Question 1
Explain how a rise in consumer confidence and business confidence might affect economic growth.
Answers may include:
- definitions of consumer confidence, business confidence and economic growth
- explanation of how rising consumer confidence might increase consumption and AD leading to economic growth. Explanation of how rising business confidence might increase investment and AD leading to economic growth
- AD/AS diagram to show an increase in GDP brought about by rising consumption and investment
- examples of situations where rising consumer and business confidence have affected economic growth.
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.