Assessment map
Unit 3.2: Aggregate demand and supply
This page provides a map of the various assessments included in the unit, including short answers responses, essays and areas for discussion. I have included a section A and section B blank essay template which will help your classes prepare their paper one essay responses.
| Syllabus area: Aggregate demand | Assessment |
| Distinguish between the microeconomic concept of demand for a product and the macroeconomic concept of aggregate demand. | Activity 1,2 on page: Aggregate demand and supply (short answer questions and drawing the AD curve exercise) |
Construct an aggregate demand curve, and explain why the AD curve has a negative slope. | Activity 1,2 on page: Aggregate demand and supply (short answer questions and drawing the AD curve exercise) |
| Describe consumption, investment, government spending and net exports as the components of aggregate demand. | Short answer activities on page: Aggregate demand and supply |
| Explain how the AD curve can be shifted by changes in consumption due to factors including changes in consumer confidence, interest rates, wealth, personal income taxes (and hence disposable income) and level of household indebtedness. | Activity 1 on page: Aggregate demand and supply (short answer questions) Activity 8, TOK exercise on the impact of wealth and the perception of wealth on consumption (same page) |
| Explain how the AD curve can be shifted by changes in government spending due to factors including political and economic priorities. | Activity 2 and 3 on page: Aggregate demand and supply (short answer questions and drawing the AD curve exercise) |
| Explain how the AD curve can be shifted by changes in investment due to factors including interest rates, business confidence, technology, business taxes and the level of corporate indebtedness. | Activity 4 and 5 on page: Aggregate demand and supply (short answer questions and drawing the AD curve exercise) Paper one exercise on page: Components of aggregate demand |
| Explain how the AD curve can be shifted by changes in net exports due to factors including the income of trading partners, exchange rates and changes in the level of protectionism. | Activity 6 and 7 on page: Aggregate demand and supply (short answer questions and drawing the AD curve exercise) |
| Syllabus area: Aggregate supply | Assessment |
| Define the term aggregate supply. Explain, using a diagram, why the short-run aggregate supply curve (SRAS curve) is upward sloping. | Activity 3,4 on page: Aggregate demand and supply (short answer questions and drawing the SRAS curve exercise) |
| Explain, using a diagram, how the AS curve in the short run (SRAS) can shift due to factors including changes in resource prices, changes in business taxes and subsidies and supply shocks. | Activity 3,4 on page: Aggregate demand and supply (short answer questions and drawing the SRAS curve exercise) |
| Explain, using a diagram, that the monetarist / new classical model of the long run aggregate supply curve (LRAS) is vertical at the level of potential output (full employment output) because aggregate supply in the long run is independent of the price level. | Activities 1 - 3 on page: Equilibrium in macroeconomics (neo-classical perspective) (short answer questions and drawing the SRAS curve exercise) |
| Explain, using a diagram, that the Keynesian model of the aggregate supply curve has three sections because of “wage/price” downward inflexibility and different levels of spare capacity in the economy. | Activities 1 and 3 (short answer questions and drawing the SRAS curve exercise) plus Activity 10, paper one style examination question on page: Equilibrium in macroeconomics (keynesian perspective) |
| Compare and contrast, using the two models above, the ways that factors leading to changes in the quantity and/or quality of factors of production (including improvements in efficiency, new technology, reductions in unemployment, and institutional changes) can shift the aggregate supply curve over the long term. | Activities 1 and 3 (short answer questions and drawing the SRAS curve exercise) plus Activity 10, paper one style examination question on page: Equilibrium in macroeconomics (keynesian perspective) |
| Syllabus area: Short run equilibrium | Assessment |
| Explain, using a diagram, the determination of short-run equilibrium, using the SRAS curve. | Activity 4 and 5 on page: Aggregate demand and supply (short answer questions on the factors which shift the AD / SRAS curve exercise) |
| Examine, using diagrams, the impacts of changes in short run equilibrium. | Activity 4 and 5 on page: Aggregate demand and supply (short answer questions on the factors which shift the AD / SRAS curve exercise) |
| Syllabus area: Long run equilibrium (monetarist / new classical model) | Assessment |
| Explain, using a diagram, the determination of long-run equilibrium, according to the monetarist / new classical model, indicating that long-run equilibrium occurs at the full employment level of output. | Short answer and drawing the LRAS curves activities 1 - 5 on: Equilibrium in macroeconomics (neo-classical perspective) Paper one style practise question on page: Equilibrium in macroeconomics (neo-classical perspective) |
| Examine why, in the monetarist / new classical approach, while there may be short-term fluctuations in output, the economy will always return to the full employment level of output in the long run. | Short response and drawing the LRAS curves activities 1 - 5 and the paper one style practise question on page: Equilibrium in macroeconomics (neo-classical perspective) |
| Examine, using diagrams, the impacts of changes in the long-run equilibrium. | Short response and drawing the LRAS curves activities 1 - 6 and activity 7, paper one style examination question on page: Changes in the long run aggregate supply |
| Syllabus area: Long run equilibrium (Keynesian model) | Assessment |
| Explain, using the Keynesian AD/AS diagram, that the economy may be in equilibrium at any level of real output where AD intersects AS. | Activities 1 - 3 (short answer questions and drawing the SRAS curve exercise) Activity 10, paper one style examination question on page: Equilibrium in macroeconomics (keynesian perspective) |
| Explain, using a diagram, that if the economy is in equilibrium at a level of real output below the full employment level of output, then there is a deflationary (recessionary) gap. | Activities 1 - 3 on page: Equilibrium in macroeconomics (keynesian perspective) (short answer questions and drawing the SRAS curve exercise) |
| Assumptions and implications of the monetarist/new classical and Keynesian models. | Discussion activity 1 and handout on page: Keynesian v free market debate |
| Explain, using a diagram, that if AD increases in the vertical section of the AS curve, then there is an inflationary gap. | Activities 1 - 3 on page: Equilibrium in macroeconomics (keynesian perspective) (short answer questions and drawing the SRAS curve exercise) |
Discuss why, in contrast to the monetarist / new classical model, increases in aggregate demand in the Keynesian AD/AS model need not be inflationary, unless the economy is operating close to, or at, the level of full employment. | Activities 1 - 3 on page: Equilibrium in macroeconomics (keynesian perspective) (short answer questions and drawing the SRAS curve exercise) |
| Syllabus area: Keynesian multiplier (HL only) | Assessment |
| Explain, with reference to the concepts of leakages (withdrawals) and injections, the nature and importance of the Keynesian multiplier. | Activity 1 on page: Multiplier (HL only) |
Keynesian multiplier (HL only)
| Activities 2, 3 and 4 on page: Multiplier (HL only) |
| Draw a Keynesian AD/AS diagram to show the impact of the multiplier. | Activity 1 on page: Multiplier (HL only) |
Blank essay template available at: 
Section A essay template