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    PracticeAQA GCSEAQA GCSE Economics Paper 2Question 21
    Hard9 marksExtended Response
    How the economy worksEconomic GrowthGovernment ObjectivesMacroeconomicsEvaluation

    AQA GCSE · Question 21 · How the economy works

    Figure 2
    Aiming for a steady rate of economic growth is an important economic objective of the UK government. The average rate of economic growth has gradually fallen in the UK. In the 1980s, the average economic growth was 2.7% per year. In the 1990s, average economic growth fell to 2.3% per year. Since 2000, UK average economic growth up until the pandemic of 2020-2021 was 1.8%.

    The figure shows a bar chart titled 'UK economic growth, 2000-2019'. The y-axis shows '% change in real GDP per year' from -5 to 4. The x-axis shows the years from 2000 to 2019. Most years show positive growth between 1% and 3%. There is a significant dip in 2009, showing negative growth of around -4%.

    Governments aim for economic growth because it generates benefits for both the government and the rest of the population. Clearly, economic growth means more is being produced in an economy, which normally means that incomes will be rising - though this may not be shared out evenly. However, there are some problems created by economic growth. If economic growth is too high, then trade-offs with other objectives are more likely to occur.

    Using Figure 2, assess whether the government is right to always aim for economic growth as an objective for the economy.

    How to approach this question

    1. Structure your answer with an introduction, arguments for, arguments against, and a conclusion. 2. **For:** Explain the benefits of economic growth, using information from the text (e.g., benefits for government and population, rising incomes). Link this to the data in Figure 2, noting that positive growth is the norm and negative growth (2009) is associated with recessions. 3. **Against:** Explain the problems or trade-offs of pursuing economic growth, as mentioned in the text. Discuss potential conflicts with other objectives, such as low inflation, environmental sustainability, and income equality. 4. **Assess/Conclude:** Come to a justified conclusion. Is the government right to 'always' aim for growth? Weigh up the arguments and suggest that while growth is important, it should be sustainable and balanced with other objectives.

    Full Answer

    This question requires an evaluation of economic growth as a government objective. A good answer will present a two-sided argument. **Arguments for pursuing economic growth:** - Increased incomes and living standards. - Lower unemployment. - Higher profits for firms, leading to more investment. - Increased tax revenue for the government to spend on public services. - Can help reduce poverty. **Arguments against 'always' pursuing economic growth:** - **Inflation:** Rapid growth can cause demand-pull inflation. - **Environmental costs:** Growth can lead to pollution, resource depletion, and other negative externalities. - **Inequality:** The benefits of growth may not be distributed evenly, widening the gap between rich and poor. - **Current account deficit:** High growth can lead to increased demand for imports, worsening the trade balance. Your conclusion should weigh these points. Most economists agree that sustainable, stable economic growth is desirable, but a relentless pursuit of high growth at any cost can be damaging. Therefore, the government is right to aim for growth, but not 'always' and not without considering the consequences.

    Common mistakes

    Only presenting one side of the argument (e.g., only listing the benefits of growth). Not using the information from the text and the chart. Failing to provide a justified conclusion that answers the 'assess' part of the question.
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