IB Economics HL 3.3.6 Deflation and Disinflation Questions

Answers may include:
- definition of deflation
- AD/AS diagram(s) showing either AD or AS shifting and a lower average price level
- an explanation of possible consequences of deflation such as deflationary spiral with high levels of cyclical unemployment and/or bankruptcies due to rising real value of debt
- examples of countries that have experienced deflation
- synthesis or evaluation (discuss).

Discussion may include: consideration of the extent to which the consequences of deflation depend on its causes;
consideration of the effect of deflation on different stakeholders.

Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.

Assessment Criteria

Level ..... Marks
0 The work does not meet a standard described by the descriptors below. ..... 0
1 There is little understanding of the specific demands of the question. Relevant economic terms are not defined. There is very little knowledge of relevant economic theory. There are significant errors. ..... 1-5
2 There is some understanding of the specific demands of the question. Some relevant economic terms are defined. There is some knowledge of relevant economic theory. There are some errors. ..... 6-9
3 There is understanding of the specific demands of the question. Relevant economic terms are defined. Relevant economic theory is explained and applied. Where appropriate, diagrams are included and applied. Where appropriate, examples are used. There is an attempt at synthesis or evaluation. There are few errors. ..... 10-12
4 There is clear understanding of the specific demands of the question. Relevant economic terms are clearly defined. Relevant economic theory is clearly explained and applied. Where appropriate, diagrams are included and applied effectively. Where appropriate, examples are used effectively. There is evidence of appropriate synthesis or evaluation. There are no significant errors. ..... 13-15