Question 21N.3.HL.TZ0.b
| Date | November 2021 | Marks available | [Maximum mark: 3] | Reference code | 21N.3.HL.TZ0.b |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Calculate | Question number | b | Adapted from | N/A |
The data in Table 2 refer to Kanyaland, a small, open, developing economy in 2019. All data are in billions of Kanyaland dollars (K$).
Table 2
Assume that the level of GDP in Kanyaland in 2009 was K$455 billion and government expenditures were K$205 billion. For each additional Kanyaland dollar earned as income, it had been estimated that K$0.60 was spent on domestic goods and services, K$0.10 was saved, K$0.21 was paid in taxes and K$0.09 was spent on imported goods and services.
If the government increased expenditures by K$21 billion, calculate the new level of GDP achieved.
[3]
multiplier =
Identification of the value of the multiplier = 2.5 is sufficient for [1].
= 2.5 × 21 = 52.5
Any valid working is sufficient for [1].
= 455 + 52.5
= $507.5 billion
An answer of $507.5 without any valid working is sufficient for [1].
OFR applies if the multiplier is calculated incorrectly and the resulting incorrect number is applied correctly to calculate the new level of GDP.
This part was done quite poorly. Lower-achieving responses appeared confused by the wordy nature of the question and hence were not able to calculate the multiplier. A significant number were able to benefit from the Own Figure Rule although many incorrectly multiplied both the initial and the increase in government spending by the multiplier.
