03 9708 22 MS Final Scoris 10032023

Cambridge International AS & A Level
ECONOMICS 9708/22
Paper 2 AS Level Data Response and Essays February/March 2023
MARK SCHEME
Maximum Mark: 60
This document has 16 pages.
© UCLES 2020 [Turn over

9708/22 Cambridge International AS & A Level – Mark Scheme February/March
POST-STANDARDISATION 2023
from 2023
Generic Marking Principles
These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.
GENERIC MARKING PRINCIPLE 1:
Marks must be awarded in line with:
 the specific content of the mark scheme or the generic level descriptors for the question
 the specific skills defined in the mark scheme or in the generic level descriptors for the
question.
 the standard of response required by a candidate as exemplified by the standardisation scripts.
Marks awarded are always whole marks (not half marks, or other fractions).
Marks must be awarded positively:
 marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit
is given for valid answers which go beyond the scope of the syllabus and mark scheme,
referring to your Team Leader as appropriate.
 marks are awarded when candidates clearly demonstrate what they know and can do.
 marks are not deducted for errors.
 marks are not deducted for omissions.
 answers should only be judged on the quality of spelling, punctuation, and grammar when
these features are specifically assessed by the question as indicated by the mark scheme.
The meaning, however, should be unambiguous.
Rules must be applied consistently, e.g., in situations where candidates have not
followed instructions or in the application of generic level descriptors.
Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.
© UCLES 2020 Page 2 of 16

Guidance on using levels-based mark schemes.
Marking of work should be positive, rewarding achievement where possible, but clearly differentiating
across the whole range of marks, where appropriate.
The marker should look at the work and then make a judgement about which level statement is the
best fit. In practice, work does not always match one level statement precisely so a judgement may
need to be made between two or more level statements.
Once a best-fit level statement has been identified, use the following guidance to decide on a specific
mark:
 If the candidate’s work convincingly meets the level statement, award the highest mark.
 If the candidate’s work adequately meets the level statement, award the most appropriate
mark in the middle of the range (where middle marks are available).
 If the candidate’s work just meets the level statement, award the lowest mark.
Social Sciences and Humanities Subject Specific Marking Principles

(for point-based marking)
1 Components using point-based marking:

 Point marking is often used to reward knowledge, understanding and application of skills.
We give credit where the candidate’s answer shows relevant knowledge, understanding
and application of skills in answering the question. We do not give credit where the
answer shows confusion.
From this it follows that we:
a DO credit answers which are worded differently from the mark scheme if they clearly
convey the same meaning (unless the mark scheme requires a specific term)
b DO credit alternative answers/examples which are not written in the mark scheme if they are
correct.
c DO credit answers where candidates give more than one correct answer in one prompt/
numbered/scaffolded space where extended writing is required rather than list-type
answers. For example, questions that require n reasons (e.g., State two reasons …)
d DO NOT credit answers simply for using a ‘key term’ unless that is all that is
required. (Check for evidence it is understood and not used wrongly)
e DO NOT credit answers which are obviously self-contradicting or trying to cover
all possibilities, e.g., a scattergun approach to a question asking for n items.
f DO NOT give further credit for what is effectively repetition of a correct point already
credited unless the language itself is being tested. This applies equally to ‘mirror statements’
(i.e., polluted/not polluted)
g DO NOT require spellings to be correct unless this is part of the test. However, spellings
of syllabus terms must allow for clear and unambiguous separation from other syllabus
terms with which they may be confused (e.g., Corrasion/Corrosion)
2 Presentation of mark scheme:

 Slashes (/) or the word ‘or’ separate alternative ways of making the same point.
 Semi colons (;) bullet points () or figures in brackets (1) separate different points.
 Content in the answer column in brackets is for examiner information/context to clarify the
marking but is not required to earn the mark (except accounting syllabuses where they
indicate negative numbers).

from 2023
3 Annotation:
 For point marking, ticks can be used to indicate correct answers and crosses can be used to
indicate wrong answers. There is no direct relationship between ticks and marks. Ticks have
no defined meaning for levels of response marking.
 For levels of response marking, the level awarded should be annotated on the script.
 Other annotations will be used by examiners as agreed during standardisation, and the
meaning will be understood by all examiners who marked that paper.
Assessment objectives
AO1 Knowledge and understanding.

 Show knowledge of syllabus content, recalling facts, formulae, and definitions.
 Demonstrate understanding of syllabus content, giving appropriate explanations and examples.
 Apply knowledge and understanding to economic information using written, numerical,
and diagrammatic forms.
AO2 Analysis
 Examine economic issues and relationships, using relevant economic concepts, theories,
and information.
 Select, interpret, and organise economic information in written, numerical and diagrammatic form.
 Use economic information to recognise patterns, relationships, causes and effects.
 Explain the impacts and consequences of changes in economic variables.
AO3 Evaluation
 Recognise assumptions and limitations of economic information and models.
 Assess economic information and the strengths and weaknesses of arguments.
 Recognise that some economic decisions involve consideration of factors such as priorities and
value judgements.
 Communicate reasoned judgements, conclusions, and decisions, based on the arguments.

Table A: AO1 Knowledge and understanding and AO2 Analysis
Use this table to give marks for each candidate response for AO1 Knowledge and understanding and
AO2 Analysis for Questions 2(b), 3(b), 4(b) and 5(b).
Level Description Marks

3  A detailed knowledge and understanding of relevant economic 6–8
concepts are included, using relevant explanations. Explanations are
supported by examples, where appropriate.
 The response clearly addresses the requirements of the question and

explains economic issues, and fully develops these explanations.
 Analysis is developed and detailed and makes accurate and relevant use of
economic concepts and theories. Where necessary, there is accurate and
relevant use of analytical tools such as diagrams and formulae, and these
are fully explained.
 Responses are well-organised, well-focused and presented in a logical and

coherent manner.
2  Knowledge and understanding of some relevant economic concepts are 3–5
included, using explanations and examples that are limited, over-generalised
or contain inaccuracies.
 The response addresses the general theme of the question and the relevant
economic issues, with limited development.
 Analysis is generally accurate with some development but little detail. Uses
analytical tools such as diagrams and formulae where necessary. Use of
these tools is partially accurate or not fully explained.
 Responses are generally logical and coherent but are sometimes lacking in
focus or organisation.
1  A small number of relevant knowledge points are included, and the 1–2
response is limited by significant errors or omissions.
 The response has little relevance to the question.
 Analysis where provided is largely descriptive. Use of analytical tools such as

diagrams and formulae, where necessary, may contain significant errors or
be omitted completely.
 Responses show limited organisation of economic ideas.

0 No creditable response. 0

from 2023
Table B: AO3 Evaluation
Use this table to give marks for each candidate response for AO3 Evaluation for Questions 2(b),
3(b), 4(b) and 5(b).
Level Description Marks

2  Provides a justified conclusion or judgement that addresses the specific 3–4
requirements of the question.
 Makes developed, reasoned and well-supported evaluative comment(s).

1  Provides a vague or general conclusion or judgement in relation to the 1–2
question.
 Makes simple evaluative comment(s) with no development and little

supporting evidence.
0 No creditable response. 0

Section A Data response
Question Answer Marks

Follow the point-based marking guidance at the top of this mark scheme.
1(a) Using Fig. 1.1, compare the US inflation rate between July and 2
December 2020 with that between January and June 2021.
 During the period between July 2020 and December 2020, the trend has
been slowly upward / relatively stable / had minor fluctuations / from 1.0%
to 1.4% (1)
 From January 2021 to June 2021 the trend has been more rapidly upward
/ from 1.4% to 5.4%. (1)
N.B 2nd mark should only be awarded if there is some KU that the rate of
change is greater in the second period.
Guidance:
The trend in the two periods needs to be compared, not every change from
one month to the next.
1(b) Using the information provided, explain what is meant by ‘the US 2

government’s economic stimulus package’.
 An economic stimulus package is an example of expansionary fiscal

policy / demand management policy / the aim of which is to increase
aggregate demand (1)
 The package involved the spending by the US government of an
additional US$6 trillion in 2020-2021/this involved a deficit budget
balance of minus 12.7% of GDP in mid-2021. (1)
Guidance: Accurate reference to the data is required for the second mark.

1(c) Consider the extent to which an increase in interest rates could from 2023
4
reduce the rate of inflation in the US.
 An increase in interest rates will increase the cost of borrowing / or
increase the incentive to save / or lead to an increase in the
exchange rate (1)
 This is likely to lead to a fall in C and I / X-M because of the fall in
spending /reduction in exports / rise in imports (1)
 Appreciation of the exchange rate may reduce the extent of import
cost-push inflation (1)
 Overall fall in AD is likely to lead to a fall in the rate of inflation (1)
Max 3 marks
Evaluation
 The demand for borrowing funds may not be interest elastic/consumer

and business confidence may remain high (1)
 The contribution to a reduction in the rate of inflation will largely depend
on the degree to which it is demand-pull inflation. (1)
 There are other factors contributing to the rise in inflation from the cost
side, such as the increase in the cost of shipping goods. (1)
Max 1 mark
Please use a text box to show mark split e.g., 3,1


1(d) With the help of an AD/AS diagram, assess whether the rising inflation 6
rate in the US has been caused by changes to the demand side or
changes to the supply side of the economy.
Up to 4 marks for explanation/analysis:
 AD/AS diagram: Correct labelling of vertical axis (price level) and

horizontal axis (real GDP/real output). (1) Movement of AD curve to the
right and AS curve to the left, showing a rise in the price level. (1) (Up to
2 marks for the diagram)
 Explanation/analysis of how the rise in inflation may be caused by an
increase in aggregate demand (1) and a decrease in aggregate
supply (1). This should be correctly applied to the data.
(Up to 2 marks)
Up to 2 marks for evaluation:
 Relevant evaluation which considers both AD and AS and weighs up the

factors involved in each. (1)
 A justified conclusion on the extent to which inflation in the US has been
caused by changes to the demand side or changes to the supply side of
the economy N.B this may include the comment that it is clearly a
combination of both factors (1) but there is insufficient information within
the data to fully answer which has had the greatest impact (1)
 N.B. no marks are available for evaluation if ONLY AD OR AS are
discussed
Please use a text box to show the mark split e.g., 2,1,0

1(e) Assess the possible consequences of a rising rate of inflation for a from 2023
6
country such as the US.
Up to 4 marks for explanation/analysis:
 Possible negative consequences explained, such as the

uncompetitiveness of exports leading to a worsening of the current
account of the balance of payments, shoe leather costs arising from
searching for better returns, menu costs arising from continually
changing prices, planning difficulties arising from the uncertainty caused
by inflation and a redistribution of income, e.g., those on fixed incomes
will lose out. (Up to 2 marks)
 Possible positive consequences explained, such as an increase in
borrowing arising from debt being less in real terms, an increase in the
profits of firms, possibly leading to more workers being employed, and
an increase in the value of assets, such as property. (Up to 2
marks)
Max 4 marks
Up to 2 marks for evaluation:
 Relevant evaluation such as in relation to the extent of the increase in

inflation and whether it is higher than other countries, the price elasticity
of demand for exports, whether the increase in prices is higher than the
increase in the costs of production faced by firms and whether the rise in
inflation is anticipated or not.
 A justified conclusion on the possible consequences, both negative and
positive of a higher rate of inflation for a country such as the US.
Please use a text box to show the split in marks e.g., 2, 1, 2
© UCLES 2020 Page 10 of

16
Section B Microeconomics essay

EITHER
2(a) Explain the functions of price in resource allocation and consider the 8
importance of these functions in relation to the potential effectiveness
of a market economy.
Follow the point-based marking guidance at the top of this mark scheme and
award:
 up to 3 marks for AO1 Knowledge and understanding up to 3 marks
for AO2 Analysis
 up to 2 marks for AO3 Evaluation.
AO1 Knowledge and understanding (max 3 marks)
A clear knowledge and understanding of at least two functions of price in

resource allocation:
 rationing (1)
 signalling (transmission of preferences) (1)
 incentivising (1)
Two functions well explained can gain 3 marks; 1 function explained can
achieve a maximum of 1 mark.
AO2 Analysis (max 3 marks)
An analysis of the importance of rationing (1), signalling (transmission of

preferences) (1) and incentivising (1) to the operation of a market economy.
N.B this must be in the context of a market economy.
AO3 Evaluation (max 2 marks)
Offers a valid judgement on the importance of at least two functions in relation

to the potential effectiveness of a market economy (1) to reach a justified
conclusion. (1)
Please use a text box to show the mark split e.g., 2 2 1
AO1 Knowledge and understanding 3

AO2 Analysis 3
AO3 Evaluation 2
© UCLES 2020 Page 11 of

16

2(b) Assess whether all market economies should become mixed 12
economies.
Use Table A: AO1 Knowledge and understanding and AO2 Analysis

and Table B: AO3 Evaluation to mark candidate responses to this
question.
AO1 and AO2 out of 8

marks. AO3 out of 4 marks.
Indicative content
Responses may include:
AO1 Knowledge and understanding and AO2 Analysis

 NO: Explanations of why market economies should remain as they are
e.g., because there is no (or minimal) government intervention, decisions
are taken on the basis of demand and supply, competition is encouraged
and so production is more efficient, and consumers and producers act
on their own self-interest.
 YES: Explanations of why market economies should become mixed
economies e.g., because in a market economy there is non-provision of
public goods, the under-consumption of merit goods, the over-
consumption of demerit goods and the existence of markets where
prices are too low, too high, or too unstable.
A one-sided response can only gain a maximum of Level 2.
AO3 Evaluation
Evaluation of whether all market economies should become mixed economies

leading to a justified conclusion.
Points to consider may include whether governments should provide public

goods, merit goods, reduce the provision of demerit goods, intervene in the
price mechanism etc.
A one-sided response cannot gain any marks for evaluation.
Please use a text box to show both the levels awarded plus the
mark split e.g., L2-5 L1-1
Accept all valid responses.
AO1 Knowledge and understanding and AO2 Analysis 8

AO3 Evaluation 4


OR
3(a) Explain the possible economic reasons for inequality of income and 8
consider whether inequality of income can benefit an economy.
award:
up to 3 marks for AO1 Knowledge and
understanding up to 3 marks for AO2 Analysis
up to 2 marks for AO3 Evaluation.
A clear knowledge and understanding of at least two possible economic

reasons for inequality of income, such as whether a person is in employment
or unemployed (1), the skills, qualifications and experience of different workers
in various occupations and economic sectors (1), whether workers are
employed in the public sector or the private sector (1), whether they are
employed full-time or part-time (1), the provision of transfer payments (1) and
the level and type of taxation. (1) N.B. the question does not stipulate how
many reasons should be referred to so two reasons well explained can
gain up to 3 marks. 1 reason explained can achieve a maximum of 1 mark.
Max 3 marks
The focus of this analysis must be on whether income inequality

generates benefits to an economy or not.
Points may include:

 Incentivising workers leading to higher levels of productivity
 Encourages enterprise
 Encourages workers to retrain/reskill
 Demotivates those on the lowest incomes and an increase in crime
 Increased government spending on transfer payments leading to an
opportunity cost
Max 3 marks

Offers a valid judgement on the extent to which inequality of income can
benefit an economy (1) to reach a conclusion. (1)
Please use a text box to show the mark split e.g., 2,2 1

AO2 Analysis 3

AO3 Evaluation 2


3(b) With the help of a diagram, assess whether the introduction of a 12
minimum price in a market can be justified.

question.

Indicative content
Diagram of a minimum price in a market, correctly labelled with an equilibrium

price and an equilibrium quantity and showing the existence of a minimum price
above what would be the case with no government intervention.
Explanation of the potential advantages and benefits of a minimum

price, such as making the prices of demerit goods more expensive to
discourage consumption and protecting the incomes of producers in
that market.
Explanation of the potential disadvantages and limitations of a

minimum price, such as the creation of excess supply and the greater
likelihood of producers becoming less efficient, and of why the
introduction of a minimum price might be ineffective.
NB: Omission of a diagram/inaccurate diagram can only achieve a

maximum of Level 2.
AO3 Evaluation
 Evaluation of the potential effectiveness of the introduction of a minimum

price in a market.
 Evaluation may contain an assessment of alternative policies but
may only be rewarded if the advantages and disadvantages of
minimum pricing policy have been discussed.
 In conclusion, whether the introduction of a minimum price in a
market can be justified.

AO3 Evaluation 4

Section C Macroeconomics essay

EITHER
4(a) Explain the circular flow of income in a closed economy and consider 8
the extent to which the circular flow of income changes as an
economy becomes an open economy.
award:
A clear knowledge and understanding that the circular flow of income in a

closed economy involves households, firms, and the government (1) and
has injections of I and G and leakages/withdrawals of S and T (1), so that
equilibrium income is where I + G = S + T (1).
An analysis of how the circular flow of income changes as an economy

becomes an open economy, with the introduction of participation in the
international economy (1) through the injection of X and the
leakage/withdrawal of M (1), so that equilibrium income (is) (now
becomes) where I + G + X = S + T + M (1).
Offers a valid judgement on the extent to which the circular flow of income
changes as an economy becomes an open economy depending on the
importance of international net trade (1) to reach a conclusion. (1)

AO2 Analysis 3
AO3 Evaluation 2


4(b) Assess whether the consequences of economic growth for an economy 12
are always positive.

question.

Indicative content
 The positive consequences of economic growth: an improvement in

the standard of living, a reduction in the rate of unemployment, an
increase in incomes, an increase in the level of aggregate demand, a
possible reduction in income inequality, higher tax revenues which a
government could spend on improving public services (such as
education and healthcare), and an increase in business confidence
leading to greater investment.
 The negative consequences of economic growth: a possible depletion of

non-renewable natural resources and damage to the environment, such
as through various types of pollution, an unequal sharing of the benefits of
economic growth among a population leading to an increase in income
inequality and a possible reduction in the quality of life of people through
longer working hours and a reduction in the amount of leisure time, plus a
shift towards more capital-intensive production. Answers may also refer to
the dangers of inflationary pressure.
AO3 Evaluation
Points to consider may include:

 The degree to which the potential benefits of economic growth are
equally shared among a population.
 The extent to which any shift towards more capital- intensive
production affects the level of unemployment
 Whether long-term economic growth brings about a short-term cost
as resources are used to produce capital goods rather than
consumer goods
 The extent to which the economic growth is sustainable
 Which leads to a justified conclusion on whether the consequences
of economic growth for an economy are always positive
AO3 Evaluation 4


OR
5(a) With the help of a diagram, explain what is meant by an 8
appreciation of a floating exchange rate and consider whether a
country can only benefit from the appreciation of its currency.
award:
A clear knowledge and understanding of the meaning of an appreciation of an

exchange rate in a floating exchange rate system i.e., the exchange rate rises
according to supply and demand of the currency (1). A diagram showing an
appreciation of a currency: correct labelling of the axes (the vertical axis
needs to be labelled either in terms of two currencies or as exchange rate) (1)
and a rise in the value of a currency by a rightward shift of the demand curve
and/or a leftward shift of the supply curve with the new equilibrium price
shown together with an explanation of a possible cause of either shift (1).
An analysis of the potential advantages of an appreciation, such as a

reduction in the prices of imports, both of finished goods and of raw
materials and component parts, reducing inflationary pressures in an
economy. An analysis of the potential disadvantages of an appreciation,
such as an increase in the price of exports making them less competitive.
N.B maximum mark of 2 if only advantages or disadvantages discussed.
Offers a valid judgement on whether the potential advantages of an

appreciation of an exchange rate always outweigh the potential
disadvantages (1) to reach a conclusion. (1) N.B the significance of
elasticities and the MLC may be rewarded but must not be expected as they
are A2 topics.

AO2 Analysis 3
AO3 Evaluation 2


5(b) Assess whether supply-side policies are the most effective way to 12
correct a deficit on the current account of the balance of payments of
an economy.
question.

Indicative content
Successful supply-side policies will cause a rightward shift in the long-run AS
curve, reflecting more efficient production. This would make a country’s
products more competitive in international markets and so there is likely to be
an increase in net exports, correcting a deficit in the current account. Supply-
side policies could include improvements in training and education, making
labour markets more flexible, reductions in the powers of trade unions, an
increase in competition and a reduction in rules and regulations.
Potential disadvantages of supply-side policies are that they are essentially a

long-run solution and so may take a relatively long period of time to have an
impact, such as improvements in training and education. Some of the policies
could be quite expensive and so would involve the government in
considerable expenditure, money which could have spent elsewhere (giving
rise to the issue of opportunity cost).
Guidance: There are a number of alternative approaches to answering this
question. At the simplest level, analysis and evaluation may focus on an
assessment of the effectiveness of supply side policies only. Furthermore,
this may be expanded to include a direct comparison with the effectiveness of
alternative policies such as fiscal, monetary or protectionist policies. In
addition, such an assessment may simply be part of evaluation. However, if
supply side policies are ignored or receive scant attention then only a Level 2
mark may be awarded.
AO3 Evaluation
Points to consider may include:
the cause of the deficit, the cost and ease of introducing various policies, the
possible unintended consequences of introducing policies etc. leading to a
justified conclusion as to whether supply-side policies would be the most
effective way to correct a deficit in the current account of the balance of
payments of an economy.
Accept all valid responses.


AO1 Knowledge and Understanding and AO2 Analysis 8
AO3 Evaluation 4

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Cambridge International AS & A Level

This document has 16 pages.

© UCLES 2020 [Turn over

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

Marks must be awarded positively:

© UCLES 2020 Page 2 of 16

Guidance on using levels-based mark schemes.

Social Sciences and Humanities Subject Specific Marking Principles

1 Components using point-based marking:

From this it follows that we:

2 Presentation of mark scheme:

© UCLES 2020 Page 3 of 16

AO1 Knowledge and understanding.

© UCLES 2020 Page 4 of 16

Table A: AO1 Knowledge and understanding and AO2 Analysis

Level Description Marks

 The response clearly addresses the requirements of the question and

 Responses are well-organised, well-focused and presented in a logical and

 The response has little relevance to the question.

 Analysis where provided is largely descriptive. Use of analytical tools such as

 Responses show limited organisation of economic ideas.

© UCLES 2020 Page 5 of 16

Level Description Marks

 Makes developed, reasoned and well-supported evaluative comment(s).

 Makes simple evaluative comment(s) with no development and little

© UCLES 2020 Page 6 of 16

Section A Data response

Question Answer Marks

1(b) Using the information provided, explain what is meant by ‘the US 2

 An economic stimulus package is an example of expansionary fiscal

© UCLES 2020 Page 7 of 16

 The demand for borrowing funds may not be interest elastic/consumer

Please use a text box to show mark split e.g., 3,1

© UCLES 2020 Page 8 of 16

Question Answer Marks

Up to 4 marks for explanation/analysis:

 AD/AS diagram: Correct labelling of vertical axis (price level) and

Up to 2 marks for evaluation:

 Relevant evaluation which considers both AD and AS and weighs up the

© UCLES 2020 Page 9 of 16

Up to 4 marks for explanation/analysis:

 Possible negative consequences explained, such as the

Up to 2 marks for evaluation:

 Relevant evaluation such as in relation to the extent of the increase in

Please use a text box to show the split in marks e.g., 2, 1, 2

© UCLES 2020 Page 10 of

Section B Microeconomics essay

Question Answer Marks

AO1 Knowledge and understanding (max 3 marks)

A clear knowledge and understanding of at least two functions of price in

AO2 Analysis (max 3 marks)

An analysis of the importance of rationing (1), signalling (transmission of

AO3 Evaluation (max 2 marks)

Offers a valid judgement on the importance of at least two functions in relation

Please use a text box to show the mark split e.g., 2 2 1

AO1 Knowledge and understanding 3

© UCLES 2020 Page 11 of

Question Answer Marks