2025 EJC Paper 1

[Turn over EUNOIA JUNIOR COLLEGE JC2 Preliminary Examination 2025 General Certificate of Education Advanced Level Higher 2 ECONOMICS Paper 1 9570/01 28 August 2025 2 hours 30 minutes Additional Materials: Answer Booklet READ THESE INSTRUCTIONS FIRST An answer booklet will be provided with this question paper. You should follow the instructions on the front cover of the answer booklet. If you need additional answer paper, ask the invigilator for a continuation booklet. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 7 printed pages and 1 blank page.

2 9570/01 [Turn over Question 1: Artificial intelligence (AI) and data centers Figure 1: Total electricity consumption in the United States (US) from 2018 to 2030 Source: statista.com, accessed 1 July 2025 Extract 1: AI is pushing data center energy demands through the roof The rapid rise of artificial intelligence (AI), catalyzed by OpenAI’s ChatGPT launch in November 2022, has transformed the digital landscape, driving an unprecedented surge in electricity consumption by US data centers. The primary driver is the proliferat ion of AI workloads, particularly generative AI models, which rely on energy -intensive graphics processing units (GPUs) that consume up to 10 times more power than traditional servers. The International Energy Agency (IEA) projects that US data center electricity demand could triple to 606 terawatt-hours (TWh) by 2030, equivalent to the annual power needs of 56 million households. This growth is fueled by the expansion of hyperscale data centers operated by tech giants like Google, Microsoft, and Amazon, which are investing heavily in AI infrastructure. As a result, electricity prices across the US rose by 4.5% in 2023. Supply constraints, such as limited grid capacity and long lead times for new power infrastructure, have also intensified electricity price increases. This increase in electricity prices does not only have cost implications for operators of data centers; it also impacts the households. Households across the country are now grappling with noticeably higher electricity bills. Some families are beginning to reduce their electricity usage, such as limiting the use of high-energy appliances by delaying laundry cycles or turning to LED lighting that is more energy efficient. Other families may need to adjust their overall consumption patterns , so that they can pay for the higher electricity bills yet keep to their budget. Source: Adapted from Forbes, 31 May 2024 Extract 2: First time that AI has been blamed for layoffs The advent of artificial intelligence (AI) has significantly disrupted the US labor market, with automation increasingly replacing human workers in various sectors. In May 2023, the U S Labor

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