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Question 23M.1.SL.TZ1.b

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Date May 2023 Marks available [Maximum mark: 15] Reference code 23M.1.SL.TZ1.b
Level SL Paper 1 Time zone TZ1
Command term Discuss Question number b Adapted from N/A
b.
[Maximum mark: 15]
23M.1.SL.TZ1.b

Using real-world examples, discuss the view that high inflation is a more significant problem than high unemployment.

[15]

Markscheme

Refer to Paper 1 markbands for May 2022 forward, available under the "My tests" tab > supplemental materials.

Answers may include:

  • Terminology: inflation, unemployment.
  • Explanation: explanation of the view in terms of the various costs of inflation such as uncertainty, redistributive effects, effects on saving, damage to export competitiveness, impact on economic growth, inefficient resource allocation.
  • Diagram: AD/AS diagram(s) showing inflation and/or demand-deficient unemployment, and/or a demand for and supply of labour diagram to show structural unemployment.
  • Synthesis (discuss): a challenge to the view in terms of the various costs of unemployment such as the various economic, social and personal costs; the importance of the types of inflation and unemployment occurring, the duration and rates of inflation and unemployment, the relative difficulty of implementing policies to address inflation and unemployment; consideration of “more significant” and the possibility that they are both equally serious.
  • Examples: real-world examples of the impact of high rates of inflation and unemployment.

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.

Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.

Assessment Criteria

Part (b) 15 marks

 

Examiners report

This question was challenging for many of the candidates. Most were unable to produce a response that compared the costs of inflation with the costs of unemployment which would have been the easiest and most logical approach to this question. Many candidates focused on the policies used to tackle inflation and unemployment without using this discussion to answer the question.

Syllabus sections