Example Candidate Responses – Paper 2
Cambridge International AS & A Level
Economics 9708
For examination from 2020
Version 1
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Contents
Introduction.......................................................................................................................................................................4
Question 1........................................................................................................................................................................6
Example Candidate Response – high..............................................................................................................................6
Example Candidate Response – middle..........................................................................................................................9
Example Candidate Response – low..............................................................................................................................12
Question 2......................................................................................................................................................................16
Example Candidate Response – high............................................................................................................................16
Example Candidate Response - middle.........................................................................................................................18
Example Candidate Response – low..............................................................................................................................20
Question 3......................................................................................................................................................................22
Example Candidate Response – high............................................................................................................................22
Example Candidate Response – middle........................................................................................................................25
Example Candidate Response – low..............................................................................................................................26
Question 4.......................................................................................................................................................................28
Example Candidate Response – high............................................................................................................................28
Example Candidate Response – middle.........................................................................................................................31
Example Candidate Response – low..............................................................................................................................34
Example Candidate Responses - Paper 2
Introduction
The main aim of this booklet is to exemplify standards for those teaching Cambridge AS & A Level Economics 9708,
and to show how different levels of candidates’ performance (high, middle and low) relate to the subject’s curriculum
and assessment objectives.
In this booklet candidate responses have been chosen from the November 2020 series to exemplify a range of
answers.
For each question, the response is annotated with a clear explanation of where and why marks were awarded or
omitted. This is followed by examiner comments on how the answer could have been improved. In this way, it is
possible for you to understand what candidates have done to gain their marks and what they could do to improve their
answers. There is also a list of common mistakes candidates made in their answers for each question.
This document provides illustrative examples of candidate work with examiner commentary. These help teachers
to assess the standard required to achieve marks beyond the guidance of the mark scheme. Therefore, in some
circumstances, such as where exact answers are required, there will not be much comment.
The questions and mark schemes used here are available to download from the School Support Hub. These files are:
November 2020 Question Paper 22
November 2020 Paper 22 Mark Scheme
Past exam resources and other teacher support materials are available on the School Support Hub:
www.cambridgeinternational.org/support
4
Example Candidate Responses - Paper 2
How to use this booklet
This booklet goes through the paper one question at a time, showing you the high-, middle- and low-level response for
each question. The candidate answers are set in a table. In the left-hand column are the candidate answers, and in
the right-hand column are the examiner comments.
Example Candidate Response – low
Examiner comments
5 There is a brief
evaluative comment, but
insufficient to be awarded a
mark.
Mark for (b) = 4 out of 12
5
Total mark awarded =
8 out of 20
4
Answers are by real candidates in exam
conditions. These show you the types of answers for
each level. Discuss and analyse the answers with your
learners in the classroom to improve their skills.
Examiner comments are
alongside the answers. These
explain where and why marks
were awarded. This helps you
to interpret the standard of
Cambridge exams so you can
help your learners to refine their
exam technique.
How the candidate could have improved their answer
•
•
(a) With a more accurate statement of the formula for the terms of trade together with a full explanation of each
cause of a change in the terms of trade.
(b) With a more careful explanation of the advantages and disadvantages of each change with more careful
This section explains how the candidate could
consideration of the benefits of each.
have improved each answer. This helps you to
interpret the standard of Cambridge exams and
helps your learners to refine their exam technique.
Common mistakes candidates made in this question
•
(a)
◦
◦
Many candidates provided an inaccurate formula to show how changes in the terms of trade are measured.
A disappointing number of candidates confused the terms of trade with the balance of trade and provided a
completely confused answer.
◦ When considering the possible causes of the fall in China’s terms of trade many were able to identify factors
such as a fall in China’s currency or a reduction in costs of production in China’s export industries. These
Often
candidates
weredue
not credit,
awarded
responses
gained
but many failed to go on to provide a full explanation.
Lists the common mistakes candidates made
marks because they misread or misinterpret
• (b)
in answering each question. This will help your
the questions.
◦ The weaker answers often considered a very narrow learners
range of to
economic
indicators
andand
often
ignored
avoid these
mistakes
give
them the
importance of price elasticities when arriving at a conclusion.
best chance of achieving the available marks.
5
Example Candidate Responses - Paper 2
Question 1
Example Candidate Response – high
Examiner comments
1 The candidate provides a
diagram that shows a shift in the
demand curve for natural vanilla
to the left. The diagram is correctly
labelled and indicates that the price
of natural vanilla fell between 2004
and 2009 as indicated in Fig 1.1.
1
2
2 The accompanying explanation
states that the price of vanillin,
which is a substitute for natural
vanilla, has fallen and that, ‘some of
the world’s largest producers of ice
cream replaced natural vanilla with
vanillin’, as indicated in the extract.
Mark for (a)(i) = 3 out of 3
3 From 2015 to 2018 the price
of natural vanilla increased. This
is shown on the diagram which is
correctly labelled.
3
4
6
4 The candidate’s explanation
gives a valid reason for the change
which is drawn from the extract.
This is that ’possible health risks
from the use of vanillin has caused
some producers of ice cream to use
natural vanilla in their ice cream
production’. This is shown on the
diagram as a shift in the demand
curve to the right that has led to
the increase in the price of natural
vanilla.
Mark for (a)(ii) = 3 out of 3
Example Candidate Responses - Paper 2
Example Candidate Response – high, continued
Examiner comments
5 The candidate correctly states
that an economist would use
the cross elasticity of demand to
measure the responsiveness of
the demand for natural vanilla to a
change in the price of vanillin.
Mark for (b)(i) = 1 out of 1
5
6
7
6 The candidate explains that
since natural vanilla and vanillin
are substitutes, then a positive
value would be expected for the
measurement of the cross elasticity
of demand.
7 The candidate explains why a
positive value would be expected.
This is because when the price of
vanillin rises, the demand for vanillin
will fall whereas the demand for
natural vanilla will rise. This gives a
positive value.
Mark for (b)(ii) = 2 out of 3
8
8 This response covers all
aspects of the answer indicated in
the mark scheme. No formula is
provided, but clear understanding
of the concept of price elasticity
of supply and what it measures is
clearly evident. The explanation of
why the price elasticity of supply of
ice cream made with vanillin is likely
to be higher than price elasticity
of supply of ice cream made with
vanilla is full and drawn from the
extract.
Mark for (c) = 4 out of 4
7
Example Candidate Responses - Paper 2
Example Candidate Response – high, continued
9
Examiner comments
9 This is a good answer that
explains the significance of price
elasticity of demand in determining
whether the impact of the recent
rise in the price of vanilla is likely to
have a positive or negative impact
upon Madagascar’s economy. This
is well explained and the candidate
concludes that the impact depends
upon the price elasticity of demand
and the reaction of consumers to
the health issues. This results in
the award of a mark for evaluation.
However, the potential negative
impact is largely implied and not
fully explained.
Mark for (d) = 5 out of 6
Total mark awarded =
18 out of 20
How the candidate could have improved their answer
•
•
(b)(ii) If the candidate had explained that the higher the size of the coefficient the stronger would be the
relationship between the two goods. This omission meant that a mark was lost here.
(d) The potential negative impact is largely implied and not fully explained. The answer could be improved if the
potential negative impact was made explicit and explained.
8
Example Candidate Responses - Paper 2
Example Candidate Response – middle
Examiner comments
1 The candidate provides an
accurate diagram showing a shift
in the demand curve to the left
and the resulting fall in the price of
natural vanilla.
1
2
2 There is no explanation for the
decrease in demand provided and,
as a result, a mark is lost.
Mark for (a)(i) = 2 out of 3
3
4
5
2
6
3 The candidate provides an
accurate diagram showing a shift in
the supply curve to the left and the
resulting rise in the price of natural
vanilla.
4 There is no explanation for the
decrease in supply provided and a
mark is lost as a result.
Mark for (a)(ii) = 2 out of 3
5 The candidate correctly states
that an economist would use
the cross elasticity of demand to
measure the responsiveness of
the demand for natural vanilla to a
change in the price of vanillin.
Mark for (b)(i) = 1 out of 1
6 The candidate explains that a
positive value would be expected
for the measurement of the
cross elasticity of demand of the
two products because they are
substitutes. The candidate then
goes on to explain why a positive
value would be expected. This is
because when the price of vanilla
rises, the quantity demanded
of vanillin will rise. This gives a
positive value.
Mark for (b)(ii) = 2 out of 3
9
Example Candidate Responses - Paper 2
Example Candidate Response – middle, continued
Examiner comments
7 The candidate’s answer
displays a clear understanding of
the concept of price elasticity of
supply and the formula is provided.
The candidate explains why the fact
that vanillin has greater stocks than
vanilla is the reason that vanillin’s
price elasticity of supply is higher
than that of vanilla. However, there
is no mention of ice cream in the
answer so a mark was lost as a
result.
Mark for (c) = 3 out of 4
8 The candidate makes a
confused start by moving from the
rise in the price of vanilla to a rise
in the quantity of vanillin demanded
and the impact of this upon
Madagascar’s economy. This was
irrelevant.
7
8
9
10
9 The answer suggests that if
the demand for vanilla was price
inelastic then this would have a
positive impact on firm’s profits
and the government finances. The
answer then considers the potential
negative effects of the rise in
price in terms of the impact on net
exports and the rise in aggregate
demand that might generate
demand-pull inflation. A weakness
of this is that the assumptions
that inflation might arise were
not made clear. For example, the
candidate might have stated that
inflation would result from the
increase in net exports if no spare
capacity existed in the economy.
So the analysis of the potential
positive and negative effects was
superficial. In addition, although a
conclusion was provided this was
insufficiently explained.
Mark for (d) = 3 out of 6
Example Candidate Responses - Paper 2
Example Candidate Response – middle, continued
Examiner comments
Total mark awarded =
13 out of 20
How the candidate could have improved their answer
•
•
•
•
•
(a)(i) If the candidate had explained that the price of vanillin, which the extract states is a substitute for vanilla, has
been falling in price causing the demand for vanilla to decrease.
(a)(ii) If the candidate had explained that the reason for the decrease in supply of vanilla was the cyclone that hit
Madagascar in 2017.
(b)(ii) If the candidate had explained that the higher the size of the coefficient the stronger would be the
relationship between the two goods. This omission meant that a mark was lost here.
(c) If there was simple statement of the fact that the question related to the price elasticity of ice cream, not just the
ingredients.
(d) With a more developed consideration of the potential impact of the price change in terms of the impact upon the
Madagascan economy.
11
Example Candidate Responses - Paper 2
Example Candidate Response – low
Examiner comments
1 This is a confused answer that
fails to score. The diagram shows
a rise in the price of natural vanilla
rather than the fall that occurred
between 2004 and 2009.
1
2 The extract explains that this
was caused by a fall in the demand
for natural vanilla as a result of the
fall in the price of vanillin which is a
substitute for vanilla.
Mark for (a)(i) = 0 out of 3
2
3 This is a much better attempt
that scores two marks for the
diagram. This shows an increase
in the demand for natural vanilla
and explains the rise in price that
occurred between 2015 and 2018.
4 The candidate’s explanation
makes no reference to the reason
for the increase in demand for
vanilla. This occurred as a result of
the health concerns arising from the
use of vanillin.
Mark for (a)(ii) = 2 out of 3
3
4
5
6
12
5 The candidate scores the
mark available for correctly stating
that cross elasticity of demand
would be used to measure the
responsiveness of the demand for
natural vanilla to a change in the
price of vanillin.
Mark for (b)(i) = 1 out of 1
6 The candidate scores a
mark for stating that, as vanillin
and natural vanilla are strong
substitutes, then a positive cross
elasticity value would be expected.
There is an explanation provided
of why this would be expected
and this also receives a mark.
There is some attempt to explain
why they could be considered as
‘strong substitutes’, but this is not
sufficiently clear and the final mark
was not awarded.
Mark for (b)(ii) = 2 out of 3
Example Candidate Responses - Paper 2
Example Candidate Response – low, continued
Examiner comments
7 The candidate explains the
factors that determine the price
elasticity of supply of vanillin and
vanilla, but these explanations are
not supported by an explanation
of the underlying concepts. For
example, the candidate states
that the ‘production of vanillin is
faster’, but price elasticity of supply
measures the response of quantity
supplied to a change in its price.
Similarly, the candidate explains
that natural vanilla takes a long time
to grow and is susceptible to natural
disasters which makes the supply
of natural vanilla ‘lesser’ compared
to vanillin but there is no link to the
change in price.
Mark for (c) = 2 out of 4
8 The candidate makes some
brief comment on the likely
negative and positive effects on
Madagascar’s economy of a rise in
vanilla prices. There is superficial
reference to the significance of
the price elasticity of demand for
vanilla. The main weakness is that
the impact of the rise in price is very
narrow and does not fully consider
the impact upon Madagascar’s
economy. For example, the
candidate states that ‘higher total
revenue will be raised’, but there is
no explanation of the impact of this
upon economic indicators such as
the current account of the balance
of payments.
7
8
9
13
9 The candidate’s answer
also contains irrelevant material
that confuses the impact of the
consumption of ice cream with the
rise in the price of vanilla.
Mark for (d) = 3 out of 6
Example Candidate Responses - Paper 2
Example Candidate Response – low, continued
Examiner comments
Total mark awarded =
10 out of 20
14
Example Candidate Responses - Paper 2
How the candidate could have improved their answer
•
•
•
•
•
(a)(i) With more careful interpretation of the graph and the extract.
(a)(ii) If the reason for the increase in the demand for vanilla had been explained.
(b)(ii) If the explanation of how the strength of the relationship between the two goods was measured by the size of
the coefficient was made clearer.
(c) If the candidate had linked the relative elasticity of the two products to a change in price and linked this to the
resulting price elasticity of supply of ice cream.
(d) If the candidate had focused upon the impact of the price rise on the wider Madagascar economy.
Common mistakes candidates made in this question
•
•
•
•
•
•
(a)(i)
◦ Many diagrams provided had incorrectly labelled axes. Many were incorrectly drawn or failed to show the fall
in price that resulted from the decrease in demand.
◦ Many diagrams showed that the demand for natural vanilla had decreased but did not say why this
happened. Some referred to the presence of a synthetic substitute but did not explain that the price of natural
vanillin had fallen as stated in the extract.
◦ Some candidates failed to understand the information in the extract and provided a diagram that showed a
rise in the price of vanilla in this time period. Candidates should make every effort to comprehend the data so
that the material is fully understood.
(a)(ii)
◦ Many diagrams provided had incorrectly labelled axes. Many were incorrectly drawn or failed to show the fall
in price that resulted from the decrease in demand.
◦ Many diagrams showed that the demand for natural vanilla had increased or alternatively showed that the
supply of vanilla had decreased but did not say why this happened. They did not refer to the health risks
associated with vanillin or that the cyclone had severely disrupted supplies of vanilla.
◦ Some candidates failed to understand the information in the extract and provided a diagram that showed a
fall in the price of vanilla in this time period. Candidates should make every effort to comprehend the data so
that the material is fully understood.
(b)(i) The most common error was that many candidates suggested that price elasticity of demand would be used
to measure the relationship between the two goods. This was perhaps because they failed to read the question
carefully.
(b)(ii)
◦ Some candidates based their answer on the price elasticity of demand and failed to score.
◦ Some candidates stated that substitutes had a negative coefficient. Their explanation of this relationship was
as a result usually incorrect. Many candidates failed to explain that the size of the coefficient was a measure
of the strength of the relationship between the two goods.
(c)
◦ Some candidates had a limited understanding of the concept of price elasticity of supply.
◦ Many candidates answered this question with no reference to ice cream. They focused upon the price
elasticity of supply of vanillin and vanilla with no reference to these as inputs into the production of ice cream.
(d)
◦ A number of candidates gave only brief answers here despite the high mark allocation. Candidates need to
consider the mark allocation of each question to judge the development required for a good mark.
◦ Some candidates misunderstood the requirements of the question. They made no reference to economic
indicators such as the current account of the balance of payments or the level of unemployment that might
arise as a result of the price rise which would have allowed them to assess the impact upon Madagascar’s
economy.
◦ Some candidates gave unbalanced answers that considered only the positive or negative impact of the rise
in the price of natural vanilla. This undermined their ability to provide evaluative comment and arrive at a
reasoned conclusion.
15
Example Candidate Responses - Paper 2
Question 2
Example Candidate Response – high
Examiner comments
1 The candidate produces an
accurate diagram that clearly shows
the impact of a subsidy on both the
price and the consumer surplus in
the market for vaccinations. This is
awarded 4 marks for application.
1
2
3
16
2 The candidate goes on to
show a sound knowledge and
understanding of what is meant by
consumer surplus.
Mark for (a) = 8 out of 8
3 The analysis here requires a
consideration of the advantages
and the disadvantages of both
direct and indirect taxes in order to
allow some evaluative comment on
the relative merits of the two types
of taxation to allow a reasoned
conclusion to be reached. The
candidate provides an answer that
considers a range of factors that
should be considered although
there is a little more material
provided on direct taxes. There is
some evaluative comment, but this
is rather superficial.
Mark for (b) = 9 out of 12
Example Candidate Responses - Paper 2
Example Candidate Response – high, continued
Examiner comments
Total mark awarded =
17 out of 20
How the candidate could have improved their answer
•
•
(a) If the candidate explained that the impact in the market is determined by factors such as the price elasticity of
demand and the price elasticity of supply in the market for vaccinations.
(b) With a more balanced consideration of the advantages and disadvantages of indirect taxes and more
developed evaluation.
17
Example Candidate Responses - Paper 2
Example Candidate Response – middle
Examiner comments
1 The candidate provides an
accurate diagram that shows the
shift in the supply curve to the right
that results from the subsidy and
indicates the fall in equilibrium
price. The change in consumer
surplus is also clearly indicated.
1
2
3
2 The candidate’s answer
does not show knowledge and
understanding of the consumer
surplus so the answer is
incomplete. There is also no
reference to factors such as the
price elasticity of demand or
supply that determine the extent
of the impact upon the price and
consumer surplus.
Mark for (a) = 4 out of 8
3 The candidate makes some
quite descriptive comments about
direct and indirect taxes that do not
emphasise the advantages and
disadvantages of either.
18
Example Candidate Responses - Paper 2
Example Candidate Response – middle, continued
4
Examiner comments
4 This is a final paragraph that
does not really evaluate the case
for imposing direct or indirect taxes.
Mark for (b) = 3 out of 12
Total mark awarded =
7 out of 20
How the candidate could have improved their answer
•
•
(a) With clear understanding of consumer surplus shown together with reference to the factors that determine the
impact of the subsidy.
(b) With a more analytical approach to the advantages and disadvantages of each type of tax. The final paragraph
should weigh the overall merits of each type of tax to arrive at a reasoned conclusion.
19
Example Candidate Responses - Paper 2
Example Candidate Response – low
Examiner comments
1 The candidate provides an
accurately labelled diagram that
shows that the subsidy will shift the
supply curve to the right and reduce
the market price. The diagram
does not show the impact of the
subsidy upon the consumer surplus
however so only 2 marks are
awarded for the diagram.
1
2
2
3
2 The meaning of consumer
surplus is not mentioned so
there are no marks awarded for
knowledge and understanding of
this concept. There is mention that
the consumer surplus will increase,
but this is not explained as required
by the question.
Mark for (a) = 2 out of 8
3 This is a very superficial
answer that mentions only a few
advantages and disadvantages of
the two types of taxes. There is no
attempt to provide evaluation.
Mark for (b) = 3 out of 12
20
Example Candidate Responses - Paper 2
Example Candidate Response – low
Examiner comments
Total mark awarded =
5 out of 20
How the candidate could have improved their answer
•
•
(a) If an explanation of consumer surplus was provided and the impact of the subsidy upon consumer surplus was
illustrated on the diagram.
(b) With a fuller range of advantages and disadvantages of both types of tax. Several important issues are not
mentioned such as the potential progressive nature of direct taxes and the regressive nature of indirect taxes and
the impact of each upon inequality.
Common mistakes candidates made in this question
•
(a)
◦
◦
•
(b)
◦
◦
A considerable number of candidates were able to illustrate the impact of the subsidy on the consumer
surplus but did not explain what was meant by this concept.
Few candidates explained that the change in the market price and the consumer surplus would be affected
by the price elasticities of demand and supply of vaccinations.
Many candidates lost marks here because they did not answer the question set. Many described the
difference between direct and indirect taxes but did not consider which type of tax should be used to raise the
revenue to fund the vaccination programme.
Many of those who explained that direct taxes could be progressive showed confusion over the meaning of
the term. Many said that progressive taxes meant that those with higher incomes would pay more tax. This
is true however of other taxes such as proportional taxes. The meaning of a progressive tax is that those on
higher incomes will pay a higher percentage of their incomes in tax.
21
Example Candidate Responses - Paper 2
Question 3
Example Candidate Response – high
Examiner comments
1 This candidate has a clear
idea of the functions of the factor
enterprise in terms of risk taking
and the organisation of the other
factors, as well as a clear idea
of the reward to each of the
four factors. The contribution of
enterprise to aggregate supply is
explained although there could
have been more development of
the impact of enterprise on the
productive potential of an economy.
Mark for (a) = 7 out of 8
1
22
Example Candidate Responses - Paper 2
Example Candidate Response – high, continued
Examiner comments
2 There is clear recognition, by
the candidate, of the components
of aggregate demand in this
answer. There is some confusion
over the meaning of monetary
policy, but the main weakness is
that the candidate states that, as
there is more money consumption
investment will increase, without an
explanation of what will cause this
increase in spending.
2
3
3 The answer is well supported
by appropriate diagrams which are
used to provide evaluative comment
and arrive at a conclusion.
Mark for (b) = 7 out of 12
23
Example Candidate Responses - Paper 2
Example Candidate Response – high, continued
Examiner comments
Total mark awarded =
14 out of 20
How the candidate could have improved their answer
•
•
(a) If the candidate had made clearer the impact of enterprise upon the productive potential of an economy or the
level of employment of the other factors of production.
(b) With an explanation of why consumption and investment spending will increase if the money supply increases.
24
Example Candidate Responses - Paper 2
Example Candidate Response – middle
Examiner comments
1 This answer identifies one of
the functions of the entrepreneur
and gains due credit. The rewards
to enterprise, land and labour are
correctly stated, but the reward to
capital is not clear and considered
too vague. The contribution of
enterprise to aggregate supply is
not fully clear and there is some
confusion between total production
and productivity.
Mark for (a) = 4 out of 8
1
2 The answer provided is quite
superficial in terms of the analysis
of an increase in the money supply
upon the components of aggregate
demand. There is good use of an
appropriate diagram however to
show the effect of the economy
being at full capacity. There is also
brief mention of the effect of the
economy being in recession.
Mark for (b) = 5 out of 12
2
Total mark awarded =
9 out of 20
How the candidate could have improved their answer
•
•
(a) If the candidate had made it clear that enterprise can increase the productive potential of an economy or
increased the utilisation of resources.
(b) If a fuller analysis of the impact of an increase in the money supply on the components of aggregate demand
had been provided.
25
Example Candidate Responses - Paper 2
Example Candidate Response – low
Examiner comments
1 This is a very brief answer
which provides the bare minimum in
terms of the functions of enterprise
and the rewards to the factors
of production. There is limited
reference to the contribution of
enterprise to aggregate supply.
Mark for (a) = 6 out of 8
1
2 A very brief and superficial
answer. There is recognition of the
components of aggregate demand,
but the impact of an increase
in the money supply on each of
these is unexplained. Some of the
analysis is based upon assumptions
and there is no valid evaluative
comment.
Mark for (b) = 1 out of 12
2
Total mark awarded =
7 out of 20
26
Example Candidate Responses - Paper 2
How the candidate could have improved their answer
•
•
(a) If the candidate had explained how enterprise contributed to the productive potential of an economy.
(b) With a fuller analysis of the impact of an increase in the money supply on the components of aggregate
demand together with evaluation to reach a reasoned conclusion.
Common mistakes candidates made in this question
•
•
(a) Although many candidates who answered this question were aware of the role of enterprise in the production
process in terms of risk bearing and the organisation of the other factors many failed to explain how enterprise
contributes to aggregate supply.
(b)
◦ Many candidates showed understanding that an increase in the money supply would increase the
components of aggregate demand but many failed to explain why this would occur. An increase in the
money supply would lead to a fall in interest rates and lead to a fall in savings as the rewards were less. It
would also lead to an increase in borrowing to fund consumption. Similar explanations could be provided to
explain how the increase in the money supply would increase investment and net exports. As stated, many
candidates lost marks because they stated that consumption would increase but failed to explain why.
◦ Many candidates did not complete the question. They did not consider whether the impact of the increase
in the money supply would be likely to increase employment or the price level. No marks were awarded for
evaluation.
27
Example Candidate Responses - Paper 2
Question 4
Example Candidate Response – high
Examiner comments
1 This candidate has a clear idea
of the terms of trade.
1
2 The candidate states
correctly that one cause of a fall
is the depreciation of the yuan.
However, a full explanation required
reference to what might cause the
depreciation. A simple statement
such as, ‘a fall in the rate of
interest in China would cause a
depreciation of the yuan’.
2
3
28
3 Similarly, the candidate states
that a fall in the demand for China’s
exports would cause the terms of
trade to fall without stating what
might cause this such as a fall in
incomes in China’s export markets.
Mark for (a) = 4 out of 8
Example Candidate Responses - Paper 2
Example Candidate Response – high, continued
Examiner comments
4
29
4 However, the explanations of
three possible causes of the fall in
China’s trade are insufficient for the
two marks available for each.
Example Candidate Responses - Paper 2
Example Candidate Response – high, continued
45
Examiner comments
5 The analysis provided here is
very full and considers all aspects
of the question 4b. A range of
advantages and disadvantages is
considered and this allows for valid
evaluation.
Mark for (b) = 11 out of 12
Total mark awarded =
15 out of 20
How the candidate could have improved their answer
•
•
(a) If each possible cause of a fall in the terms of trade had been fully explained.
(b) This answer received almost full marks and so it would be difficult to improve on this answer.
30
Example Candidate Responses - Paper 2
Example Candidate Response – middle
Examiner comments
1
2
31
1 The candidate gains both
marks available for knowledge and
understanding of the terms of trade.
2 The candidate only provides
two causes of a fall in China’s terms
of trade however and these are left
unexplained.
Mark for (a) = 4 out of 8
Example Candidate Responses - Paper 2
Example Candidate Response – middle, continued
3 The candidate considers the
potential benefits and costs of
a change in the terms of trade.
Economic indicators considered
include the impact of the changes
upon the current account of the
balance of payments, employment
and changes in the price level.
3
2
32
Examiner comments
Example Candidate Responses - Paper 2
Example Candidate Response – middle, continued
Examiner comments
1
4 There is no attempt to provide
evaluative comment to reach a
reasoned conclusion.
Mark for (b) = 7 out of 12
4
Total mark awarded =
11 out of 20
How the candidate could have improved their answer
•
•
(a) If the question requires three causes of a change then each should be attempted. They should also be fully
explained.
(b) All essay questions require evaluative comment. The answer would be improved if valid and appropriate
evaluative comment is included.
33
Example Candidate Responses - Paper 2
Example Candidate Response – low
Examiner comments
1
2
1 The candidate has a clear
idea that the terms of trade is a
measurement of the relationship
between export prices and import
prices.
2 The formula provided for the
terms of trade index is inaccurate.
3
4
34
3 The reasons given for a fall in
China’s terms of trade are not fully
explained.
Mark for (a) = 4 out of 8
4 The candidate mentions a
wide range of possible effects of
both a rise and a fall in the terms of
trade. These are not fully developed
however and the distinction
between the advantages and the
disadvantages of the change is
rather unclear.
Example Candidate Responses - Paper 2
Example Candidate Response – low, continued
Examiner comments
5 There is a brief evaluative
comment, but insufficient to be
awarded a mark.
Mark for (b) = 4 out of 12
5
Total mark awarded =
8 out of 20
35
Example Candidate Responses - Paper 2
How the candidate could have improved their answer
•
•
(a) With a more accurate statement of the formula for the terms of trade together with a full explanation of each
cause of a change in the terms of trade.
(b) With a more careful explanation of the advantages and disadvantages of each change with more careful
consideration of the benefits of each.
Common mistakes candidates made in this question
•
•
(a)
◦
◦
Many candidates provided an inaccurate formula to show how changes in the terms of trade are measured.
A disappointing number of candidates confused the terms of trade with the balance of trade and provided a
completely confused answer.
◦ When considering the possible causes of the fall in China’s terms of trade many were able to identify factors
such as a fall in China’s currency or a reduction in costs of production in China’s export industries. These
responses gained due credit, but many failed to go on to provide a full explanation.
(b) The weaker answers often considered a very narrow range of economic indicators and often ignored the
importance of price elasticities when arriving at a conclusion.
36
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