Economics 9708 · AS & A Level · National income statistics

National income statistics — practice question

(a)[3]

Which evidence in the data shows that the economic situation in the US improved after December 2008?

(b)[5]

How far is there a regular link in the data between

  • shifts in personal income and consumer spending [2]
  • movements in overall prices and consumer spending? [3]
(c)[4]

Explain why a fall in spending might be expected to cause a fall in business investment.

(d)[8]

Do you agree that a rise in savings is usually ‘beneficial, but not when everyone does it at once’ (line 5)?

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: Spending rose in Jan and Feb, showing improvement; this may be linked to the fact that price changes were no longer negative; income was also higher in Jan, but lower again in Feb; so there was some improvement.

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