Question 1
Explain how increased investment by the government in education and training can affect both aggregate demand and aggregate supply.
Answers may include:
- definition of investment, aggregate demand, aggregate supply
- diagrams to show aggregate demand (AD) shifting right and LRAS shifting right
- explanation of how increased investment by the government in education and training can increase AD in the short term by increasing the G component of C+I+G+X-M and increase LRAS in the long term as labour productivity increases
- examples of countries in which the government has increased investment in education and training.
Assessment Criteria
Part (a) 10 marks
Level 0 (0 marks): The work does not meet 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.