DP Economics
Question 23M.1.SL.TZ1.2a
| Date | May 2023 | Marks available | [Maximum mark: 10] | Reference code | 23M.1.SL.TZ1.2a |
| Level | SL | Paper | 1 | Time zone | TZ1 |
| Command term | Explain | Question number | a | Adapted from | N/A |
a.
[Maximum mark: 10]
23M.1.SL.TZ1.2a
(a)
Explain two costs of deflation.
[10]
Markscheme
Refer to Paper 1 markbands for May 2022 forward, available under the "My tests" tab > supplemental materials.
Answers may include:
- Terminology: deflation.
- Explanation: of any two costs of deflation such as uncertainty, redistributive effects, deferred consumption, association with high levels of cyclical unemployment, risk of bankruptcies, negative economic growth/recession, an increase in the real value of debt, inefficient resource allocation and policy ineffectiveness.
- Diagram: use of an AD/AS diagram showing AD shifting to the left or AS shifting to the right.
A maximum of [6] should be awarded if only one cost is considered.
Assessment Criteria
Part (a) 10 marks
Examiners report
This was the least popular question and one which presented difficulties for many candidates. Many explained the causes of deflation, rather than the costs. Those who did explain costs did not present a clear explanation of two distinct costs. The responses often contained mention of several costs, but none were explained in any detail and were often all part of the same cost. Disinflation was often confused with deflation. There was usually a decent diagram for deflation.
