A-LevelEconomicsThe macroeconomy9708/42 · May/June 2017 · Q525 Marks

Economic models have little practical relevance. Discuss whether this is true of the analysis of how a fall in interest rates might affect an economy's GDP.

Economic models have little practical relevance. Discuss whether this is true of the analysis of how a fall in interest rates might affect an economy's GDP.[25]

Mark scheme

Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.

Explanation of meaning of GDP; analysis of effect of interest rates on investment, saving, spending, and link between these variables and GDP. Understanding of leakages and injections. Multiplier/accelerator.
Level 4 (18-25 marks): for a sound explanation and discussion with good illustrations and a clear understanding of the principles involved with accurate links and a reasoned conclusion referring to the question, explicitly. No conclusion max. 22.

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Structured question, 25 marks.
Source: A-Level Economics, May/June 2017 Paper 4 Variant 2, question 5.

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