Edexcel IGCSEEconomicsGeneral Applications14 Marks

Many countries use supply-side policies to improve economic performance.

(a)Explain what is meant by supply-side policies.[2]
(b)Analyse how two different supply-side policies could lead to an increase in a country's economic growth.[6]
(c)Evaluate the potential conflicts and trade-offs of using supply-side policies.[6]

Mark scheme

Marking points from the official mark scheme. The mark or mark type is shown in brackets.

(a) B1 for policies aimed at increasing aggregate supply / productive capacity
(a) B1 for by improving efficiency / competitiveness of markets
(b) M1 for identifying a supply-side policy (e.g., education/training, deregulation, tax cuts for businesses)
(b) A1 for explaining how it works (e.g., improves human capital)
(b) A1 for linking to increased productivity/efficiency/innovation
(b) M1 for identifying a second supply-side policy (e.g., infrastructure investment, privatisation)
(b) A1 for explaining how it works (e.g., reduces costs for businesses, improves transport)
(b) A1 for linking to increased economic growth (e.g., outward shift of LRAS/PPF)
(c) M2 for identifying and explaining a conflict/trade-off (e.g., time lags, equity concerns from tax cuts for wealthy, environmental impact of deregulation)
(c) A2 for developing the analysis of the conflict (e.g., tax cuts for rich could worsen income inequality, long time for education reforms to show benefits)
(c) M1 for identifying a second conflict/trade-off or an evaluative point (e.g., cost of implementation, political unpopularity)
(c) A1 for further evaluation (e.g., effectiveness depends on economic conditions, political will, specific policy choice)

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