IB Economics HL 3.2.5 Long-run shifts in aggregate supply Question Bank

Level

Marks

0

The work does not meet a standard described by the
descriptors below.

1

For drawing a correctly labelled diagram with LRAS shifting left (or a Keynesian AS 'shifting' left or a PPF shifting inwards)

OR

for an explanation that productive capacity decreases/factors of production decrease, which leads to potential output decreasing.

1-2

2

The written response is accurate.

3-4

For drawing a correctly labelled diagram with LRAS shifting left (or a Keynesian AS 'shifting' left or a PPF shifting inward).

AND

for an explanation that productive capacity decreases/factors of production decrease, which leads to potential output decreasing.

O R

OR

An alternative approach, which may be rewarded, is to use a business cycle diagram that shows the potential output curve becoming flatter.

Candidates who incorrectly label diagrams can be awarded with a maximum of [3]. For AD/AS, the vertical axis may be Average (General) Price Level, APL or Price level. The horizontal axis may be real output, real national output, real income, real national income, real GDP or real Y. A title is not necessary.

For a PPC diagram, there must be two goods or groups of goods competing for the same resources on the axes. Good X and Good Y are appropriate, but simply X and Y are not sufficient. A title is not necessary.