Question 1
Explain two goals of fiscal policy.
Answers may include:
- Terminology: fiscal policy.
- Theory: explanation of any two of the following goals: low and stable inflation, low unemployment, increase short run economic growth, promote a stable economic environment for long-term growth, reduce business cycle fluctuations, equitable distribution of income and/or external balance.
- Diagram: Appropriate diagram(s) to show attainment of the two goals chosen.
A maximum of [6] should be awarded if only one goal of fiscal policy is explained.
Candidates who explain and diagram the supply-side effects of fiscal policy should also be fully rewarded.
The goals of fiscal policy can be explained either through why it is used (eg stable inflation) or how it is used (eg cutting tax). Both approaches should be equally rewarded.
Assessment Criteria
Marks
Level descriptor
0
- The work does not reach a standard described by the descriptors below.
1-2
- The response indicates little understanding of the specific demands of the question.
- Economic theory is stated but it is not relevant.
- Economic terms are stated but they are not relevant.
3-4
- The response indicates some understanding of the specific demands of the question.
- Relevant economic theory is described.
- Some relevant economic terms are included.
5-6
- The response indicates understanding of the specific demands of the question, but these demands are only partially addressed.
- Relevant economic theory is partly explained.
- Some relevant economic terms are used appropriately.
- Where appropriate, relevant diagram(s) are included.
7-8
- The specific demands of the question are understood and addressed.
- Relevant economic theory is explained.
- Relevant economic terms are used mostly appropriately.
- Where appropriate, relevant diagram(s) are included and explained.
9-10
- The specific demands of the question are understood and addressed.
- Relevant economic theory is fully explained.
- Relevant economic terms are used appropriately throughout the response.
- Where appropriate, relevant diagram(s) are included and fully explained.