Actual 2025/2026 AQA A-level ECONOMICS 7136/2 Paper 2 Merged Question Paper + Mark Scheme

Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
Productivity and living standards
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A: Indicators of economic performance and living standards, selected nations, 2021
Productivity
(GDP per
hour worked,
US $)
Productivity
change
2010–2021
(%)
Life
expectancy
at birth
(years)
Gini
coefficient
Expected
years of
schooling
(years)
CO2
emissions
per capita
(tonnes)
Estonia 42.9 +28.8 77.1 0.308 15.9 7.9
Hungary 39.9 +16.7 74.5 0.300 15.0 5.0
UK 59.1 +3.5 80.7 0.351 17.3 4.9
Source: OECD & WHO, 2022
Extract B: The UK’s productivity puzzle
The economist Paul Krugman once wrote that “Productivity isn’t everything, but, in the long-run,
it is almost everything”. Productivity is a key determinant of living standards because it affects
the amount of goods and services that can be produced, and therefore consumed, from the
resources that are available. Historically, productivity has increased over time, which has
contributed to real wage rises and improved living standards. Although productivity can be
measured in several different ways, one common way is GDP per hour worked.
When economies move through their economic cycles, it is not unusual for productivity to fall
during downturns, as happened in 2008–2009. However, the persistently low rate of growth of
productivity that the UK has experienced since 2010 is unusual. Productivity growth in other
nations, including Estonia and Hungary, has been much higher. The UK’s low rate of
productivity growth is often referred to as ‘The UK’s productivity puzzle’. If the pre-2007 trend in
productivity growth had continued, UK productivity would now be over 30% higher than it is
today.
Many economists have tried to provide reasons for the productivity puzzle. Among the
suggestions are low levels of investment and the impact of the financial crisis on banks’
willingness to lend to new businesses. More people working beyond normal retirement age has
led to an older workforce and may have affected productivity. These factors may be relevant but
they do not provide a complete explanation for the weakness in UK productivity growth.
So, what can be done to raise productivity? Investing in human capital to improve people’s skills
and supporting improvements in technology should help. Creating a stable economy and
effective use of the tax and benefits system are also key factors in driving productivity growth.