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Question 19M.1.HL.TZ2.3a

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Date May 2019 Marks available [Maximum mark: 10] Reference code 19M.1.HL.TZ2.3a
Level HL Paper 1 Time zone TZ2
Command term Explain Question number a Adapted from N/A
a.
[Maximum mark: 10]
19M.1.HL.TZ2.3a
(a)

Explain how an increase in unemployment might lead to a loss of gross domestic product (GDP) and a budget deficit.

[10]

Markscheme

Marks should be allocated according to the paper 1 markbands for May 2013 forward, part A.

Answers may include:

  • definition of unemployment, GDP, budget deficit
  • diagram to show aggregate demand (AD) and/or aggregate supply (AS) shifting to the left
  • explanation of how higher unemployment might lead to a loss of GDP and a budget deficit, via the loss of tax revenue and increase in government spending
  • examples of instances where rising unemployment has caused a loss of GDP and/or a budget deficit.
Examiners report

Although there were many very good responses to this question there was a significant minority who confused a budget deficit with a trade deficit. However, good responses were able to produce very precise and well explained argumentsin which the links were clearly explained. Good real-life examples were also used by higher achieving responses here.

Syllabus sections