DP Economics
Question 19N.1.HL.TZ0.4a
| Date | November 2019 | Marks available | [Maximum mark: 10] | Reference code | 19N.1.HL.TZ0.4a |
| Level | HL | Paper | 1 | Time zone | TZ0 |
| Command term | Explain | Question number | a | Adapted from | N/A |
a.
[Maximum mark: 10]
19N.1.HL.TZ0.4a
(a)
Explain the effect an increase in investment might have on real gross domestic product (GDP) using the Keynesian multiplier.
[10]
Markscheme
Marks should be allocated according to the paper 1 markbands for May 2013 forward, part A.
Answers may include:
- definitions of real GDP, investment, Keynesian multiplier
- Keynesian AD/AS diagram to show the multiplier effect (successive increases in AD and real GDP)
- explanation of how an initial increase in investment, a component of AD, leads to multiple successive increases in AD and real GDP
- hypothetical numerical example(s) to support the explanation or a historical example of specific situations where an increase in investment has possibly led to a multiplier effect.
Award a maximum of level 2 marks if a candidate does not use the concept of the Keynesian multiplier.
