Exam-style question
Try this first
Explain how monetary policy affects resource allocation, welfare or macroeconomic performance. Include evaluation in your answer. (1).
Model answer
What a good answer should say
- 3.2.4.1 The Structure of Financial Markets and EXAM-STYLE 1: 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
3.2.4.1 The Structure of Financial Markets and is assessed through the prompt: "Explain how monetary policy affects resource allocation, welfare or macroeconomic performance. Include evaluation in".
Begin with a precise definition of The Structure of Financial Markets and, 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
No common mistake is linked to this question yet.