Question 23M.1.SL.TZ2.a
| Date | May 2023 | Marks available | [Maximum mark: 10] | Reference code | 23M.1.SL.TZ2.a |
| Level | SL | Paper | 1 | Time zone | TZ2 |
| Command term | Explain | Question number | a | Adapted from | N/A |
Explain two reasons why a high level of government indebtedness can act as a barrier to economic growth.
[10]
Refer to Paper 1 markbands for May 2022 forward, available under the "My tests" tab > supplemental materials.
Answers may include:
- Terminology: indebtedness, economic growth.
- Explanation: of any two reasons that government indebtedness could act as barrier to economic growth, such as the opportunity cost to governments of debt repayments and interest costs; the problem of a debt trap and the ability to repay debt; the need to increase taxes and reduce government spending.
- Diagram: any relevant diagram such as an AD/AS diagram to illustrate economic growth/lack of economic growth or a PPC diagram to illustrate opportunity cost.
A maximum of [6] should be awarded if only one reason is considered.
Assessment CriteriaPart (a) 10 marks
Relatively few students chose to do this question and those that did found it challenging. The main difficulty for candidates was clearly explaining what government indebtedness means and then linking this to economic growth. There were, however, some good answers to this question that explained how the interest and repayment costs to a government which has high levels of borrowing can act as a barrier to economic growth because taxes might have to increase and government expenditure decreased. The best answers illustrated this with an aggregate demand and supply diagram.
