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OCR GCSE
ECONOMICS
2O25 OCR GCSE Economics J205/
Introduction to Economics
Question paper with Marking scheme
attached
INSTRUCTIONS
- Use black ink. You can use an HB pencil,
but only for graphs and diagrams.
- Write your answer to each question in
the space provided. If you need extra space use
the lined pages at the end of this booklet. The
question numbers must be clearly shown.
- Answer all the questions.
INFORMATION
- The total mark for this paper is 80.
- The marks for each question are shown
in brackets [ ].
- Quality of extended response will be
assessed in questions marked with an asterisk
Oxford Cambridge and RSA
Thursday 22 May 2025 – Afternoon
GCSE (9–1) Economics
J205/02 National and International Economics
Time allowed: 1 hour 30 minutes
You can use:
- a scientific or graphical calculator
- an HB pencil
Please write clearly in black ink. Do not write in the barcodes.
Centre number
First name(s)
Last name
Candidate number
INSTRUCTIONS
- Use black ink. You can use an HB pencil, but only for graphs and diagrams.
- Write your answer to each question in the space provided. If you need extra space use the lined
pages at the end of this booklet. The question numbers must be clearly shown.
- Answer all the questions.
INFORMATION
- The total mark for this paper is 80.
- The marks for each question are shown in brackets [ ].
- Quality of extended response will be assessed in questions marked with an asterisk (*).
- This document has 24 pages.
ADVICE
- Read each question carefully before you start your answer.
© OCR 2025 [603/0143/0] OCR is an exempt Charity
DC (DE/CT) 345085/2 Turn over
4 How might an increase in interest rates affect the economy? A
Decrease unemployment
B Improve price stability
C Increase economic growth
D Increase inflation
Your answer [1]
5 A consumer is planning a holiday.
They found a villa that cost €3480 when the exchange rate was £1 = €1.20.
By the time they booked the villa the exchange rate had changed to £1 = €1.16. What
happened to the Sterling price of the villa for the consumer?
A Decreased by £
B Decreased by £139.20 C
Increased by £
D Remained unchanged
Your answer [1]
6 What is the most likely cost of globalisation for consumers in developed countries? A
Dominant global brands
B Higher prices
C Increased immigration D
Lower prices
Your answer [1]
Turn over
7 The UK government sets an inflation target.
What might happen if inflation is above this target?
Interest rates will:
A decrease to discourage saving
B decrease to encourage more investment C
increase to discourage consumer spending
D increase to encourage more borrowing
Your answer [1]
8 What is not a purpose of government spending?
A To ensure everyone has access to health services B To
increase the welfare of the population
C To maintain a balanced current account
D To reduce inequality in the distribution of income
Your answer [1]
9 An individual’s only source of income has risen in nominal value but fallen in real value. As a
result, the individual will
A be unable to buy all the same products B
decide to save more of their income C have
less money to spend
D not have to pay as much direct tax
Your answer [1]
13 The diagram shows the supply and demand for Sterling (£) when priced in US dollars ($).
Price of Sterling
in US Dollars ($)
S
p
S
p
D
q 2
q 1 Quantity of Sterling
What might cause the Sterling to US Dollar exchange rate to increase from p
to p
A Incomes of US consumers increase
B Less imports are bought from the US
C The UK becomes more attractive for foreign investment
D UK goods become more desirable to US consumers
Your answer [1]
14 How can fiscal policy be used to achieve economic growth?
A A decrease in government spending to achieve a budget surplus B An
increase in interest rates will encourage households to save C Improved
education standards will increase the supply of labour D Lower levels of
taxation will encourage more household spending
Your answer [1]
15 An increase in a country’s level of international trade will most likely benefit producers because A
better quality finished goods will be available
B prices will be lower due to increased competition
C there will be a greater choice of goods and services
D there will be a larger market for buying inputs
Your answer [1]
16 What is a definition of price stability?
A A sustained rise in the general price level B GDP
per capita increases gradually
C Inflation remains constant
D Prices increase at an acceptable low rate
Your answer [1]
17 A country is seeking economic growth by investing in renewable wind energy.
This has led to an increase in energy prices and more noise for households living close to the wind
farms.
How will this affect the sustainability of these households?
Economic Social Environmental
sustainability sustainability sustainability
A Decrease Decrease Increase
B Decrease Increase Increase
C Decrease Increase Decrease
D Increase Decrease Increase
Your answer [1]
18 VAT on most food products is 20%. VAT on fresh fruit is 8%.
A household spends £400 on food products and £50 on fresh fruit.
What is the total household spend once VAT is added?
A £
B £
C £
D £
Your answer
[1]
Turn over
BLANK PAGE
DO NOT WRITE ON THIS PAGE
Section B starts on the next page
Turn over
Section B
21 Extract 1
Externalities and Government Policies
Carbon dioxide (CO
2
) emissions, which arise from the use of petrol, cause climate change. The
emissions have a harmful effect on those who are not using cars, which is a negative externality that
impacts a third party.
An indirect tax on petrol should reduce the use of petrol and its emissions. However, when demand
for a good is price inelastic, the change in quantity due to a tax or subsidy is less than when demand is
price elastic.
UK 11
Denmark 10
CO
emissions
6
(metric tons per
capita)
Year
The UK government provides a subsidy for the public provision of vaccines. Until measles vaccinations
began in 1968, there were around 500,000 cases of measles every year and many deaths.
The UK’s vaccination coverage rate for measles has grown from 81% in 2004 to over 91% in 2023.
There have been almost no deaths, therefore, from measles since 2013.
(a) Using Extract 1 , explain which country’s CO 2
emissions fell most between 2000 and 2020.
..................................................................................................................................................... [2]
(d)
(i) State two goods or services with positive externalities, other than vaccinations.
[2]
(ii) Explain why governments often give subsidies for the public provision of vaccinations.
..................................................................................................................................................... [2]
(iii)* Evaluate the benefits of a government policy to subsidise vaccinations.
Use the information given in Extract 1 and your own knowledge.
..................................................................................................................................................... [6]
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(b) Using Extract 2 , state the differences in the trends in the trade in goods and in the trade in
services between 2012 and 2022.
..................................................................................................................................................... [2]
(c) Using Extract 2 , analyse how changes in the UK economy have led to an increasing current account
deficit.
..................................................................................................................................................... [6]
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(d)
(i) State two kinds of services that the UK exports.
[2]
(ii) Explain one reason why there is significant investment from overseas into the UK.
..................................................................................................................................................... [2]
23 Extract 3
Development in Tanzania and Globalisation
GDP per capita (US$) 539 552 794
Government expenditure on education (% of GDP) 2.14 3.00 4.
Primary school enrolment (% of age group) 52.04 53.53 92.
The above table shows that government spending on Tanzanian schools and teachers affects the number
of children attending school. As a result, the adult literacy rate (the percentage of adults who can read
and write) has increased from 68% in 2010 to 82% in 2021. The benefits of an educated population,
which leads to a more productive workforce, is also demonstrated by the increase in GDP per capita.
Higher GDP per capita is not only due to education, but also to globalisation. Investment by Chinese
multinational companies in Tanzanian industries has helped to increase and diversify its trade. The
Tanzanian economy is now less dependent on the widely fluctuating prices of primary agricultural
products. Moreover, there is a greater variety of job opportunities.
GDP per capita (US$) 794 929 1 028
Exports of goods (US$ million) 4 051 4 834 6 061
E.g. Agricultural raw material exports (% of total) 5.59 3.37 3.
Imports of goods (US$ million) 8 060 14 768 8 517
E.g. Manufactured imports (% of total) 60.47 42.07 72.
(a) Using Extract 3 , calculate the average GDP per capita in US dollars during the period 1990 to 2010.
Show your working.
Answer .......................................................... [2]
(b) Using Extract 3 , explain two measurements of education for economic development.
[2]
(c) Using the information in Extract 3 , analyse how an increase in the number of children attending
primary school affects the GDP of a country.
..................................................................................................................................................... [6]
Turn over
