Extract C
Japan is currently experiencing a profound demographic shift, with its working-age population projected to decline significantly over the next few decades. To sustain economic growth, Japan has aggressively pursued automation, artificial intelligence, and robotics across key sectors such as manufacturing, healthcare, and eldercare. Proponents argue that rapid technological adoption boosts labor productivity, offsets labor shortages, and shifts the economy towards higher-value activities, lifting long-run potential growth. However, critics point out that the high capital expenditure required may lead to technological unemployment in certain sectors, increase income inequality, and introduce volatility into the economic cycle as firms adjust their capital investment plans.
Using the data in Extract C and your economic knowledge, discuss the ways in which rapid automation and technological adoption affect the economic growth and economic cycle of the Japanese economy.
327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.