Economic management — Question 12

QCAA sample response and mark allocation

Microeconomic reforms aim to improve the productivity and efficiency of the

• identifies the aim of MER is to improve efficiency [1 mark]

economy, which means more goods and services can be produced with the same or less resources. The economy must grow at a higher rate than the

• demonstrates an understanding of the link between GDP and productivity

population each year, so that GDP per capita increases. An example of a MER

[1 mark]

is the removal of competition entry barriers so that businesses have more impetus to increase production efficiency.

• explains why the economy needs to grow at a rate greater than the population

[1 mark]

growth

• provides an example of how MER improves efficiency or productivity[1 mark]