Ib economics paper 2 example

M16/3/ECONO/HP2/ENG/TZ0/XX/M Markscheme May 2016 Economics Higher level Paper 2 22 pages –2– M16/3/ECONO/HP2/ENG/TZ0/XX/M This markscheme is confidential and for the exclusive use of examiners in this examination session. It is the property of the International Baccalaureate and must not be reproduced or distributed to any other person without the authorization of the IB Assessment Centre. –3– M16/3/ECONO/HP2/ENG/TZ0/XX/M Use the paper-specific markscheme together with the markbands. Award up to the maximum marks as indicated. Section A 1. (a) (i) List two responsibilities of a country’s central bank (paragraph ). Level 0 The work does not reach a standard described by the descriptors below. (ii) [2] Marks 0 1 There is limited understanding. Any one of the responsibilities listed below: 1 2 There is clear understanding. Any two of the following responsibilities: • regulator of commercial banks • banker to the government • control of interest rates • control of money supply • maintenance of price stability • control of exchange rate policy • implementation of monetary policy • lender of last resort • pursuit of full employment • collection of economic data (for making forecasts). 2 Define the term consumption indicated in bold in the text (paragraph ). Level 0 The work does not reach a standard described by the descriptors below. [2] Marks 0 1 Vague definition. The idea that it is a component of AD, or that it is consumer spending. 1 2 Accurate definition. An explanation that it is spending by households (consumers) on goods and services. 2 –4– (b) M16/3/ECONO/HP2/ENG/TZ0/XX/M Using an AD/AS diagram, explain why the strength of the won (South Korea’s currency) may be harming economic growth. [4] Approach 1 Level 0 The work does not reach a standard described by the descriptors below. Marks 0 1 There is a correct diagram or an accurate written response. For an AD/AS diagram showing a shift to the left in AD and a decrease in real GDP or an explanation that the strong won is causing exports to be less competitive (more expensive) and/or imports to be less expensive, causing net exports to fall, thus reducing real GDP or harming economic growth. 1–2 2 There is a correct diagram and an accurate written response. For an AD/AS diagram showing a shift to the left in AD and a decrease in real GDP and an explanation that the strong won is causing exports to be less competitive (more expensive) and/or imports to be less expensive, causing net exports to fall, thus reducing real GDP or harming economic growth. 3–4 –5– M16/3/ECONO/HP2/ENG/TZ0/XX/M Approach 2 Level 0 The work does not reach a standard described by the descriptors below. Marks 0 1 There is a correct diagram or an accurate written response. For drawing a correctly labelled AD/AS diagram, showing a shift of the AD curve to the right or an explanation that the strong won is causing exports to be less competitive (more expensive) and/or imports to be less expensive thus causing net exports to fall and increasing AD and thus real GDP by less than would have been the case without the strengthening won (harming economic growth). 1–2 2 There is a correct diagram and an accurate written response. For drawing a correctly labelled AD/AS diagram, showing a shift of the AD curve to the right and an explanation that the strong won is causing exports to be less competitive (more expensive) and/or imports to be less expensive thus causing net exports to fall and increasing AD and thus real GDP by less than would have been the case without the strengthening won (harming economic growth). 3–4 For AD/AS, the vertical axis may be price level or average price level.