Practise IB Economics SL 3.1.1 by explaining national income measurement, circular flow income, injections, leakages, and their effects on economic activity using marked exam evidence.
Explain the effect of a rise in saving and a fall in investment on the circular flow of income of an economy.
Answers may include:
- definitions of circular flow, saving and investment
- diagram to show how the circular flow is affected by changes in saving and investment
- theory to explain how a rise in savings and a fall in investment will decrease the value of the circular flow of income
- examples of where such changes may have happened.
Assessment Criteria
Part (a) 10 marks
Level 0 (0 marks): The work does not reach a standard described by the descriptors below.
Level 1 (1-3 marks): 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.
Level 2 (4-6 marks): 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.
Level 3 (7-8 marks): 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 are few errors.
Level 4 (9-10 marks): 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 are no significant errors.