Exam-style question
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Data-response practice: using the evidence in context, analyse how a change linked to aggregate demand and aggregate supply would affect price, quantity, welfare or macroeconomic performance. (3).
Model answer
What a good answer should say
- 3.2.2.1 The Circular Flow of Income.
- EXAM-STYLE 3: a strong response defines the relevant economic concept, applies it to the stated context, develops a cause-and-effect chain, and reaches a judgement about growth, inflation, unemployment, external balance and living standards.
Explanation
Why this works
is assessed through the prompt: "Data-response practice: using the evidence in context, analyse how a change linked to aggregate demand and aggregate". Begin with a precise definition of The Circular Flow of Income., then apply it to The national and international economy using the context rather than a memorised paragraph.
The analysis should move through at least three steps: the initial cause, the transmission mechanism, and the economic consequence for growth, inflation, unemployment, external balance and living standards. Evaluation should consider whether the result depends on elasticities, confidence, spare capacity, market power, data quality, the size of the intervention, or the time period.
A high-quality AQA answer finishes with a judgement that weighs the strongest argument against the most important limitation, not a generic "it depends" sentence.
Common mistake
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