IB Economics HL 3.6.6 Automatic stabilizers Question Bank

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 limited explanation of one stabilizer, award a maximum of [1]. For an accurate explanation of one stabilizer OR a limited explanation of two stabilizers, award a maximum of [2].

2

The written response is accurate.

3-4

For providing an accurate explanation of one stabilizer AND a limited explanation of one other stabilizer, award a maximum of [3]. For providing two accurate explanations, award a maximum of [4]. Accurate explanations include:

- When an economy enters recession and workers become unemployed, they (automatically) receive unemployment benefits. Their (disposable income and thus) consumption expenditures do not decrease as much, so AD and national income do not decrease as much.

- As incomes are rising during an expansion, income tax revenues collected rise faster. Thus, (disposable incomes and) consumption expenditures rise more slowly, so the increase in AD is slower than otherwise and national income does not increase as much, reducing inflationary pressures.

A response which does not refer to both an upswing and a downswing may be awarded [3] only.