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Date May 2018 Marks available 10 Reference code 18M.1.HL.TZ1.3
Level Higher level Paper Paper 1 Time zone Time zone 1
Command term Explain Question number 3 Adapted from N/A

Question

Explain the possible impact of an increase in wealth and consumer confidence on aggregate demand.

[10]
a.

Examine why, in contrast to the monetarist/new classical model, the economy will not automatically return to the full employment level of output in the Keynesian model.

[15]
b.

Markscheme

Answers may include:

Marks should be allocated according to the Paper 1 markbands for May 2013 forward, part A.

a.

Answers may include:

Evaluation may include: the importance of the type of unemployment, the degree to which both models represent extreme theoretical ends of a spectrum, the degree to which reality deviates from the models, the difficulty of establishing what is full employment, policy implications.

Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.

Opinions or conclusions should be presented clearly and should be supported by appropriate examples.

Marks should be allocated according to the Paper 1 markbands for May 2013 forward, part B.

b.

Examiners report

[N/A]
a.
[N/A]
b.

Syllabus sections

Last exams 2021 » Section 2: Macroeconomics » 2.2 Aggregate demand and aggregate supply » Aggregate demand (AD) » The determinants of AD or causes of shifts in the AD curve
Last exams 2021 » Section 2: Macroeconomics » 2.2 Aggregate demand and aggregate supply » Aggregate demand (AD)
First exams 2022 » Unit 3: Macroeconomics » 3.2 Variations in economic activity—aggregate demand and aggregate supply » 3.2.3 Determinants of AD components
Last exams 2021 » Section 2: Macroeconomics » 2.2 Aggregate demand and aggregate supply
First exams 2022 » Unit 3: Macroeconomics » 3.2 Variations in economic activity—aggregate demand and aggregate supply
Last exams 2021 » Section 2: Macroeconomics
First exams 2022 » Unit 3: Macroeconomics
First exams 2022
Last exams 2021

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