Economics HL

IB Questions

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Question 1 of 10

Hard25 marks
(a)

Explain how contractionary monetary policy can be used to reduce inflationary pressures in an economy.

[10]
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(b)

Evaluate the use of monetary policy compared to supply-side policies in achieving price stability and economic stability.

[15]
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Question 2 of 10

Medium25 marks
(a)

Explain using diagrams how a decrease in global oil prices can lead to both short-term and long-term effects on a country's aggregate supply.

[10]
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(b)

Evaluate the effectiveness of fiscal policy measures in stimulating economic growth in a recession. Consider aspects such as time lags, multiplier effect, and public debt.

[15]
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Question 3 of 10

Hard25 marks
(a)

Explain how a decrease in interest rates might influence aggregate demand (AD) using the concept of the Keynesian multiplier.

[10]
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(b)

Discuss the effectiveness of fiscal policy compared to monetary policy in achieving economic growth in a recession.

[15]
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Question 4 of 10

Hard25 marks
(a)

Explain how a government's implementation of fiscal policy can lead to a shift in the aggregate demand curve.

[10]
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(b)

Evaluate the effectiveness of fiscal policy in stabilizing the economy during periods of high unemployment.

[15]
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Question 5 of 10

Hard25 marks
(a)

Explain how an increase in interest rates could lead to a decrease in aggregate demand in an economy.

[10]
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(b)

Evaluate the impact of a prolonged decrease in aggregate demand on an economy’s macroeconomic indicators such as GDP, unemployment, and inflation.

[15]
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Question 6 of 10

Hard25 marks
(a)

Explain the impact of technology advancements in renewable energy and government investment in human capital on the potential output of an economy.

[10]
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(b)

Evaluate the effectiveness of market-based supply-side policies in boosting economic growth. Consider policies such as deregulation, tax incentives, and labor market reforms.

[15]
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