Economics SL Paper 1

Question 2
Part A

• Q: Explain the types of inflation using aggregate demand/supply graphs. (10 marks)
• A: I defined inflation and illustrated demand-pull and cost-push inflation with the New Classical Model. (30 minutes)
  

Part B

• Q: Evaluate the view that governments should treat inflation as their primary concern. (15 marks)
  
• I supported the view and cited inflation being a cause of low future production/investment (leading to unemployment) and growing national debt (due to increased imports and expensive domestic goods). I also described the difficulties to be encountered by governments who want to correct the effects of inflation after it has already been allowed to run its course. (30 minutes)
  

I wasted way too much time on the first part and didn't leave myself enough time to think out my response for the second part. I explained too much about each and every step of the two different causes of inflation. I also had next to no real-life examples to relate the question to. I probably should have done the first question which was more familiar to me (market failure was the focus of that question) but I didn't because it mentioned a term that I wasn't familiar with ("market signals"). Oh, and did I mention that I misused the term "a priori" thinking it meant something like "after the fact"? Gah.
I don't think today's paper went exceptionally well but I don't think I completely ruined my chances of getting that level 7... If tomorrow's paper goes better (and it should since the structure of questions is something I actually practiced more on) and if Messere liked my commentaries then I'll be alright. I'm totally going to choose the question about development economics tomorrow. Easy spawn-kill-esque marks.
...Damn it! Part A, we're through.

EDIT: Out of curiosity I went and looked through some of my Economics notes to find a reading about inflation and its effects/costs to society. Lo and behold, diminished productivity from uncertainty and deficits in the current account (the international trade balance to be exact). And so it turns out the two things I suggested would probably happen with rampant inflation were actually correct and "expected" responses to inflation. And so now I don't feel so insecure about the state of my first IB paper. I got psyched but I'm saved--probably--by Mr. Messere's constant and repetitious drilling of cause-effect relationships into my head. Either that or I lucked out and need to review some more. I'll do that now.