DP Economics
Question 21M.1.HL.TZ1.a
| Date | May 2021 | Marks available | [Maximum mark: 10] | Reference code | 21M.1.HL.TZ1.a |
| Level | HL | Paper | 1 | Time zone | TZ1 |
| Command term | Explain | Question number | a | Adapted from | N/A |
a.
[Maximum mark: 10]
21M.1.HL.TZ1.a
Explain two causes of demand-pull inflation.
[10]
Markscheme
Marks should be allocated according to the paper 1 markbands for May 2013 forward, part A.
Answers may include:
- definition of inflation, demand-pull inflation
- diagram showing rising average price level due to an increase in AD
- explanation that AD may increase because of a change in any of the determinants affecting component(s) of AD
- examples of economies that have experienced demand-pull inflation.
Examiners report
Many students did not make it clear that they understand that the inflation is a process and not a one-off increase in the average price level. Another common weakness was using the new classical AD/AS diagrams that shows an economy that recovers from recession (closes a deflationary gap) to illustrate demand-pull inflation.
