Examples

Question 1

Explain why the CMA initially prevented Vodafone & 3 from merging

Answer 1

CMA says too much market share and there has already been a large merger (O2 and virgin in 2021)
Companies say they’ll have 11Billion investment into the 5G network
CMA says companies always say that but they will try to find a legally binding contract saying they have to invest if they merge

This merger has gone ahead is due to be finalised in the coming months

Question 2

Why has the Heathrow expansion been delayed over the years and why is it happening now

Answer 2

Environment concerns - lawsuits due to noise & environmental activists
The government now believes that growth is the primary objective now, and ‘all other objectives are secondary’ (specifically the environment), therefore this may reduce the difficulty in gaining planning permission across the UK as the can’t just change the law for Heathrow

Question 3

What opportunities does the Heathrow expansion provide

Answer 3

Increase passenger capacity to over 130 million per year,an increase from the current 84 million, supporting tourism and business travel.
Create up to 180,000 new jobs across the UK.
Add £61 billion to the UK economy over the next few decades through increased trade and investment.
Ease strict planning laws

Question 4

What is the idea about ‘Europe’s silicon valley’

Answer 4

Government has vowed to build Europe’s Silicon Valley between Oxford and Cambridge by improving the infrastructure between the two cities, incentivising firms to set up there

Question 5

What is the impact on planning permission in the UK from the Heathrow expansion

Answer 5

May reduce the difficulty in gaining planning permission across the UK as they can’t just change the law for Heathrow
However the mayor of London and environmental lobbyists claim they will challenge this in court, so it may not go ahead

Question 6

Why did Astrazeneca cancel their £450m investment and what does this show?

Answer 6

In January 2025 Astrazenica cancelled their £450m investment due to a lack of government funding
If AstraZeneca had invested it would have generated jobs & multiplier effect etc
However AstraZeneca still invests over £2.5bn in the economy so the effects of this new investment cancellation may not be as dire.

The governments reason was that it ‘didn’t add up for the taxpayer’, meaning that the government thinks the benefits of investing in AstraZeneca are more than investing the same sum in other areas of the economy. This indicates the government is focusing on its priorities to ensure more effective SSP’s.

Question 7

Give a real world example of tariffs having a negative impact

Answer 7

In early 2025, speculation around the introduction of tariffs on China Canada and Mexico by America caused the global stock market to fall, further supporting the economic argument that tariffs have a negative effect

Question 8

How may Heathrow worsen regional inequality

Answer 8

By prioritising the south east as a target area for growth

Question 9

Give 5 changes to the benefits system which took place in march

Answer 9

• Going to be harder to claim PIP , which is a non means tested benefit that supports those who with health conditions that is currently worth £108 a week
• There will be a PIP assessment process review
• Universal credit basic rate will rise to £775 by 2030
• Disability U.C top ups are going down
• New benefit called unemployment insurance will be introduced, which is a merger of job seekers allowance and employment support allowance

Question 10

Rachel reeves said ‘growth is our number one priority’- how does this conflict with other macro objectives

Answer 10

In April 2025, the ONS released a statement that public sector net borrowing is projected at £140 billion for the fiscal year 2025/26. Which suggests the government is prioritising growth over inflation and budget deficit

Question 11

What did the OBR say about predicted growth this year following the spring statement

Answer 11

The Office for Budget Responsibility (OBR) has downgraded predicted growth for this year from 2% following the autumn budget to 1% following the spring statement

Question 12

What did the OBR say about predicted growth over the next 4 years in the spring statement

Answer 12

Upgraded estimated growth for the next four years, to 1.9% next year, 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029

Question 13

What is the new forecast for average inflation this year as mentioned in the Spring statement

Answer 13

Inflation is forecast to average 3.2% this year, up from 2.6% previously forecast in the autumn budget, before falling back to 2.1% in 2026 and then hitting the government’s 2% target in 2027

Question 14

What is the OBR’s predictions on the effect of the changes to England’s planning laws on housing (SPRING STATEMENT)

Answer 14

The OBR has estimated changes to England’s planning system announced last year will boost private sector housebuilding by 170,000 over five years

Question 15

What is the forecast for the effect of the changes to England’s planning laws on growth

Answer 15

The changes are forecast to grow the size of the economy by 0.2% by 2030, and 0.4% by 2035

Question 16

What is projected tax burden projected to be, as mentioned in the spring statement

Answer 16

Tax Burden: Projected to peak at 37.7% of GDP by 2027–28, the highest in decades. ​

Question 17

Describe the trend in minimum wage/National living wage over the last decade, and the change made in the spring statement

Answer 17

Minimum wage has rose every year for the last decade
And in the spring statement
National Living Wage: Increased by 6.7% to £12.21 per hour, providing a £1,400 annual pay rise for approximately three million workers.

Question 18

State what the government mentioned in the spring statement about housing

Answer 18

Planning Reforms: Aimed at boosting housebuilding to 305,000 homes per year by 2029, just over the current governments initial pledge in the autumn budget24 to build 1.5m houses by the end of their term.
These changes are expected to add £6.8 billion to the economy. ​

Question 19

What did the government mention in the spring statement about welfare reforms, state the impact of this on poverty

Answer 19

Welfare Reforms: Planned cuts of £4.8 billion by 2029–30, including restrictions on Universal Credit and Personal Independence Payments, particularly affecting younger claimants.

Poverty Impact: Welfare cuts are projected to increase relative poverty for 250,000 people, including 50,000 children.

Question 20

What did the government say in the spring statement about its plans for civil service jobs

Answer 20

Civil Service: Plans to cut 10,000 jobs as part of efforts to reduce costs by £2 billioon

Question 21

What is the governments plans, as mentioned in the spring statement, about the foreign aid budget

Answer 21

Aid Budget: Reductions totalling £2.6 billion, reallocating funds to support increased defence spending

Question 22

What is the argument against raising minimum wage to increase productivity and therefore growth

Answer 22

The UK has a productivity gap, which means the effects of aiming to increase productivity may not be as effective as intended

Question 23

When did the government say they will increase NI contribution on employers

Answer 23

Autumn budget 2024

Question 24

Which visa did the government introduce which may aid in immigration and therefore long run growth

Answer 24

HPI visa was introduced in may 2022
This visa is designed to attract recent graduates from top global universities to the UK, allowing them to work or seek employment without the need for sponsorship

Question 25

Which city has the second highest pollution levels in the world

Answer 25

Dheli

Question 26

Give a real world example of a recent policy which aims to stimulate growth

Answer 26

Heathrow 3rd runway Increase passenger capacity to over 130 million per year, supporting tourism and business travel. Create up to 180,000 new jobs across the UK. Add £61 billion to the UK economy over the next few decades through increased trade and investment.

Question 27

What statement did the government make about growth as a target

Answer 27

In the Autumn Budget, the government stated that growth is the primary objective now, and ‘all other objectives are secondary’ (especially the environment)

Question 28

Give an example of business confidence being affected leading to hindrance of short run growth

Answer 28

NI on employers gone up so lower business confidence

Question 29

Give a real example of how growth may worsen government budget deficit

Answer 29

In April 2025, the ONS released a statement that public sector net borrowing is projected at £140 billion for the fiscal year 2025/26 (Public sector borrowing for 24/25 was just under £152bn)

Question 30

What did the OBR say about predicted growth this year in the spring statement

Answer 30

The Office for Budget Responsibility (OBR) has downgraded predicted growth for this year from 2% to 1%

Question 31

What did the OBR say about predicted growth over the next 4 years in the spring statement

Answer 31

Upgraded estimated growth for the next four years, to 1.9% next year, 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029

Question 32

Give an example of less immigration into the UK which affects LR growth

Answer 32

After leaving the EU, immigration levels fell significantly, but the introduction of the HPI visa may aid this

Question 33

When did the bank of England cut interest rates and by how much

Answer 33

On the 8th of may the BOE cut the interest rate from 4.5% to 4.25%, with Andrew bailey, the governor of the BOE stating he was "still of the view that the path, gradually and carefully, is downwards".

Question 34

What is a common cap target for a governments budget deficit

Answer 34

Governments try to keep the budget deficit to no more than 3% of GDP. In the financial year 24/25, the UKs was 5.3%

Question 35

What empirical evidence shows that the UK has a productivity gap

Answer 35

The ONS stated that as of 2022, the UK's output per hour worked was approximately 20% lower than that of France and Germany, and nearly 40% below that of the United States UKs main trading partners are EU then USA

Question 36

Which infrastructure projects are designed to help geographical distribution in the UK

Answer 36

HS2 Network north

Question 37

Give an example of poor geographical distribution of income in the UK

Answer 37

Financial services in the city consistently contributes more than 10% if total UK GDP

Question 38

How many people are out of the labour force in the UK (of working age), and what could be done to aid this

Answer 38

As of early 2025, approximately 9.2 million people aged 16 to 64 in the UK are economically inactive—that is, they are not in employment and not actively seeking work. This figure represents about 21.4% of the working-age population. (ONS STAT) Raising minimum wage Tapered benefits system (unemployment insurance) Lower tax rates (increase incentive to work)

Question 39

When was corporation tax cut recently in the UK

Answer 39

From 2010 to 2019 corporation tax was cut every year from 28% to 19% Was then maintained at 19% until 2023, the main rate increased to 25% for companies with profits over £250,000. A small profits rate of 19% was introduced for companies with profits up to £50,000 This adjustment in 2023 marked the first increase in the UK's main corporation tax rate since 1974

Question 40

Which cities is network north planning to connect

Answer 40

Liverpool, Manchester and leeds

Question 41

What is the criticism of the trickle down effect

Answer 41

An OECD report in 2014 provided empirical evidence suggests that the trickle down effect doesn't exist

Question 42

What is the current youth unemployment figure

Answer 42

In December 2024 to February 2025, the UK youth unemployment rate (for 16-24 year olds) was 14.6% which represents a significant increase from the previous year, where the rate was 12.8% 12.8--> 14.6

Question 43

What is the UK official target for growth

Answer 43

2.75% But OBR have now said UK only capable of 1.7%

Question 44

Give a policy which aids in the shortage of skilled labour workers in the UK economy that also contributes to geographical mobility

Answer 44

T-levels allowing 20% of learning to be done at home, with up to 50% for digital courses, which potentially lowers geographical barriers

Question 45

What is rezoning

Answer 45

Updating zoning laws to allow for higher density housing in urban areas (London skyline may affect this)

Question 46

How can we reduce frictional unemployment, give a real world example

Answer 46

The internet: allowing people to find their new jobs to start right when they leave their previous job Websites like indeed can aid in this

Question 47

Give an example of geographical immobility for workers wishing to access higher paying jobs in london

Answer 47

In 2024, full-time jobs in London paid a median annual salary of £44,180, approximately 18% higher than the UK median of £37,430 According to the ONS, the average house price in London was £556,000 in February 2025, more than double the UK average of £268,000

Question 48

Give an example of a supply side policy which can aid in reducing structural unemployment

Answer 48

Labour said they will build 1.5 million new houses (lower geographical immobility through lower house prices) Network North plan - (Higher mobility of labour) T-levels study from home

Question 49

What stat shows that the governments target of building 1.5m new houses by the end of their term is unrealistic

Answer 49

In January 2025, the Office for National Statistics (ONS) reported that construction output in Great Britain experienced a 0.2% decrease in volume terms, following a similar decrease in December 2024

Question 50

As of Q4 2024, how much was the UK's CURRENT ACCOUNT deficit as a proportion of GDP

Answer 50

2.9%

Question 51

Give a real world example of a country with a lower inflation rate seeing an appreciation in their currency

Answer 51

The long-term appreciation in the German D-Mark in the post-war period was related to the relatively lower inflation rate

Question 52

Give an example of speculation affecting the value of the pound

Answer 52

The fall in the value of the Pound post-Brexit was partly related to the concerns that the UK would no longer attract as many capital flows outside the Single Currency.

Question 53

Give an example of trade war

Answer 53

In 2024 EU hits China with big taxes in E.V sales battle (10% to 45%) E.U politicians saying state subsidies means China is Dumping China retaliated by placing a tariff on French cognac EU said it would challenge this at WTO (WTO no legal standing) China claims its also an anti dumping measure

Question 54

Give an example of the way of life argument for tariffs

Answer 54

Norway places tariffs on fiberglass canoes since culturally they make canoes from wood

Question 55

Give an example of a competitive devaluation and how this acts as a form of protectionism

Answer 55

Chinas artificially low value currency Acts as a form of protectionism by making exports cheaper and imports relatively more expensive, which protects domestic industry by making them relatively more competitive

Question 56

Give an example of the WTO being effective

Answer 56

Boeing/Airbus subsidy debate between the USA and EU in 2021

Question 57

Give an example of the WTO being ineffective

Answer 57

The 2001 Doha round Ended with WTO members failing to reach consensus since 2015

Question 58

Give an example of an event indicating that the UK may be struggling with trade due to Brexit.

Answer 58

In December 2024, the UK has became the first European nation to join CPTPP an indo-pacific trade block which includes countries like Japan, Vietnam, Peru, Chile and Malaysia Officials hope membership will boost Britain's flagging economy by as much as £2.0 billion ($2.5 billion) a year.

Question 59

Give an example of a tariff recently placed in order protect domestic industry from foreign competition

Answer 59

New American tariff introductions were said to be reasoned in an attempt to revive the American steel industry, which faced difficulty to compete with Chinas low costs of production But hesitation due to strong reactions from the global financial markets may mean this is not the best idea, and allowing the laws of comparative advantage to take place may be a more suitable option

Question 60

Explain why US tariffs may have less of an effect on the UK now

Answer 60

In May 2025, the US and the UK began negotiations around reductions on some of the tariffs imposed on the UK For example the 25% tariff on steel and aluminium imports into the US that came into effect in March has been scrapped, which may help firms such as British Steel Corp was brought under government control as it struggled to stay operational

Question 61

Give an example of globalisation leading to greater risk of external shocks

Answer 61

2008 banking crash started in USA yet affected the world 6 day Suez canal blockage 2021 led to global supply chain disruptions

Question 62

Give an example of low human capital in LEDC's

Answer 62

Zambia spent only 1.35% of GDP on education in 23/24 whilst the UK spent 4.1%, whilst having significantly higher GDP levels

Question 63

Explain how a fall in volatile commodity value can lead to inflation for a country with PPD. Give a real world example

Answer 63

A fall in a volatile commodity’s value reduces export earnings for a country reliant on primary products, decreasing demand for its currency and causing depreciation. This makes imports more expensive, leading to cost-push inflation. Nigeria (2016) faced high inflation after oil prices crashed, weakening the naira and raising import costs.

Question 64

Explain how the dutch disease can affect resource rich nations, give a real world example of this happening

Answer 64

Dutch Disease occurs when a resource boom (e.g., oil discovery) strengthens a country’s currency, making other exports more expensive and less competitive. This can lead to a decline in other unrelated sectors and job losses. The UK in the 1980s experienced a mild Dutch Disease after discovering North Sea oil, which strengthened the pound and hurt manufacturing exports.

Question 65

Give an example showing how financial institutions may not have a great impact on employment levels

Answer 65

Goldman Sachs have stated its diversity policy has ‘served its purpose’ and they have removed their diversity policy following the USA removing all DEI departments

Question 66

What is the current inflation rate

Answer 66

Prices in the UK rose by 2.6% in the 12 months to March, less than in the previous month but still above the Bank of England's target of 2%

Question 67

What is the current unemployment rate in the UK

Answer 67

The UK unemployment rate for those aged 16 and over was 4.5% in January to March 2025, according to the Office for National Statistics (ONS). This figure represents an increase from the previous year's 4.3%, and the previous figure by the ONS of 4.4%. However, the ONS has said its unemployment figures should be treated with caution because of low response rates to the survey on which they are based.

Question 68

Give an example of a nations artificially low currency benefiting them

Answer 68

China's artificially low valued currency has significantly boosted its exports in sectors such as steel and technology through the early 2000's, following through to the current decade (Dumping accusations though)

Question 69

Explain Chinas exchange rate system

Answer 69

China pegged its currency (CNY) from 1997 to 2005 to the U.S. dollar but since has a managed float But heavy use of their FCR means that the yuan (CNY) effectively acts as if it is fixed

Question 70

Draw a diagram (and explanation) of the effects of the Ukraine-Russia war, and the lack of timely response from the BOE

Answer 70

BOE hastily raised interest rates by 0.5% to 1.75%, marking the largest increase in 27 years.

Question 71

What statistic shows the effect of the increase of NI on employers as mentioned in the autumn budget

Answer 71

The ONS published an article in May 25 showing that the UK's job market has continued to weaken with the number of employees on companies' payrolls decreasing by 47,000 in March and by an estimated 33,000 in April Also effects NI increase: Risk of inflation - higher business costs Less supply side investment as lower business confidence

Question 72

According to the ONS, how are wages moving in terms of inflation

Answer 72

In May25, the ONS released a report displaying that wage growth slowed, but pay is still rising faster than the rate of inflation.