Question 22M.3.HL.TZ0.a.vii
| Date | May 2022 | Marks available | [Maximum mark: 2] | Reference code | 22M.3.HL.TZ0.a.vii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Sketch | Question number | a.vii | Adapted from | N/A |
Sketch an AD/AS diagram to illustrate the possible effect on the Burundian economy in the long run if the government reduces the rate of corporate income tax from 30 % to 26 %.
[2]
For AD/AS, the vertical axis may be Average (General) Price Level, or Price Level. The horizontal axis may be real output, real national output, real income, real national income, real GDP or real Y. Any abbreviation of the previous terms is acceptable. A title is not necessary.
N.B. A Keynesian diagram with AS shifting to the right and showing a higher (full employment/potential) output level is also acceptable.
A diagram which is not fully labelled may be awarded a maximum of [1].
This question was answered poorly. The question required candidates to recognize that such a market-orientated supply-side policy would shift the LRAS (or the Keynesian AS) curve to the right. However, many candidates shifted the AD curve and/or the SRAS curve.
