Question 22M.1.SL.TZ0.a
| Date | May 2022 | Marks available | [Maximum mark: 10] | Reference code | 22M.1.SL.TZ0.a |
| Level | SL | Paper | 1 | Time zone | TZ0 |
| Command term | Explain | Question number | a | Adapted from | N/A |
Explain how the use of supply-side policies might encourage greater domestic competition and improve the international competitiveness of a country.
[10]
Marks should be allocated according to the paper 1 markbands for May 2022 forward, part A.
Answers may include:
- Terminology: supply-side policies, international competitiveness, competition
- Explanation: of how the use of market-based supply-side policies such as privatization, deregulation, trade liberalization and anti-monopoly legislation and interventionist supply-side policies such as government spending on education and training, R&D and infrastructure might encourage greater competition; an explanation that international competitiveness may be improved as a result of the LRAS increasing and lowering the rate of inflation/the price level, hence making exports relatively cheaper
- Diagram: an AD/AS diagram showing a rightward shift of LRAS.
A maximum of [6] should be awarded if only one of the two goals in the question item is addressed.
This question had many good answers, with the best responses looking at how interventionist supply-side policies, such as subsidies and grants to support research and development, along with education and training, could increase competition within domestic markets and make a country more internationally competitive. Some candidates approached this question from a market-based supply-side approach and looked at policy options like tax cuts, deregulation and privatization. It was important for students to focus their chosen supply-side policies on greater domestic competition and international competitiveness and the best answers did this effectively.
