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May 2025 Edexcel: A Level Economics A 9ECO/02 Paper 2 – The National and Global Economy – Merged

ECON100 Economics — exam and revision material · Other

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Economics exam material, 148 pages. Originally published on StudyMerit.

Pages
148
Academic year
2025/2026
Language
English

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EdExcEl A - lEvEl Economics PAPEr 2 ExAm wi th AccurAtE AnswErs & ExPlAnAtions | GuArAntEEd PAss | lAtEst vErsion 2026 1. Macroeconomics - ANSWER The study of the economy as a whole, including inflation, growth and unemployment. 2. Aggregate demand - ANSWER The total of all demands or expenditures in the economy at any given price. 3. Aggregate demand curve - ANSWER Shows the relationship between the price level and equilibrium national income. As the price level rises the equilibrium level of national income falls. 4. Animal spirits - ANSWER Business confidence: the mood of managers and owners of firms about the future of their industry and the wider economy. 5. Gross investment - ANSWER The addition to capital stock, both to replace the existing capital stock which has been used up (depreciation) and the creation of additional capital. 6. Investment - ANSWER The addition to the capital stock of the economy. 7. Unemployment rate - ANSWER The number of those not in work, but seeking work, divided by the labour force expresses as a percentage.

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8. Balance of payments account - ANSWER A record of all financial dealings over a period of time between economic agents of one country and all other countries. 9. Balance of trade - ANSWER The value of exports minus imports. 10. Capital and financial accounts - ANSWER That part of the balance of payments account where flows of savings, investments and currency are recorded. 11. Current account - ANSWER That part of the balance of payments account where payments for the purchase and sale of goods and services are recorded plus primart and secondary incomes. 12. Current balance - ANSWER The difference between the value of total exports and total imports including flows of primary and secondary incomes. 13. Current account deficit or surplus - ANSWER A deficit exists when imports are greater than exports; a surplus exists when the value of exports are greater than imports. 14. Balanced budget - ANSWER A statement of spending and income plans by government where spending is equal to its receipts, mainly tax revenues. 15. Bank of England base rate - ANSWER A rate of interest charged by the Bank of England to banks to borrow money overnight. It is the most important interest rate in the UK financial system because it influences other

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interest rates in the UK such as savings rates and rates of interest on loans by banks. 16. Budget - ANSWER A statement of the spending and income plans of an individual firm or government. The Budget is the yearly statement on government spending and taxation plans in the UK. 17. Budget deficit - ANSWER A deficit which arises because government spending is greater than its receipts. Government therefore has to borrow money to finance the difference. 18. Budget surplus - ANSWER A government surplus arising from government spending being less than its receipts. Government can use the difference to repay part of the National Debt. 19. Contractionary fiscal policy - ANSWER Fiscal policy which leads to a fall in aggregate demand. 20. Contractionary monetary policy - ANSWER Monetary policy which leads to a fall in aggregate demand. 21. Direct tax - ANSWER A tax levied directly on individuals or companies such as income tax or corporation tax. 22. Expansionary fiscal policy - ANSWER Fiscal policy which leads to an increase in aggregate demand.

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