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Question SPM.1.HL.TZ0.b

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Date May specimen first teaching 2021 Marks available [Maximum mark: 15] Reference code SPM.1.HL.TZ0.b
Level HL Paper 1 Time zone TZ0
Command term Evaluate Question number b Adapted from N/A
b.
[Maximum mark: 15]
SPM.1.HL.TZ0.b

Using real-world examples, evaluate the effectiveness of monetary policy to achieve low unemployment.

[15]

Markscheme

Answers may include:

  • Definition: monetary policy, low unemployment.
  • Explanation: of the impacts that might occur on the economy as a result of its use on employment, growth, inflation and trade.
  • Diagram: AD/AS diagram.
  • Synthesis (evaluate): strengths and limitations of monetary policy in achieving low unemployment. Monetary policy is incremental, easily changed, flexible, fast to implement, does not burden the government’s budget; it is less effective with close to zero interest rates, and ineffective when business/consumer confidence is low; effectiveness may depend on the type of unemployment.
  • Examples: real-world examples where governments have attempted to lower unemployment using monetary policy.

N.B. It should be noted that definitions, theory and examples that have already been given in part (a), and then referred to in part (b), should be rewarded

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