IB Economics HL 3.2.6 Macroeconomic Equilibrium Questions

Level

Marks

0

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

1

The written response is limited.

1-2

For a fully labelled diagram showing AD shifting right and SRAS shifting left, with a new LR equilibrium at the intersection of LRAS and the new AD. OR

For explaining that a higher price level (and lower unemployment) will lead to higher wages/input prices, so SRAS/production falls (to the left). The new long-run equilibrium is where the new AD intersects LRAS at a higher price level with no impact on real GDP (the full-employment level of output).

2

The written response is accurate.

3-4

For a fully labelled diagram showing AD shifting right and SRAS shifting left, with a new LR equilibrium at the intersection of LRAS and the new AD.

AND

For explaining that a higher price level (and lower unemployment) will lead to higher wages/input prices, so SRAS/production falls (to the left). The new long-run equilibrium is where the new AD intersects LRAS at a higher price level with no impact on real GDP (the full-employment level of output).

NB An alternative response which illustrates and explains how the economy would adjust to a decrease in aggregate demand should also be fully rewarded.