DP Economics
Question 21N.1.HL.TZ0.a
| Date | November 2021 | Marks available | [Maximum mark: 10] | Reference code | 21N.1.HL.TZ0.a |
| Level | HL | Paper | 1 | Time zone | TZ0 |
| Command term | Explain | Question number | a | Adapted from | N/A |
a.
[Maximum mark: 10]
21N.1.HL.TZ0.a
Explain how rising commodity prices and wages might lead to cost-push inflation.
[10]
Markscheme
Marks should be allocated according to the paper 1 markbands for May 2013 forward, part A.
Answers may include:
- definitions of inflation, cost-push inflation, (primary) commodity
- AD/AS diagram showing a shift of the short-run aggregate supply curve to the left and higher average price level
- an explanation of how cost-push inflation is caused by the increase in the costs of production due to the rising commodity prices and wages
- examples of countries where cost-push inflation has taken place.
NB A maximum of [6] should be awarded if a candidate has only explained the effect of rising commodity prices OR rising wages.
Examiners report
Most candidates were able to draw an AD/AS model and explain that cost-push inflation is caused by an increase in the cost of production but their answers would be improved if they could further support their explanations by an appropriate historical example.
