AQA AS Economics Paper 2; 2024 MCQs

What does labour productivity measure?

• The number of workers employed in a firm

• The total value of output in the economy

• Output per worker or per hour worked

• The total cost of labour per unit of output

Which of the following would most likely lead to an increase in labour productivity?

• A) A rise in interest rates

• B) Increased investment in worker training and education

• C) Higher levels of taxation on incomes

• D) A fall in exports

Which is the best definition of productivity?

• The number of goods produced in an economy

• The total income received by households

• Output per unit of input

• The level of inflation in an economy

Capital productivity is defined as:

• Total output divided by the number of workers

• Output produced per unit of capital input

• Capital employed divided by output

• The number of machines in use in the economy

Why is productivity important for economic growth?

• It reduces the need for exports

• It allows workers to take more holidays

• Higher productivity leads to greater output with the same resources

• It increases the inflation rate

What does the Consumer Prices Index (CPI) measure?

• The level of wages in the economy

• The average change in prices of a basket of goods and services over time

• The total value of goods produced in an economy

• The interest rate set by the Bank of England

How often is the CPI basket of goods and services reviewed in the UK?

• Every five years

• Every month

• Every year

• Every quarter

Why is the CPI considered a weighted index?

• It includes both goods and services

• It only measures durable goods

• It is based on GDP growth

• It gives greater importance to items that consumers spend more on

Which of the following is a limitation of using CPI as a measure of inflation?

• It includes housing costs

• It may not reflect the spending patterns of all households

• It uses nominal rather than real values

• It only measures business investment

Which of the following would cause the CPI to rise?

• A decrease in VAT

• An increase in the cost of imported goods

• A fall in interest rates

• An increase in productivity