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General Certificate of Secondary Education
June 2009
ECONOMICS
Paper 1
Higher Tier
Wednesday 17 June 2009

3144/1H

H

1.30 pm to 4.00 pm
For Examiner’s Use

You will need no other materials.
You may use a calculator.

Question

Mark

Question

Time allowed: 2 hours 30 minutes

1

4

Instructions
Use black ink or black ball-point pen. Use pencil only for drawing.
Fill in the boxes at the top of this page.
Answer five questions.
Answer all questions in Section A.
Answer one question in Section B.
You must answer the questions in the spaces provided. Answers
written in margins or on blank pages will not be marked.
Do all rough work in this book. Cross through any work you do not
want to be marked.

2

5

3

6

Information
The maximum mark for this paper is 147.
The marks for questions are shown in brackets.
You are reminded of the need for good English and clear presentation
in your answers. All questions should be answered in continuous
prose. Quality of Written Communication will be assessed in
Questions 2(d), 5(b) and 6(b).

(JUN0931441H01)

G/K43086 6/6/6/6/3

Mark

Total (Column 1)

Total (Column 2)

TOTAL

Examiner’s Initials

3144/1H

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for marking

2
SECTION A
Answer all questions in this section.
Answer the questions in the spaces provided.

Total for this question: 29 marks
1 Study the information below and answer the questions that follow.
Item A
Fairtrade
Sales of Fairtrade products have been growing rapidly in the UK. The following charts
show the retail sales (£m) for chocolate/cocoa, coffee and bananas for 2002 and 2005.
£65.8 m

£47.7 m

£23.1m
£17.3m

Key
Chocolate/
cocoa
Coffee

£21.9 m

Bananas

£7.0m

2002

2005

Café Direct is an example of a Fairtrade business. Last year Café Direct paid
£0.5 million out of its profits to coffee, tea and cocoa growers in poor countries, instead
of giving the money to its shareholders.

(02)

G/K43086/Jun09/3144/1H

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3
1

(a) Using Item A, circle the product below which showed:

1

(a)

(i) the biggest increase in retail sales (£m) from 2002 to 2005.
Chocolate/cocoa

1

(a)

Bananas

(1 mark)

(ii) the biggest percentage growth (%) in retail sales from 2002 to 2005.
Chocolate/cocoa

1

Coffee

Coffee

Bananas

(1 mark)

(b) Using Item A, explain why Café Direct could be called a Fairtrade business.
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(2 marks)
(Extra space) .......................................................................................................................
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(c) How are the objectives of a Fairtrade business likely to be different from those of other
businesses?
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(2 marks)
(Extra space) .......................................................................................................................
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Question 1 continues on the next page

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G/K43086/Jun09/3144/1H

......................................................................................Areas outside the box will not be scanned for marking 4 1 (d) Using Item A.................................................................................................................................................................................................................................... ..................................................... 1 (e) (i) Explain how the economy of St Lucia might benefit from Sainsbury’s decision................................................................................... ........................................................................... specialises in banana production........................... ............ Item B St Lucia....................................... ............................................................ .................................................................... ......................................................... ............................................................................................................................................................................... identify and explain one example of opportunity cost......... (4 marks) (Extra space) ...................................................................................................................................... .............................................................................................. This Fairtrade decision has saved the banana farmers of St Lucia...................................................................................... .............................................................................................................................................................................. .......................................................................................................... ........... ........................................................... ...................................................................................................................................................................................................................... ........................................................................... In 2006 Sainsbury’s bought 75% of St Lucia’s bananas.................................................... .......................................................................................................................................... ........................................... ......................................................................................................................................................................................................................................................................... an island in the Caribbean............ (04) G/K43086/Jun09/3144/1H .......................................... ............................................................................................................................................................................ (3 marks) (Extra space) .................. ...........................................................................................................................................

.................................... .................................. ......................................................................................................... ............................................................................................................................................................................................Areas outside the box will not be scanned for marking 5 1 (e) (ii) Discuss whether or not specialisation benefits an economy........................................................................................................................................................................................................................................................................................................................................................................................................................................... ........ ....................... ............................................................. ........................... (6 marks) (Extra space) ..................................................................................... ...................................................................................................................................................................................................................................... ................ ............................. ...................................................................... .......................................................................................................................................... ....................................................... ........................ ................................................................ Question 1 continues on the next page Turn over 8 (05) G/K43086/Jun09/3144/1H .............................................................................................................................. ....................................................................................................................................................................................................................................................................................................................................... .........................................................................................................................................................................................................................................................................

......................... ......................................................................................................................................................................................................................................... (2 marks) (Extra space) ................................ .............................................. ............................................................................................................................. delivering both social and economic benefits................................................... ............................................................ ....................................................................................................... .......... 1 (f) (ii) a profit maximising company in the private sector................................................................................ ........................... It is argued that social enterprises can be an effective alternative to both the public and private sectors............................................................................................................................................................................................................................ (2 marks) (Extra space) ............................................................................................................... They are likely to sell ethically sound products........................................................................................................................................................... (06) G/K43086/Jun09/3144/1H ........... .............................................................................................. 1 (f) Explain how a social enterprise is different from: 1 (f) (i) a public sector organisation ...........Areas outside the box will not be scanned for marking 6 Item C Social enterprises are businesses with a reputation for social and environmental responsibility............................................................................................ ................................................

.............................................. ...................................... ......................................................................................................................................................................................................................................................................................................................................................... ................................................................................. ............................................................................................................................................ explain the differences between the public and the private sector......................... .................................................. ................................................................................................................................................................................................................................................................................................................................................ (6 marks) (Extra space) ............................................................................................................... Turn over for the next question Turn over 8 (07) G/K43086/Jun09/3144/1H ____ 29 ..................................................................................................................................................................................................................................................................... ................................................ ............................................................................................................... ...... ............. ......................................................... ..................... ......................... ................................................................................ ............................................................................................................................................................................................................... ................................................................................................................................................................................................................................................................................................................................................................................................. .Areas outside the box will not be scanned for marking 7 1 (g) Using examples....................................................................................................................................

50 D O 2 (a) (08) 300 Number of meals sold (millions) (i) Draw and label a new curve on the diagram above to show the price increase. (4 marks) G/K43086/Jun09/3144/1H . Item D £5 fish and chips as potato shortage bites One of Britain’s most popular takeaway meals is facing a price rise caused by weather damage to the potato crop and increases in the cost of fresh fish. 2 (a) This diagram shows the price of fish and chips in Britain before the price rise.Areas outside the box will not be scanned for marking 8 Total for this question: 28 marks 2 Study Item D and answer the questions that follow. Recently. many fish and chips shops have added 50p to the price of a meal. Price S £4.

...................................................................................................................................................................... .........................Areas outside the box will not be scanned for marking 9 2 (a) (ii) Using Item D and your diagram................................................................................................................................................................................ .................................................................... ................................................. ............................................................................. ............................................................................................................................................................................................................................................................................................ ........................................................................................................................................................... ............................................................................................................................................................................................................................. .................................................................................................... ................................................................................................................................................................................................................................................................................................ (4 marks) (Extra space) ......................... ................................ ................................................................................................................................................................................................................................................................................................................................................................ Question 2 continues on the next page Turn over 8 (09) G/K43086/Jun09/3144/1H ................................................................................................................................................................................................................................................................................................ ................................................................................................................................................................................................................................ .................. ................................... .............................. 2 (b) Explain two factors that influence the price elasticity of demand.............................. (4 marks) (Extra space) .......................................................... ...... .............. ................................. ................................................................................................................................................................................................................................................. ....................................................................... ........ explain why the price of fish and chips has increased...................

....................................................................................................................................................................................................................................................................................................... .................................................. ..................................................................................... .......................................................................................................................................................................................................................................................................................................... (10) G/K43086/Jun09/3144/1H .......................................................................... ...................................................................................................... .................................................................................................................................................................................... ......... ....................... ............................................................................................................................................................................................... (3 marks) (Extra space) ............................................................... 2 (c) (ii) an increase in the rate of VAT on fish and chips takeaway meals........................................................................................................................................... ............... ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ ............................................................................................... ...........................Areas outside the box will not be scanned for marking 10 2 (c) Explain the effect that the following might have on the price of fish and chips: 2 (c) (i) a drop in the price of Chinese takeaway meals.................................... .................................. ........................ .......... ...... (3 marks) (Extra space) .....................................................................

...................................................................................................................................................................................................................................................................... ..................................................................... ........... ......... ................................................................................................................. ............................................................................................................................................................................................... ...................................................................... .................................................................................................................. ................................................................................................................................................... ................................ ............................................................................................................................................................................................................................ ............................................................ .........................................................................................................................................................Areas outside the box will not be scanned for marking 11 2 (d) Discuss why the price of takeaway fish and chips in a fishing port will be lower than a fish and chips meal in a top quality London restaurant................................................................................................. Turn over 8 (11) G/K43086/Jun09/3144/1H ____ 28 .................................................................................................................................................................................................... ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... (8 marks) Plus Quality of Written Communication for Question 2(d) (2 marks) (Extra space) ........................................................................................................................................................................................................................................................... ..................................... ........................................ ...................... ................................................................................................................................................. .................................................... ................................ .................... ......................................................................................................... ................................................................................................................................................................................... ......

..................................................................................................................................................................................... Item E Bus companies compete for declining numbers Apart from London................................................................................................ ................... 3 (b) (i) Explain the meaning of ‘external costs’.................................................................. .................................................................................. 3 (a) Outline one reason why fewer people outside London travel by bus.................................................................. bus use has declined dramatically in the UK since services were deregulated over 20 years ago....................................... There are 25% fewer passenger journeys now but the buses cover 25% more miles...Areas outside the box will not be scanned for marking 12 Total for this question: 30 marks 3 Study Items E and F and answer the questions that follow.................................................................................................................................. It is easier to run bus services now and there has been intensive competition on popular routes................................. ............................................................................... This has caused more traffic jams and greater air pollution........................................................................ ...................................................... .................... ... ...... .................................................................................. (2 marks) (Extra space) ................................. In Manchester....................................................... increased competition has led to ‘bus wars’ with buses from different companies stopping at the same bus stops to compete for passengers............. (12) G/K43086/Jun09/3144/1H .................................................................................................................................................................................................................... .............................................................. ..................................................... Outside London fares have risen by over 80% in real terms......................... but in London the increase has been a lot smaller.. (2 marks) (Extra space) ...................................................................................................................

.................................................................................................................................................................................. 1. Question 3 continues on the next page Turn over 8 (13) G/K43086/Jun09/3144/1H ................................................................................................ ................. 3 (b) (iii) Explain two effects a ‘bus war’ might have on bus passengers............................................................................. ....................................................................... 2................................................................ ........................................................................................................................................................................................ (2 marks) (Extra space) ................................................................................................................................... ........................................... ...................... identify two external costs of the ‘bus wars’ in Manchester............................................................................................................................................................................................ ........................................ .................................. (4 marks) (Extra space) ...................................... ....................................................................................................... ................................................................. ............... 2.......................................................................................... ................................................................................................................................................................................................................Areas outside the box will not be scanned for marking 13 3 (b) (ii) Using Item E............................................................................................................................................................................................................................................................................................ .................................................................... ............. ................................................................................................................ ..................... 1.................................................................................................. .............................................

..................................................................... ................. (2 marks) (Extra space) .......... (4 marks) (Extra space) ................................................................................................................................................................................................................................................................................................................................................................................................................................................. .................................................................................... .................................................................................................. 3 (c) (ii) How could a bus company use this information about price elasticity of demand when considering a change to its fares? ............................................................................ ............................................................................................................................................ .................................................................................................................................................................................................................................................................................... ........................................................................................................................................ ................................................................................................................................................... ......................................................................................................................... 3 (c) (i) What does the term ‘inelastic’ mean? ....................................................................................Areas outside the box will not be scanned for marking 14 3 (c) The price elasticity of demand for bus travel outside London is inelastic............. ........................................................................................................................................................................................................................................................ ................................ .................................................................................................................... ...................................................................................... (14) G/K43086/Jun09/3144/1H ......... ........................... ..............................................................................................

......... Question 3 continues on the next page Turn over 8 (15) G/K43086/Jun09/3144/1H .................... .. ....................................................................................... 1............................... bus fares have risen by only 36% but bus use has increased by 55%............................................................................................ .................................................................................................................................................................................................................................................................................................................................... 2........ ............................................................................................................... (2 marks) (Extra space) ..................... .......................................................................................................................... ...................................................................................................................................................................... .................................................... ....................................................................................................................................... 3 (d) (i) Give two private costs of motoring........................... ............ ............................................................. ................................ which is a form of tax paid by motorists driving into central London.................................................................................................................................... ................................................................................................................................... .............................................................................. ........................................................................................................................................ (4 marks) (Extra space) .............................................................................................................................................................................. .......................... 3 (d) (ii) Explain how the congestion charge affects the social costs of motoring in London..................................... This is almost certainly linked to the congestion charge..................................Areas outside the box will not be scanned for marking 15 Item F In London........................................................................................................................................ .......................................................................................................................

........................................................................................................................................................................... (16) G/K43086/Jun09/3144/1H ____ 30 ..................................................................................................................... .............................................................................................................................. .................................................................................................................................... (8 marks) (Extra space) .... ................................................................................................................................................................................................................................................................................................................................................................................. ....................................................................................................................................................................................................................... .................................... .............................................................................................................................................................................................................. ............................................................................... .............................................................. ....................................................................... .................................................... ......................... ...................................................................................................................................... ........................................................................................................................................................................................................................... ................. ................................................................................... .............................................................................................................................................................................................................................................................................................................................. ......................................................... ............................................................................................................................................................................................................................................................................................ ................................................................................................................Areas outside the box will not be scanned for marking 16 3 (e) Discuss whether the introduction of a congestion charge in a city might lead to more bus travel............................................... ............................................................................................................................................................................................................... ........................................................................................................... .................................................................................. ................................

17 Turn over for the next question DO NOT WRITE ON THIS PAGE ANSWER IN THE SPACES PROVIDED Turn over 8 (17) G/K43086/Jun09/3144/1H .

................. ............................................ ............... .... ......... ...........................Areas outside the box will not be scanned for marking 18 Total for this question: 30 marks 4 Study Items G and H and answer the questions that follow........................................................................................ and very little inflation % change on 6 previous year GDP Growth in the UK 4 2 0 –2 1990 1995 2000 2005 Inflation in the UK % change on 10 a year earlier 5 0 1990 4 (a) Inflation targeting introduced 1995 2000 2005 (i) What does an increase in Gross Domestic Product mean for an economy? ....... (2 marks) (18) G/K43086/Jun09/3144/1H .................................................................................................. Item G No more boom and bust ............................................................................. .................................... ............................................................................... ...............................

......................................................... ........................................................................................................................................................................................................ ........................................................................................................................................................................................................................................................................................................ (2 marks) (Extra space) .......... ......................................................................................................................................................................................................... ................ Question 4 continues on the next page Turn over 8 (19) G/K43086/Jun09/3144/1H ........................................................................................................................ What does this mean? ............................................................................. ..................................................................................................................................... ................................................................................................................. describe what happened to the UK economy between 1990 and 1995................................................................................... ......... ......................................... ........................................................ ................................................................................................. ................................................................................................................................................................................................................................................................................................................................................................. ......................................................................................................................................... ...........................................................Areas outside the box will not be scanned for marking 19 4 (a) (ii) Using Item G................................................................................................... ............................. ....... 4 (a) (iii) The UK economy has an inflation target of 2%......................................................................................................................... (4 marks) (Extra space) ....

......................................................................................... ............................................................................................................................. 2............................................................................................................................................................................................................................................................................................. .................... ... ............................................................... ............................. ................................................................................................... Outline two reasons for this objective................... ................... 4 (b) Explain how monetary and fiscal policies can bring about an economic recovery.......................................................................................................................................................................................................................................................................................................................................................................Areas outside the box will not be scanned for marking 20 4 (a) (iv) The government also has a macroeconomic objective to lower unemployment............................................................................................................................................................................................................................................................. .................................................................................................................................................................................................................................................................................................. ................ .......................................................................................... .......................................................................................................................................................... .......................................................................................................................................................................................... .......... ...................................................................................................................................................................................................................... ............................................... . (4 marks) (Extra space) ............................................................................................... .............................................................................................................. ........................................................................................................................................................ ................................................ ............... (6 marks) (20) G/K43086/Jun09/3144/1H ....................................................................................................................................................................... 1......... .......................................................................................................................... ..................................................................................................................................................... ..

....................................................................................... the UK Current Account deficit rose from £18 billion in 2002 to £51 billion in 2007........................................... In December 2007....................................6 billion (i) Using Item H............................................ ...... the UK Current Account showed the following net trade in goods and services............................................................................ ................................................................................. ...............................................................................................................................................Areas outside the box will not be scanned for marking 21 (Extra space) ......................... For example...................................................................................................................................... ..................... ............................................................................ calculate the UK Current Account balance in December 2007................ Item H During boom times the UK economy tends to have a worsening balance of payments on current account........................................................... ........................................................ ............................................................. ..................................................................................................... Question 4 continues on the next page Turn over 8 (21) G/K43086/Jun09/3144/1H .............................................................9 billion Services 0 –2 –4 Goods –6 –8 4 (c) £7.. .......................... (2 marks) (Extra space) ........................................................................................................................................................................................................................................................................ .................................... £ billion 4 2 £2....................................................................................

........................................................................................... ................................................................................................................................................................................................................................. ........................................................................................................................................................................................................................................................................................................... ...................................... ..................................................................................................................................................Areas outside the box will not be scanned for marking 22 4 (c) (ii) Explain two possible causes of a balance of payments deficit on current account......................... ................................................................................................................ ..................... ................................................................................................................................................................................ ...... (22) G/K43086/Jun09/3144/1H ............................................... .................................................. (4 marks) (Extra space) ........................................................................................... .. ...............................................................................................................................................................................................................................

....... ..................................................................... ................................................................................................ .................................................................................... ................................................................................................................................................................. ................................................................................................................................................................................ ........................................................ .......................................................................................................................................................................................................................................................................................... .................................................................................................................................................................................. ..........Areas outside the box will not be scanned for marking 23 4 (d) Discuss two policies which a government could use to reduce a balance of payments deficit on current account............................................. ......................................................................................................................................................................... (6 marks) (Extra space) ......................................................................... ...................................... ...................................... ......................................................... ............................................. ................................................................................................................................................................................................................................................... .................................................................. ................................................................................................................................................................................................................................................................................ Turn over for the next question Turn over 8 (23) G/K43086/Jun09/3144/1H ____ 30 .................................................................................................................................................................................................................................................................................................................................................................

with Spain being the most popular destination. have increased earnings and made higher profits. Item J The rapid growth of air travel The graph shows the growth in numbers of passengers using UK airports between 1953 and 2005. despite higher oil prices and intense competition. Item I Demand for air travel expected to grow In the last few years budget airlines. Total for this question: 30 marks 5 Study Items I. J and K and then answer all parts of the question which follow. Millions of 250 passengers 200 150 100 50 0 (24) 1953 1962 1971 1980 1989 1998 2005 Years G/K43086/Jun09/3144/1H . The main reasons being: higher incomes more leisure time lower airfares greater choice of destinations more advertising more UK airports.Areas outside the box will not be scanned for marking 24 SECTION B Answer either Question 5 (pages 24 to 27) or Question 6 (pages 28 to 32). such as Ryanair. Most of these passengers were going abroad. Although the world is experiencing recession. the demand for air travel is likely to grow strongly in the future and 500 million passengers are expected at UK airports in 2030.

................................................................ (10 marks) Question 5 continues on the next page Turn over 8 (25) G/K43086/Jun09/3144/1H . ................................................................................................................................................................................................................ aeroplanes account for 2% of global carbon emissions but this is expected to rise to 15% by 2050.............................................. ...................................... ................................................... ............................................................................................................................................................................................................................. ........... 5 (a) Using Items I.............................................................................................................................. They then have to pay more if they exceed that amount........... Carbon emissions from aeroplanes may damage the environment............. Critics of air travel want to see either a tax on passengers or a quota system (pollution permits)................. ................................................................................................... ........................................................................................................................................................................................................................................ .......................................................................................................................................................... Presently.............................................. ............. ........................................... ........................................................................................................................... ...................................................... discuss the costs and benefits of the expansion of air travel...................................................................................................................................................... ........................................................................................................ .................................................. ........................ ................................................................................................................................................................................................................... Supporters of air travel want the airlines to have tax breaks as they earn income for the UK economy and help improve people’s standard of living.................. .... J and K and your knowledge of economics............................. ................................................... .................... ................................................................................................................................................................................................................................................. Pollution permits allow airlines to pollute up to a certain amount........................................... ..................................................................................................................................................................................................... ......................................................Areas outside the box will not be scanned for marking 25 Item K Aeroplanes may cause climate change but ...................................................................

.................................................................................................................................................................... ...................... ........................................................................................................................................................................................................................................................................................................................................................................ ..................................... .................. ................................... ........................ ......................................................Areas outside the box will not be scanned for marking 26 (Extra space) .............................................................................. ................................................................................... .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 5 (b) Discuss whether government intervention is desirable in a competitive air travel market............................................................................ ............................................................................................................................................................................................ ........................................................ .............. ................................ ............................................................................................................................................................................................................................................................................................................................................................................. .......................................................... ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. .......................................... (26) G/K43086/Jun09/3144/1H ................................................................ .......................................................................................... .................................................................................................................................................................................................................................................. . .................................................................................................................... .................................

........................................................Areas outside the box will not be scanned for marking 27 ....................................... .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. ....................................................................... ................................................................................................................................................................................................................................................................................................ ............................................................ . ...................................................................... ................................................................................. ............................................................................ ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................... ................................................................................. ..................................................................................................................................... ...................................................................... .......................................................................................................... ................................................................... (15 marks) Plus Quality of Written Communication for Question 5(b) (5 marks) (Extra space) ...................................................................................................................................................................................................... ................................................................................................................................................................................................... ....................................................... Turn over 8 (27) G/K43086/Jun09/3144/1H ____ 30 ............................................................................................................... ...................... ...... ...... ............................................................................................................................................................................................................ ..................................... ......................................................................................................................................................................................................................... ..............................................................................................................................................................................................................................................................................................................................................

the EU spent 121 billion Euros. The pie chart below shows how this was spent. Some countries were ‘winners’ because they received more from the EU than they paid in taxes to the EU. Item M EU Spending In 2006. Where there is market failure and some regions decline. The EU protects its members by having a tariff on imports from outside the area. On the other hand. such as the Common Agricultural Policy and Regional Policy.Areas outside the box will not be scanned for marking 28 Do not answer this question if you have answered Question 5.5% between countries. Total for this question: 30 marks 6 Study Items L. Spain received 9 billion Euros more than it paid to the EU. as it paid 9 billion Euros more to the EU than it received. M and N and then answer all parts of the question which follow. How the 121 billion Euros was spent Other expenditure Administration Global aid €7 Who are the winners and losers? Losers 5 €bn UK €9 €121 billion 9 €bn Germany €2 4 €bn France €56 €47 Winners 2 €bn Competition and regional development (28) Agriculture including environment and fishing 4 €bn 9 €bn Ireland Greece Spain G/K43086/Jun09/3144/1H . The EU further encourages competition by removing barriers that prevent markets working freely. Germany was a loser. There is labour mobility in the EU because workers can move between member countries in search of jobs. Each member country is subject to certain economic policies. The EU is partly funded by VAT revenues. Item L The EU – how it works The EU is a large trading area which has grown in membership from 15 countries in May 2004 to 27 countries in 2008. with the standard rate varying from 15% to 22. the EU uses its Regional Policy to fund new capital projects such as building a new airport in Cornwall. Businesses can also move into other member countries and this increases competition. For example.

............................................................................................................................................................................................................................................................................................................................................................................................... ....................................................... ........ ........................................................................................................................................................................ .................. ............................................................................................................................................................................................................................. ......................................................................................................................... .......................... Question 6 continues on the next page Turn over 8 (29) G/K43086/Jun09/3144/1H ................................................................................................................. .............................................. ......................................................................... (10 marks) (Extra space) ............................................................................................................................. .................................................................................... ................................. ........................................................................................................................................................................................................................................................................................................................................................................................ ................................................................... ............ ...... ............................................................................................................................................................................. .................................................................................................. ......................................................................................................................................................................................................................... ............................................... ..................................................................................................................................................... ..............................Areas outside the box will not be scanned for marking 29 6 (a) Using Items L and M and your knowledge of economics......................................................................................................................................................................................................... ............................ discuss the costs and benefits of British membership of the EU............ ............................................................................................................ ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

........................................ the single currency of the EU began in January 1999................................................................................................................... .......................................................................................................................................................... ................................................................................................................................. .................................... ....................................................................... ....................... ................... The British Government was concerned about: job losses one common interest rate (set by the European Central Bank rather than the Bank of England) control over the pound (£) sterling...................................................................................... ......................................................................................... ................................................................................... 12 of the 15 countries............................................................................................................................................................................ ....................................................................................................................................................................................................................................... However........ discuss whether or not Britain should adopt the Euro as its currency................................................................................................................................................. .................................Areas outside the box will not be scanned for marking 30 Item N The Euro The Euro........................................................................................... (30) G/K43086/Jun09/3144/1H .................................. .. ........................................................................................... ..... ..................................................................................... some British firms could see benefits to be gained from: no currency exchange costs (transaction costs) all prices being shown in the same currency (transparency) a stable exchange rate................................................................................................................................................................... 6 (b) Using Item N................. belonging to the EU adopted the Euro but Britain decided not to..............................................................

............................................................................................................................................................. ................................................................................................................................................................................................................................................................... ................................................................................................................................................................................. .......................................................................................................................... ................................................................................................................................................................ .................................................................................................................................................................................................................................................................................................................................... (15 marks) Plus Quality of Written Communication for Question 6(b) (5 marks) (Extra space) .... ................................................................... ................................................................................................................................................................................. . ........................................................................................... ...... .................................... ................................................................................................ ............................................................................................................................................................................................................................................... ..................................................................................Areas outside the box will not be scanned for marking 31 ............................. ................................................................................................................................................................................................. .................... .................................................................................................................................................................... ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ Turn over 8 (31) G/K43086/Jun09/3144/1H ............................................................................................................................. ............................................................................................................................... ............................. ...................................................................................................................................................... ....

............................................................................................................................... ................ ................................................ END OF QUESTIONS Copyright © 2009 AQA and its licensors.......................................... All rights reserved...........Areas outside the box will not be scanned for marking 32 ................................................................................................................................................................................................................................................................................................................................................................... ..................... (32) G/K43086/Jun09/3144/1H ____ 30 ............................................................................ ............ ............................................................................................................................................................................................................................................................ ..............................

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