SJI Economics Department
June 2020
Y6 MACROECONOMICS REVISION PRACTICE QUESTIONS
HL/SL Paper 1
1a. Explain how the three concepts National Output, National Income
and National Expenditure can have identical values although measured
in different ways. [10]
SJI Economics
Department
(SL/HL)
1b. How useful are measures of GDP for indicating changes in living
standards within a country? [15]
2a. Explain how changes in the size of the circular flow depend on the
relative size of injections and leakages. [10]
N13/3/ECONO/
HP1/ENG/TZ0/
XX/M
(SL/HL)
3a. Explain the various phases of the business cycle. [10]
M19/3/ECONO/
HP1/ENG/TZ2/
XX/M (SL/HL)
3b. Discuss the view that economies will always return to the full
employment level of output in the long run. [15]
4a. Explain the differing factors that give rise to a negatively sloped
demand curve and a negatively sloped aggregate demand curve. [10]
Economics for
the IB Diploma,
question 9.2
(SL/HL)
5a. Explain the reasoning behind the shapes of the long-run aggregate
supply (LRAS) curve and the Keynesian AS curve. [10]
Economics for
the IB Diploma,
question 9.5
(SL/HL)
6a. Explain the effect an increase in investment might have on real
gross domestic product (GDP) using the Keynesian multiplier. [10]
N19/3/ECONO/
HP1/ENG/TZ0/
XX/M
(SL/HL)
6b. Discuss the view that interventionist supply-side policies are the
most effective way for a government to achieve economic growth. [15]
7a Using a Phillips curve diagram, explain how stagflation impacts on
unemployment and inflation. [10]
7b. Using a Phillips curve diagram, discuss the possible trade-off
between unemployment and inflation. [15]
8a. Explain how a producer price index could be useful in predicting
future inflation. [10]
Economics for
the IB Diploma,
question 10.9
(SL/HL)
N13/3/ECONO/
SP1/ENG/TZ0/
XX/M
8b) To what extent can supply-side policies help in fighting inflation?[15]
9a) Explain how a deflationary gap might occur. [10]
9b) Using the monetarist/new classical model and the Keynesian
model, discuss the view that increases in aggregate demand will
inevitably be inflationary. [15]
1
M19/3/ECONO/
HP1/ENG/TZ1/
XX/M
(SL/HL)
SJI Economics Department
10a) Explain the role of improved productivity in achieving economic
growth. [10]
June 2020
M19/3/ECONO/
SP1/ENG/TZ1/
XX/M
10b) Discuss the view that economic growth can only be achieved at
the expense of other macroeconomic objectives such as a low and
stable rate of inflation and equity in the distribution of income. [15]
11a) Explain how an increase in unemployment might lead to a loss of
gross domestic product (GDP) and a budget deficit. [10]
M19/3/ECONO/
HP1/ENG/TZ2/
XX/M
12a. Distinguish between structural and demand-deficient
unemployment. [10]
N14/3/ECONO/
HP1/ENG/TZ0/
XX/M (SL/HL)
12b. Discuss the view that the problem of unemployment can be
reduced through the use of supply-side policies. [15]
13b. Discuss the view that governments should always try to avoid
deflation. [15]
M16/3/ECONO/
SP1/ENG/TZ2/
XX (SL/HL)
14a. Explain how labour market reforms may be used to promote
economic growth. [10]
M13/3/ECONO/
HP1/ENG/TZ1/
XX/M (SL/HL)
14b. “Market-oriented supply-side policies will always be more effective
in promoting economic growth than demand-side policies.” To what
extent do you agree with this statement. [15]
15a. Using an appropriate diagram, explain how a recession might lead
to more poverty. [10]
N14/3/ECONO/
HP1/ENG/TZ0/
XX/M (SL/HL)
15b. Evaluate the view that attempts to achieve greater equity in the
distribution of income will reduce economic efficiency. [15]
16a. Explain two methods (other than direct taxes) that governments
can use as methods to redistribute income in favour of lower income
groups. [10]
16b. Compare and contrast alternative policies to promote greater
equality in income distribution with respect to their possible effects on
efficiency. [15]
17a. Explain how automatic stabilisers help
smooth out short-term fluctuations of the business cycle. [10]
17b.Compare and contrast the effectiveness of
fiscal policy and monetary policy in dealing with recession. [15]
18b. Evaluate the view that the use of fiscal policy is the most effective
way of reducing the rate of inflation in an economy. [15]
19b. Discuss the view that the use of monetary policy is always the best
way to reduce inflation. [15]
2
Economics for
the IB Diploma,
question 11.12
(SL/HL)
Economics for
the IB Diploma,
question 12.7
(SL/HL)
N17/3/ECONO/
HP1/ENG/TZ0/
XX/M
M17/3/ECONO/
HP1/ENG/TZ1/
XX/M
SJI Economics Department
3
June 2020