Economics · May / June 2020 · Paper 22 · Question 5

State two key questions about how resources are allocated. One mark each for two from:

What to produce, how to produce it, for whom / who gets what is produced.

Explain two fiscal policy measures that can be used to reduce poverty. Logical explanation which might include: Rise in government spending on education (1)

make it easier for people to gain jobs / better paid jobs (1). Rise in government spending on healthcare (1)

providing a basic necessity / increase productivity of workers (1). Subsidise / free provision of food (1)

providing a basic necessity / reduce absolute poverty (1). Subsidise / free provision of housing (1)

helping those unable to afford housing (1). Increase in state benefits (1)

e.g. paying more in unemployment benefit will raise the income of some of the poor (1). Use of progressive taxes / reduction of regressive taxes (1)

reduce relative poverty (1).

Analyse why a country may have low productivity. Coherent analysis which might include: Education may be low (1)

and training may be low (1)

workers may lack skills (1). Wages may be low (1)

working conditions may be poor (1)

reducing the motivation of workers (1). There may a lack of investment (1)

workers working with out of date/low quality capital goods (1). Healthcare may be low (1)

causing workers to be tired (1).

Discuss whether or not mergers benefit an economy. In assessing each answer, use the table below. Level Description A reasoned discussion which accurately examines both sides of the economic argument, making use of economic information and clear and logical analysis to evaluate economic issues and situations. One side of the argument may have more depth than the other but, overall, both sides of the argument are considered and developed. There is thoughtful evaluation of economic concepts, terminology, information and/or data appropriate to the question. The discussion may also point out the possible uncertainties of alternative decisions and outcomes. 6–8 A reasoned discussion which makes use of economic information and clear analysis to evaluate economic issues and situations. The answer may lack some depth and development may be one-sided. There is relevant use of economic concepts, terminology, information and data appropriate to the question. 3–5 There is a simple attempt at using economic definitions and terminology. Some reference may be made to economic theory, with occasional understanding. 1–2 A mark of zero should be awarded for no creditable content. Why they might: