Exam-style question
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Growth forecast on 3.2.5.2 Supply-side policies: which option best explains the economic mechanism in The national and international economy?.
- A.Distinguish supply from the nearest misconception, then use price, quantity, incentives or welfare to explain the economic consequence.
- B.A higher price level is the same as inflation.
- C.Short-run and long-run macroeconomic effects are identical.
- D.Give a definition of supply only, without application, chain of analysis, evaluation or judgement.
Model answer
What a good answer should say
- Correct answer: Distinguish supply from the nearest misconception, then use price, quantity, incentives or welfare to explain the economic consequence..
- It is correct because it links 3.2.5.2 supply-side policies to trade-offs and keeps the reasoning within the evidence supplied by the question.
Explanation
Why this works
The reasoning should move from cause to transmission mechanism to consequence. Use a diagram, calculation or data point if it is relevant, then test the answer with Economics evaluation: size of effect, time period, elasticity or responsiveness, assumptions, and distribution of gains and losses.
This keeps the response specific to Fiscal policy and supply-side policies rather than repeating a generic question template.
Common mistake
No common mistake is linked to this question yet.