase revenue, but also to redistribute income
and wealth
...
The distribution of wealth is more unequal than income
...
Wide differences in income and wealth
are often associated with issues such as inequality of opportunities
...
Taxation is also
used in both fiscal and supply side policies
...


(a) Using Extract 2, calculate the percentage of total net income in 2021 that is received by the
richest 40% of the Indonesian population
...


Answer
...



...


...
[2]
© OCR 2024

17
(c) Using the information in Extract 2, analyse how a decrease in direct taxes can affect the
Indonesian economy
...


...


...


...


...


...


...


...


...


...

1
...

[2]
(ii) Explain how a progressive income tax system redistributes income
...


...


...

Use the information given in Extract 2 and your own knowledge
...


...


...


...


...


...


...


...


...


...
0

76
...
6

Health (NHS)

59
...
3

216
...
2

86
...
3


...


155
...
6

425
...
0

675
...
3

Total government spending

Government spending on education and health provision allows workers to become more
productive, potentially increasing economic output
...
When government borrowing increases, interest rates may rise
...

When interest rates in the UK are higher than overseas, the international value of the pound
increases, which may adversely affect UK exports, but should lower the inflation rate
...


Answer
...


...


...
[2]

© OCR 2024

21
(c) Using the information in Extract 3, analyse how a cut in interest rates can affect UK economic
growth
...


...


...


...


...


...


...


...


...


...

1
...

[2]
(ii)

Explain how higher interest rates in the UK may lead to the international value of the pound increasing
...


...


...

Use the information given in Extract 3 and your own knowledge
...


...


...


...


...


...


...


...


...


...
You must write the question numbers
clearly in the margin
...


...


...


...


...


...


...


...


...


...


...


...


...


...


...


...


...


...


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...
OCR qualifications include
AS/A Levels, Diplomas, GCSEs, Cambridge Nationals, Cambridge Technicals, Functional Skills,
Key Skills, Entry Level qualifications, NVQs and vocational qualifications in areas such as IT,
business, languages, teaching/training, administration and secretarial skills
...
OCR is a not-for-profit organisation; any surplus made
is invested back into the establishment to help towards the development of qualifications and
support, which keep pace with the changing needs of today’s society
...
It shows the basis on which marks were awarded by examiners
...

All examiners are instructed that alternative correct answers and unexpected approaches
in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and
skills demonstrated
...

© OCR 2024

Oxford Cambridge and RSA Examinations

J205/02

Mark Scheme
MARKING INSTRUCTIONS

June 2024

PREPARATION FOR MARKING
RM ASSESSOR
1
...


2
...
These are posted on the RM Cambridge
Assessment Support Portal http://www
...
com/support/ca

3
...

YOU MUST MARK 10 PRACTICE AND 10 STANDARDISATION RESPONSES BEFORE YOU CAN BE APPROVED TO MARK LIVE SCRIPTS
...


Mark strictly to the mark scheme
...


Marks awarded must relate directly to the marking criteria
...


The schedule of dates is very important
...
If you experience problems, you must contact your Team Leader (Supervisor) without delay
...


If you are in any doubt about applying the mark scheme, consult your Team Leader by telephone or the RM Assessor messaging system, or by email
...


Crossed Out Responses
Where a candidate has crossed out a response and provided a clear alternative then the crossed out response is not marked
...

Multiple Choice Question Responses
When a multiple choice question has only a single, correct response and a candidate provides two responses (even if one of these responses is correct),
then no mark should be awarded (as it is not possible to determine which was the first response selected by the candidate)
...


2

J205/02

Mark Scheme

June 2024

Contradictory Responses
When a candidate provides contradictory responses, then no mark should be awarded, even if one of the answers is correct
...
The
response space should be marked from left to right on each line and then line by line until the required number of r esponses have been considered
...
Examiners will have to apply judgement as to whether a ‘second response’ on a line is a
development of the ‘first response’, rather than a separate, discrete response
...
)
Short Answer Questions (requiring a more developed response, worth two or more marks)
If the candidates are required to provide a description of, say, three items or factors and four items or factors are provided, then mark on a similar basis
– that is downwards (as it is unlikely in this situation that a candidate will provide more than one response in each section o f the response space
...
Examiners will need to apply professional judgement as to whether
the second (or a subsequent) response is a ‘new start’ or simply a poorly expressed continuation of the first response
...


Always check the pages (and additional objects if present) at the end of the response in case any answers have been continued there
...


7
...

Team Leaders must confirm the correct use of the NR button with their markers before live marking commences and should check this when
reviewing scripts
...


9
...
Please refer to these comments
when checking your practice responses
...

If you have any questions or comments for your team leader, use the phone, the RM Assessor messaging system, or e-mail
...
The report should contain notes on particular strengths displayed as well as common errors or weaknes ses
...


10
...
To determine the level – start at the highest level and work down until you reach the level that matches the answer
b
...
Annotations
These are the annotations, (including abbreviations), including those used in RM Assessor
...
All non-levels Qs, the number of ticks must match the mark awarded
...
g
...
For answers given L4, also annotate where L3 is within that answer
...
The number of ticks must never exceed the number of marks awarded
...

5

June 2024

J205/02

Mark Scheme

June 2024

12
...
All
of the terms/theoretical concepts
are explicitly or implicitly
understood
...

Most of the terms/theoretical
concepts are explicitly or implicitly
understood
...

Some of the terms/theoretical
concepts are explicitly or implicitly
understood
...
There is correct analysis
in the form of developed
links
...
Any relevant
diagram(s) are predominantly
correct and linked to the
analysis
...
There is
correct analysis largely in the
form of single effects
...
The
relevant diagram(s), if
present, may be improperly
labelled or not linked to the
analysis
...
There is an attempt
at analysis which may include
a single effect that has some
link to the question
...


Good evaluation with a fully
supported judgement that is
developed from a weighing
up arguments/both
sides/comparing alternatives
...
The
terms/theoretical concepts
are used/adapted/changed in
the context of the given
scenario
...

Reasonable application of
knowledge to a given
scenario
...
There is
understanding of some the
relevant elements of the
scenario
...
There is an attempt
to use/adapt/change the
terms/theoretical concepts in
the context
...

There may be a judgement,
but this will not be fully
supported
...


J205/02

Mark Scheme
SECTION A
Question
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Key
D
A
B
D
C
A
B
B
B
D
C
A
C
A
C
B
D
D
D
A

AO
AO1a
AO1a
AO2
AO1b
AO2
AO1b
AO1b
AO2
AO2
AO1b
AO1b
AO1a
AO2
AO1b
AO1b
AO1b
AO1b
AO2
AO1b
AO2

7

June 2024

Quantitative skills

Yes

Yes

Yes

Yes

J205/02

Mark Scheme

Question
21
(a)

Answer
Using Extract 1, explain the trend in the UK
unemployment rate between 2008 and 2011
...


•
•
•
•
•
21

(b)

Decline in economic growth / a recession
A lack of (total) demand, which lead to fewer job
opportunities / vacancies
When unemployment rose, incomes fell, which lead to
total demand contracting further and so
unemployment continued to rise
The global financial crisis led to business and
consumer confidence falling, so workers were being
laid off
A lack of investment (in manufacturing industries and
services)/decline in manufacturing

Using Extract 1, calculate the unemployment rate in
Northern Ireland
...


Answer:

AO2

2 marks for the correct answer (working not required)
1 mark for correct working, but incorrect answer
1 mark only if the % sign is omitted

26
877

2

× 100 = 2
...
%

OR
2
...

Knowledge and understanding that:
• The budget is calculated by the difference between
government spending and tax revenue
...

>>so government revenue rises

9

Mark
6
1
AO1a
2
AO2
3
AO3a

June 2024
Guidance
All level descriptors describe the TOP of the level –
please read guidance at the beginning of the mark
scheme regarding best fit approach
...
All of the
terms/theoretical concepts are explicitly or implicitly
understood
...
The terms/theoretical concepts are
used/adapted/changed in the context of the given
scenario
...

Good analysis of the budget
...
These links are
developed through a chain of reasoning which
addresses the question
...

Level 2 (3-4 marks)
(AO1a – 1 mark, AO2 – 1 mark, AO3a – 2 marks = 4
marks)
Reasonable knowledge and understanding
...

Limited application of knowledge about the budget
...


J205/02
Question

Mark Scheme
Answer
Overall budget impact: rising tax revenue and falling
government spending led to a smaller budget deficit / larger
budget surplus
...
There is correct
analysis largely in the form of single effects
...
The relevant diagram(s), if present,
may be imperfectly labelled or not linked to the analysis
...
B
1
...
If there is no analysis (AO3a), then application (AO2)
cannot be rewarded
...
Some of
the terms/theoretical concepts are explicitly or implicitly
understood
...
There is
an attempt to use/adapt/change the terms/theoretical
concepts in the context
...
There is an attempt at
analysis which may include a single effect that has
some link to the question
...

0 marks
No work worthy of credit
...
B
...


10

J205/02

Mark Scheme

Question
21
(d)
(i)

June 2024

Answer
Explain what is meant by structural unemployment
...


1 additional mark for one of the bullet points
...

2
...

4
...

6
...


OR

AO1a

Frictional unemployment
Cyclical unemployment
Seasonal unemployment
Technological unemployment
Voluntary unemployment
Regional
Classical/real-wage

1 mark for each correct answer up to a total of 2 marks
...


11

J205/02
21

Question
(d) (iii)*

Mark Scheme
Answer
Evaluate the consequences of unemployment for
producers in the North East of England
...

Reference to Extract 1 or context (just [1] AO2):
Examples include:
• Unemployment rate is higher in the North East than
the national average (4
...
6%)
• Economically inactive rate is higher than the average
(25
...
2%)
• Investment has been lacking
• Unemployment appears to be structural and long term
• Manufacturing industries have been declining
• Workers cannot move easily between regions when
•

seeking jobs
To the North East

Guidance
All level descriptors describe the TOP of the level –
please read guidance at the beginning of the mark
scheme regarding best fit approach
...

The terms/theoretical concepts are
used/adapted/changed in the context of the given
scenario
...

Reasonable analysis of unemployment
...
These
address the question but are not developed into a clear
chain of reasoning
...

Good evaluation of unemployment with a fully supported
judgement that is developed from weighing up

For producers:
•

1
AO2
2
AO3a
3
AO3b

June 2024

The presently unemployed will need additional training
since their skill set has been lost while unemployed
which increases costs

•

A depressed local economy means less demand for
goods and services which reduces revenue/profits

•

Economically inactive rate is higher than the average,
(which shows that many have become discouraged
workers outside the workforce) which decreases
productivity/output

arguments/both sides/comparing alternatives
...
The
information presented is entirely relevant and
substantiated
...
The information presented is in the most-part
relevant and supported by some evidence
...
The
terms/theoretical concepts are used/adapted/changed in

12

J205/02
Question

Mark Scheme
Answer

Mark

But (likely benefits)
Since there is a relatively high rate of unemployment in the
North East, the supply of labour is greater than its demand, so
employers may benefit from lower wage rates & lower
costs/higher profits
Government support (training and infrastructure) could
generate new opportunities in manufacturing and services and
therefore reduce costs/increase profits
May not be that affected if due to mechanisation/exporting
industry

June 2024
Guidance
the context of the given scenario
...

Limited analysis of unemployment
...
These
address the question but are not developed into a clear
chain of reasoning
...

Reasonable evaluation of unemployment, considering
arguments/both sides/comparing alternatives
...


Final judgement:
• As to whether the benefits are likely to outweigh the
costs (depending on their significance or duration
...

• Final judgement on whether the benefits are greater
than the costs expressed clearly
...
The information presented is in the most-part
relevant and supported by some evidence
...
If there is no analysis/evaluation, then application
(AO2) cannot be rewarded
...
There
is an attempt to use/adapt/change the terms/theoretical
concepts in the context
...
In order to reach Level 3, there must be Application
(AO2), Analysis (AO3a) and Evaluation (AO3b)

Level 1 (1-2 marks)
(AO2 – 0 marks, AO3a – 1 mark, AO3b – 1 mark = 2
marks)

Limited analysis of unemployment
...
Diagrams (if present) are
unlikely to be correct and not linked to the analysis
...


13

J205/02

Mark Scheme

Question

Answer

June 2024

Mark

Guidance
Information presented is basic and may be ambiguous or
unstructured
...

0 marks
No work worthy of credit
...
B
...


22

(a)

Using Extract 2, calculate the percentage of total net
income in 2021 that is received by the richest 40% of the
Indonesian population
...

Top fifth 45 + fourth fifth 22 = 67

2
2 marks for a correct answer (working not required)
AO2
1 mark for correct working, but incorrect answer
No mark lost if % sign or word omitted, since the question
asked for “percentage”
...


June 2024

Mark
2
AO2

22

(c)

Guidance

Answers may include:

1 mark for stating that the income distribution became
more unequal, without referring to the data
...


Candidates cannot copy directly from the text in the
extract
6

Knowledge and understanding:
• Direct taxes reduce disposable income
• (Whereas indirect taxes are placed on spending on
goods and services e
...
VAT)
• Tax revenue is used for public investment in
infrastructure as well as for transfer payments and
public services
Reference to the extract:
• Taxes are a tool of fiscal/supply-side policy
• Income and wealth are not distributed equally
• (Direct) taxes are used for benefits/public services
• Reference to Indonesia

1
AO1a
2
AO2
3
AO3a

All level descriptors describe the TOP of the level –
please read guidance at the beginning of the mark
scheme regarding best fit approach
...
All
of the terms/theoretical concepts are explicitly or
implicitly understood
...
The
terms/theoretical concepts are used/adapted/changed
in the context of the given scenario
...

Good analysis of taxes
...
These links are developed
through a chain of reasoning which addresses the
question
...

Level 2 (3-4 marks)

15

J205/02
Question

Mark Scheme
Answer
Development of reasoning linking lower taxes to overall
economy:
When the government decreases direct taxes
• Disposable (household) income rises, which leads to
higher consumption and higher total demand
• As net incomes increase/total spending increases
then prices & (demand-pull) inflation will too
• Corporate profits are higher, which may lead to more
(capital) investment and, therefore, productivity is
higher
• Net income distribution may become more unequal
• Disposable (household) income rises, which leads to
higher consumption and therefore higher
import/deterioration of current account
• It may encourage people to work (longer/more) and be
more productive/increase output

Mark

June 2024
Guidance
(AO1a – 1 mark, AO2 – 1 mark, AO3a – 2 marks = 4
marks)
Reasonable knowledge and understanding
...

Limited application of knowledge about taxes
...

Reasonable analysis of taxes
...
These address the
question but are not developed into a clear chain of
reasoning
...


>>so overall economic growth may be higher and
Inflation rate may rise

Level 1 (1-2 marks)
(AO1a – 1 mark, AO2 – 0 marks, AO3a – 1 mark = 2
marks)

Tax revenue is lower, so
• Budget deficit is larger, so more government
borrowing, which may lead to higher interest rates

Reasonable knowledge and understanding
...


Any other relevant points are to be credited
...
B
...
In order to reach Level 3 there must be reference to
information in the Extract or context
...
If there is no analysis (AO3a), then application (AO2)
cannot be rewarded
...
There is an
attempt to use/adapt/change the terms/theoretical
concepts in the context
...
There is an attempt at analysis
which may include a single effect that has some link to
the question
...


J205/02

Mark Scheme

Question

Answer

June 2024

Mark

Guidance
0 marks
No work worthy of credit
...
B
...


22

22

(d)

(d)

(i)

(ii)

Other than income tax, state two types of direct taxes
...
Inheritance tax
2
...
Capital gains tax
4
...
Council Tax
Explain how a progressive income tax system
redistributes income
...

Use the information given in Extract 2 and your own
knowledge
...

But there may be more tax avoidance and tax evasion/noncompliance, which might lower revenue and thus lower
provision of public services and/or higher earners/more skilled
workers may leave the country and/or government corruption
may prevent/limit this process

2) the richest may lose the incentive (face a disincentive)
to seek higher paid jobs in the top band, which might
mean lower productivity for the economy and lower
levels of entrepreneurship, which could lower
employment opportunities for the lower paid
...

Level 3 (5-6 marks)
(AO2 – 1, AO3a – 2 marks, AO3b – 3 marks = 6 marks)
Good application of knowledge about redistribution
...
There is good understanding of all the
relevant elements of the scenario
...
There is correct
analysis largely in the form of single effects
...
The relevant diagram(s), if present,
may be imperfectly labelled or not linked to the analysis
...

There is a well-developed and detailed line of reasoning
which is coherent and logically structured
...

Level 2 (3-4 marks)
(AO2 – 1, AO3a – 1 mark, AO3b – 2 marks = 4 marks)
Good application of knowledge to redistribution
...
There is good
understanding of all the relevant elements of the
scenario
...

But higher tax may prove a disincentive to entrepreneurs
setting up businesses/employees seeking promotion

4) Foreign companies may welcome this measure as it
should mean a more socially cohesive society, which
provides a good environment for foreign investment
...

But foreign companies may decide not to locate their
subsidiaries in Indonesia as their executives will be taxed at a
higher rate
...

Final judgement may contain:
•
•

•
•

Distortion of incentives to work may adversely affect
the supply side of the economy, which ultimately could
affect job opportunities for the lower paid
The effect of a rise in the top tax rate may depend on
other economic variables, including inflation and
growth
...

Depends on the size of the tax rate rise, a small rise
will have little impact
Depends on the longevity of the rise, if it is short-lived,
the effects will be minimal

Any other relevant points are to be credited

19

June 2024
Guidance
Limited analysis of redistribution
...

These address the question but are not developed into
a clear chain of reasoning
...

Reasonable evaluation of redistribution, considering
arguments/both sides/comparing alternatives
...

There is a line of reasoning presented with some
structure
...

Level 1 (1-2 marks)
(AO2 – 0 marks, AO3a – 1 mark, AO3b – 1 mark = 2
marks)
No application of knowledge about redistribution
...

Limited analysis of redistribution
...
Diagrams (if present) are
unlikely to be correct and not linked to the analysis
...


J205/02

Mark Scheme

Question

Answer
N
...

1
...


June 2024

Mark

2
...
The information is supported by limited
evidence
...

N
...
Any other relevant points and/or evidence of
learners’ understanding of the connections between the
various topics of both components to be credited
...
B
...


23

(a)

Using Extract 3, calculate the average amount, in £
billions, spent each year on total government spending
over the period shown in the table
...
5 + 952
...
6
3
N
...
No mark lost if £ sign or billions omitted, since the
question asked: “in £ billions”
...


Answers may include:
• Improves literacy/productivity/specialisation etc leading
to greater output
• Increases innovations etc leading to increased
productivity
• Improves ability to handle new technology/adaptable to
change and improve efficiency
• Means workers can access higher paying jobs and
therefore have more money to spend
• Means total demand within the economy increases as
a result higher government spending
23

(c)

Using the information in Extract 3, analyse how a cut in
interest rates can affect UK economic growth
...

Level 3 (5-6 marks)
(AO1a – 1 mark, AO2 – 2 marks, AO3a – 3 marks = 6
marks)
Reasonable knowledge and understanding
...

Reasonable application of knowledge to understanding
monetary policy
...
There is understanding of some the relevant
elements of the scenario
...
There is correct
analysis in the form of developed links
...

• When the bank rate is cut, saving is less attractive, so
households consume more and save less, which
leads to short-run increase in GDP
• When the bank rate is cut, saving is less attractive,
which means that there are fewer funds to lend out
...
B
...
In order to reach Level 3, there must be reference to
information in the Extract or context
...
If there is no analysis (AO3a), then application (AO2)
cannot be rewarded
...
Any relevant diagram(s) are
predominantly correct and linked to the analysis
...
The
information presented is entirely relevant and
substantiated
...
Most of the
terms/theoretical concepts are explicitly or implicitly
understood
...
There is an attempt to
use/adapt/change the terms/theoretical concepts in the
context
...
There is
correct analysis largely in the form of single effects
...
Any relevant diagram(s) may
be imperfectly labelled or not linked to the analysis
...
Some of
the terms/theoretical concepts are explicitly or implicitly
understood
...
There is an attempt to
use/adapt/change the terms/theoretical concepts in the
context
...
There
is an attempt at analysis which may include a single
effect that has some link to the question
...

0 marks
No work worthy of credit
...
B
...


23

(d)

(i)

Other than economic growth, state two economic
objectives that monetary policy can achieve
...

AO1a

Answers may include:
• Price stability
• Balance/surplus in the balance of payments
• Low unemployment

23

J205/02

Mark Scheme

Question
23
(d)
(ii)

Answer
Explain how higher interest rates in the UK may lead to
the international value of the pound increasing
...

2 marks for a correct explanation

• Demand for the pound rises (shifts right) [1], because
international savers/investors take advantage of higher
returns in the UK (and withdraw their funds from
overseas financial markets to exchange for pounds)
[1]

N
...
Only one of the bullet points is required
...

Use the information given in Extract 3 and your own
knowledge
...

• Reference to the UK or pound
Extent of Benefits vs Costs for each group evaluated
(AO3b):

24

6
1
AO2
2
AO3a
3
AO3b

All level descriptors describe the TOP of the level –
please read guidance at the beginning of the mark
scheme regarding best fit approach
...
The terms/theoretical concepts are
used/adapted/changed in the context of the given
scenario
...

Reasonable analysis about exchange rate changes
...
These address the question but are not
developed into a clear chain of reasoning
...

But those who are employed in the domestic travel sector
(e
...
hotels) may be laid off as fewer foreign tourists come to
the UK
2) Producers
• Those who import inputs (raw materials) and
capital goods will benefit from lower costs of
production
But output from UK firms will be less competitive in overseas
markets and will also face more competition from imports in
the domestic market

June 2024
Guidance
diagram(s), if present, may be imperfectly labelled or
not linked to the analysis
...

There is a well-developed and detailed line of reasoning
which is coherent and logically structured
...

Level 2 (3-4 marks)
(AO2 – 1, AO3a – 1 mark, AO3b – 2 marks = 4 marks)
Good application of knowledge about exchange rate
changes
...
There is good understanding of all the
relevant elements of the scenario
...
There is an
attempt at an analysis largely in the form of a single
effect
...
The relevant
diagram(s), if present, are unlikely to be correct and not
linked to the analysis
...
There may be a judgement, but this will not
be fully supported
...
e
...
B
...
If there is no analysis/evaluation, then application
(AO2) cannot be rewarded
...
In order to reach Level 3, there must be Application
(AO2), Analysis (AO3a) and Evaluation (AO3b)

June 2024
Guidance
There is a line of reasoning presented with some
structure
...


Level 1 (1-2 marks)
(AO2 – 0 marks, AO3a – 1 mark, AO3b – 1 mark = 2
marks)
No application of knowledge about exchange rate
changes
...

Limited analysis about exchange rate changes
...
Diagrams (if
present) are unlikely to be correct and not linked to the
analysis
...

Information presented is basic and may be ambiguous
or unstructured
...


3
...


to consumers and producers

N
...
Any other relevant points and/or evidence of
learners’ understanding of the connections between the
various topics of both components to be credited

---