Question 1
Using real-world examples, evaluate the effectiveness of market-based supply-side policies in reducing the level of unemployment in a country.
Answers may include:
- Terminology: market-based supply-side policies, unemployment.
- Explanation: of the way in which market based SSPs can be used to reduce the level of unemployment;
e.g. market-based policies might make markets work better through reducing trade union power, decreasing the level of unemployment benefits and minimum wages;
may provide incentives through tax cuts;
may encourage competition, privatization and reducing trade barriers, all of which may increase the demand for labour and increase the AD and LRAS by increasing the productive capacity of the economy.
- Diagram: AD/AS diagram to show the LRAS shifting right or any other relevant diagram, such as a minimum wage diagram.
- Synthesis (evaluate): issues with market-based SSPs in terms of equity, time lags, vested interests, impact on the government budget and the environment;
importance of the type of unemployment (e.g. unlikely to be successful in reducing cyclical unemployment unless the policy is a tax cut);
the possibility of such policies, e.g. privatization and abolition of the minimum wage, actually increasing unemployment;
consideration of other policies.
- Examples: real-world examples of market-based SSPs being used to reduce the level of unemployment or the use of other policies.
Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.
N.B. It should be noted that terms, diagrams, theory and examples that have already been given in part (a), and then referred to in part (b), should be rewarded.
Assessment Criteria
Part (b) 15 marks
Marks
Level descriptor
0
- The work does not reach a standard described by the descriptors below.
1-3
- 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.
- The response contains no evidence of synthesis or evaluation.
- A real-world example(s) is identified but it is irrelevant.
4-6
- The response indicates some understanding of the specific demands of the question.
- Relevant economic theory is described.
- Some relevant economic terms are included.
- The response contains evidence of superficial synthesis or evaluation.
- A relevant real-world example(s) is identified.
7-9
- 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.
- The response contains evidence of appropriate synthesis or evaluation but lacks balance.
- A relevant real-world example(s) is identified and partly developed in the context of the question.
10-12
- 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.
- The response contains evidence of appropriate synthesis or evaluation that is mostly balanced.
- A relevant real-world example(s) is identified and developed in the context of the question.
13-15
- 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.
- The response contains evidence of effective and balanced synthesis or evaluation.
- A relevant real-world example(s) is identified and fully developed to support the argument.