Economics · Oct / Nov 2025 · Paper 22 · Question 1

Calculate foreign workers as a percentage of Japan’s labour force in 2022. 2.5% (1). 1 Accept 2.5 without %.

Identify two reasons why Japan has a high average age of population. Low birth rate (1)

high life expectancy (1)

good healthcare (1)

young adults moving abroad (1). 2 If more than two reasons are given, consider the first three.

Explain why some young Japanese people emigrate. To gain high wages (1)

enjoy a better living standard / able to purchase more goods and services (1). 2 One mark for identification and one mark for explanation.

Explain two ways Japan could attract more foreign workers. Logical explanation which might include:

more foreigners would be able to work in the country (1)

foreign workers are more likely to settle in the country if they are not separated from their families (1)

if gain high wages / enjoy living in the country would not want to leave / attract workers who want to live permanently in the country / give workers the opportunity to stay permanently / increase international mobility of labour (1). 4 One mark each for two ways identified and one mark each for two explanations. If more than two ways are given, consider the first three. Only the 3 listed identifications can be credited, and explanation marks can only be awarded if applied to a valid identification.

Draw a demand and supply diagram to show the effect of a decrease in population on the market for furniture. Coherent analysis which might include the following. D&S diagram: Axes correctly labelled – price and quantity or p and q (1). Original demand and supply curves correctly labelled (1). New demand curve shifted to the left (1). OR New supply curve shifted to the left (1). OR New demand curve shifted to the left AND new supply curve shifted to the left. Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or equilibrium points marked as E1 and E2 (1).

Analyse the relationship between global GDP per head and global air passenger numbers. Coherent analysis which might include the following. Expected relationship: Generally, a positive relationship (1)

the higher the global GDP head, the higher the air passenger numbers (1). Supporting evidence: 2016–2019 GDP per head rose and air passenger numbers increased (1). Analysis of expected relationship: Higher GDP per head increases purchasing power / ability to pay for air travel (1)

as people get richer, they travel more for leisure and business (1). Exception: 2021 (1)

GDP per head rose but air passenger numbers decreased (1). Analysis of exception: May have been a time delay in people gaining confidence in flying after COVID-19 pandemic / other influences on demand e.g. air fares (1). 5 Responses do not have to be in the format suggested but they should address the expected / normal relationship, offer supporting evidence of that, highlight any exceptions to that, and analyse the overall data. Supporting evidence should involve interpretation, not just description.

Discuss whether or not a high savings rate is likely to benefit Japan. Award up to 4 marks for logical reasons why it might, which may include:

as spending will not be high (1)

reduce (total) demand (1)

reduce demand-pull inflation (1)

improve the current account of the balance of payments (1)

firms able to borrow from banks (1)

on e.g. healthcare / education / provide for retirement / provide support for individuals in difficult times (1)

spend money saved on other priorities, e.g. healthcare (1). Award up to 4 marks for logical reasons why it might not, which may include:

reduce GDP (1)

increase unemployment (1)

cyclical unemployment (1)

could cause a recession (1)

reduce improvements in technology (1)

may lead to reduced government spending (1). 6 Reference to AD / total demand falling can be credited on either side of the argument, but only once. Apply this example to all questions with the command word DISCUSS (1g, 1h, 2d, 3d, 4d and 5d) Each point may be credited only once, on either side of an argument, but separate development as to how / why the outcome may differ is rewarded. Generic example mark Tax revenue may decrease… ...because of reason e.g. incomes may be lower. Tax revenue may increase because incomes may be higher i.e. reverse of a previous argument. Tax revenue may increase because of a different reason i.e. not the reverse of a previous argument e.g. government spending on subsidies may stimulate the economy more than spending on education.

Discuss whether or not labour mobility in Japan is likely to increase in the future. Award up to 4 marks for logical reasons why it might, which may include:

could increase skills / qualifications (1)

increase occupational mobility (1)

could enable people to move to different areas (1)

raise geographical mobility (1). Award up to 4 marks for logical reasons why it might not, which may include:

may have out-of-date skills (1)

more difficult to change jobs (1)

reduce occupational mobility (1)

may be more reluctant to move to a different area (1)

reason (1)

reduce geographical mobility (1)

making it difficult to move from areas with low house prices to areas with high prices (1). 6 Reference to occupational and geographical mobility can be credited on either side of the argument, but only once. Reference to falling house prices or improved transport must be linked to improved mobility for credit and vice versa.