Paper 1: Extended response paper HL (e)
Examination paper 1 (macroeconomics)
This section includes a sample question for the new paper 1 examination, the extended data response paper. This question was completed as an exercise in 75 minutes. Read through the response and provide a grade, for each section. Then click on the space below the responses to see how the paper was assessed by the workshop leader. More specific comments are included in the paper which can be accessed by clicking on the edit link at the bottom of the page.
I will release more practise papers as soon as they become available.
Question
(a) Explain two expansionary monetary policy tools available to a government or central bank. [10 marks]
Command term: Explain - Give a detailed account including reasons or causes.
Markscheme:
Candidate could be rewarded for any two of the following instruments—open market operations, minimum reserve requirement, base rate changes or quantitative easing.
Maximum mark 10
| Marks | Descriptor |
| 0 | The response is below the descriptors described below |
| 1-2 | The response indicates little understanding of expansionary monetary policy tools available to a central bank Limited use of relevant economic theory Relevant terminology not used in the response |
| 3-4 | The response indicates some understanding of expansionary monetary policy tools available to a central bank |
| 5-6 | The response shows an understanding of the available policy tools but addresses them only partially |
| 7-8 | The response shows a clear understanding of two different expansionary monetary policy tools Relevant economic theory is explained Relevant terminology used appropriately A money market diagram showing interest rates falling or an AD/AS diagram is included and explained |
| 9-10 | The response shows a clear understanding of two different expansionary monetary policy tools Relevant economic theory is explained Relevant terminology mostly used appropriately A money market diagram showing falling interest rates or an AD/AS diagram is included and fully explained. |
(b) Using real-world examples, evaluate the effectiveness of monetary policy in maintaining a low rate of unemployment. [15 marks]
Command term: Evaluate
The command term asks candidates to evaluate whether demand or supply-side policies are more effective in increasing the level of national income. Candidates must consider arguments in support of this statement followed by counter arguments, followed by a suitable conclusion based on the evidence provided.
Real world issue - how does government manage their economy and how effective are these policies.
Responses should include some of the following:
A definition of monetary policy and low unemployment
An explanation of some of the impacts of monetary policy on the economy e.g. employment, growth, inflation and trade
A relevant AD/AS diagram
An evaluation of the strengths and weaknesses of monetary policy in achieving low unemployment.
Use of real-world examples of where governments have attempted to lower unemployment using monetary policy.
Maximum mark 15
| Marks | Descriptor |
| 0 | The response is below the descriptors described below |
| 1-3 | The response indicates limited understanding of the effectiveness of monetary policy in maintaining a low rate of unemployment Relevant economic theory not used in the response Relevant economic terms not used in the response No evidence of synthesis or evaluation included No relevant real-world example(s) included |
| 4-6 | The response indicates some understanding of the effectiveness of monetary policy in maintaining a low rate of unemployment Relevant economic theory is described in the response Some relevant economic terms used in the response Synthesis or evaluation included but superficially Relevant real-world example(s) are identified |
| 7-9 | The response shows an understanding of the effectiveness of monetary policy but this is only partially addressed Relevant economic theory is described and explained Some relevant economic terms used appropriately in the response Synthesis or evaluation included in the response but lacking balance Relevant real-world example(s) are identified and partially developed |
| 10-12 | The specific requirements of the question are understood and addressed |
| 13-15 | The response demonstrates a full understanding of the effectiveness of monetary policy but this is fully addressed Relevant economic theory is fully explained Relevant economic terms are used appropriately An appropriate AD/AS diagram is included and fully explained Balanced synthesis or evaluation is included in the response A relevant real-world example(s) are identified and fully developed to support the argument. |
Available as a PDF file at: 
Mark scheme q7