Question 1
Evaluate the view that fiscal policy is the best way to reduce unemployment.
Answers may include:
- definitions of fiscal policy, unemployment
- diagram to show how fiscal policy leads to a fall in unemployment
- explanation of how expansionary fiscal policy leads to a rise in AD and real GDP, leading to a fall in unemployment as more workers are needed in production
- examples of where fiscal policy has been used to reduce unemployment
- synthesis or evaluation.
Evaluation may include: consideration of the problems of using fiscal policy to reduce unemployment such as;
budget deficit, inflation and it is not as effective at reducing unemployment that is not demand-deficient (structural, frictional). There could also be coverage of alternative policies such as monetary and supply side.
A maximum of [12] should be awarded if a candidate has not considered an alternative policy.
Assessment Criteria
Level 0 (0 marks): The work does not meet a standard described by the descriptors below.
Level 1 (1-5 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 (6-9 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 (10-12 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 is an attempt at synthesis or evaluation. There are few errors.
Level 4 (13-15 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 is evidence of appropriate synthesis or evaluation. There are no significant errors.