WEC12 Vocabulary Precision List + Command Word Decoder

Two Documents Combined | VERIDIAN V6 Economics | WEC12/01

14 min read

#PART A — VOCABULARY PRECISION LIST

#50 Common Imprecisions and Their Correct Economic Replacements

#WHY THIS EXISTS

Vocabulary imprecision signals weak understanding to the examiner even when the underlying economics is correct. From examiner reports: "candidates should use precise economic terminology rather than informal language." Each imprecision below risks costing an AO1 mark.

#THE 50 IMPRECISIONS — ECONOMICS EDITION

#GDP / GROWTH

Imprecise	Correct	Why it matters
"Prices go up"	"The general price level rises / CPI inflation accelerates"	"Prices" could mean a single price; general price level is the macroeconomic concept
"Economy does better / improves"	"Real GDP rises / economic growth accelerates"	"Better" is not an economic term
"Economy shrinks / gets smaller"	"Real GDP contracts / negative economic growth occurs"	Precision required for AO1
"The country earns more"	"National income (GDP/GNI) rises"	"Earns" implies GNI; "produces" implies GDP — choose carefully
"When output falls for two quarters"	"Two consecutive quarters of negative real GDP growth (recession)"	The technical definition must be stated precisely
"GDP goes up by a lot"	"Real GDP grows at [X]% — above the long-run trend rate of [Y]%"	Quantification and comparison to trend is the economic precision
"The economy is doing well"	"The economy is operating close to full employment output (Yf) with positive GDP growth"	"Doing well" is meaningless to an examiner

#INFLATION

Imprecise	Correct	Why it matters
"Inflation goes up"	"The rate of CPI inflation accelerates / the price level rises more quickly"	Rate vs level distinction
"Prices are falling"	"The general price level is falling (deflation) / the rate of inflation is negative"	Don't say "prices" — say "price level"
"Inflation slows down"	"The rate of inflation is decelerating (disinflation) — prices still rise but more slowly"	Disinflation ≠ deflation; extremely common confusion
"Inflation is bad for everyone"	"Inflation redistributes real income from creditors to debtors and erodes real wages for workers on fixed nominal contracts"	Specific incidence matters for AO3
"The government controls inflation"	"The central bank adjusts the base rate to influence aggregate demand and control CPI inflation toward its target"	Government ≠ central bank; imprecise attribution
"Prices rise because of high demand"	"Excess aggregate demand relative to productive capacity generates demand-pull inflation"	Mechanism must be named
"Prices rise because of higher costs"	"Rising factor costs — particularly energy and raw material prices — shift SRAS leftward, generating cost-push inflation"	Cost-push mechanism requires SRAS shift

#UNEMPLOYMENT

Imprecise	Correct	Why it matters
"People lose their jobs"	"Cyclical (demand-deficient) unemployment rises as firms reduce output in response to falling AD"	Type of unemployment matters
"Unemployment is bad"	"Unemployment imposes costs: loss of household income, reduced consumption, higher government welfare expenditure, and potential skill atrophy among the long-term unemployed"	Specific costs required for AO3
"Getting rid of unemployment"	"Reducing unemployment toward the natural rate (NAIRU)"	Cannot reduce to zero — NAIRU is the floor
"Structural unemployment happens when jobs change"	"Structural unemployment arises from a skills mismatch between the qualifications demanded by employers and those possessed by available workers — caused by technological displacement or industrial restructuring"	Mechanism must be stated
"Frictional unemployment is people between jobs"	"Frictional unemployment is short-term unemployment arising from the time taken for workers to search for and match with available vacancies"	"Search" and "match" are the key words

#AGGREGATE DEMAND

Imprecise	Correct	Why it matters
"People spend more"	"Consumer expenditure (C) increases"	"People" → "consumers" → "consumer expenditure"
"Companies invest more"	"Firms increase capital investment (I)"	"Companies" → "firms"; "invest more" → "increase capital investment"
"Government spends more"	"Government expenditure (G) increases, raising the G component of AD = C+I+G+X−M"	Formula reference signals AO1 understanding
"More demand in the economy"	"Aggregate demand (AD) rises / AD shifts rightward"	AD has a specific definition — not just "more demand"
"Trade improves"	"Net exports (X−M) increase / the current account position improves"	Specify the direction and the component
"AD goes up"	"AD shifts rightward from AD₁ to AD₂"	Reference to the diagram model scores better

#MONETARY POLICY

Imprecise	Correct	Why it matters
"Interest rates go up/down"	"The central bank raises/reduces the base rate by [X] basis points / percentage points"	Specify which rate (base rate); who moves it (central bank)
"Printing money"	"The central bank creates new money to purchase financial assets (quantitative easing)"	"Printing money" is colloquial — always use the mechanism
"Money becomes cheaper/more expensive"	"The cost of borrowing increases/decreases as the base rate rises/falls"	"Money is cheaper" is imprecise — cost of credit is the correct term
"Banks lend more"	"Commercial banks increase credit creation / loan issuance to households and firms"	Mechanism precision
"QE stimulates the economy"	"QE increases commercial bank reserves, reduces long-term interest rates through asset price inflation, and encourages portfolio rebalancing toward riskier assets — stimulating both investment (I) and consumption (C)"	QE mechanism must be stated, not just named
"The government controls interest rates"	"The central bank — typically operationally independent of the government — sets the base rate to achieve its inflation target"	Central bank independence is a key institutional detail

#FISCAL POLICY

Imprecise	Correct	Why it matters
"Government spends on stuff"	"Government expenditure (G) rises, directly increasing the G component of AD"	Reference to AD formula signals understanding
"Tax cuts help the economy"	"Reductions in [income/corporation] tax increase household disposable income, raising consumer expenditure (C) and/or increasing firms' post-tax profits, incentivising investment (I)"	Specify which tax; specify the transmission
"The multiplier makes things bigger"	"The fiscal multiplier (k = 1/MPW) amplifies the initial injection through successive rounds of household spending"	Formula required
"Budget deficit is bad"	"A fiscal deficit may: (1) require debt financing, increasing sovereign borrowing costs; (2) crowd out private investment; (3) raise future tax burden"	Specific channels required
"Austerity"	"Contractionary fiscal policy — reducing government expenditure or raising taxes to reduce aggregate demand and the fiscal deficit"	Define the economic term

#SUPPLY-SIDE

Imprecise	Correct	Why it matters
"Supply goes up"	"The [SRAS/LRAS] curve shifts rightward"	Distinguish SRAS vs LRAS — they have completely different causes and effects
"The economy produces more"	"The productive capacity of the economy expands / LRAS shifts rightward / potential output rises"	Precision about which type of production change
"Workers become more productive"	"Labour productivity increases — each worker produces more output per unit of time — reducing unit labour costs"	Unit labour cost is the key economic link
"Deregulation helps businesses"	"Deregulation reduces compliance costs and barriers to entry, increasing competitive pressure and incentivising productive efficiency"	The mechanism through which deregulation operates

#EXCHANGE RATES

Imprecise	Correct	Why it matters
"Exchange rate goes up"	"The exchange rate appreciates / sterling strengthens against [currency]"	Appreciates/depreciates — not up/down
"Currency gets weaker"	"The exchange rate depreciates — each unit of domestic currency buys fewer units of foreign currency"	Define the direction and mechanism
"Exports become cheaper"	"Depreciation reduces the foreign-currency price of domestic exports, increasing their price competitiveness in international markets"	The transmission mechanism must be stated
"Trade gets better"	"Net exports (X−M) improve / the current account deficit narrows"	Specific component and direction

#LEVEL DESCRIPTOR LANGUAGE

Student language	Examiner-preferred language
"This is a good policy"	"This policy is effective at achieving [specific macroeconomic objective]"
"It depends on many factors"	"The effectiveness depends specifically on [named condition]"
"This may cause problems"	"This risks [specific macroeconomic outcome — e.g. demand-pull inflation, current account deterioration]"
"It has advantages and disadvantages"	"The benefits [X and Y] outweigh the costs [Z] only if [condition]"
"The economy will grow"	"Real GDP will rise, closing the negative output gap and reducing cyclical unemployment"

#PART B — COMMAND WORD DECODER

#What Each Command Word Requires at Every Level, With Worked Examples

#DEFINE (2 marks)

AOs: AO1 only What the examiner awards: 2 × 1-mark points for two distinct components What scores zero: Examples instead of definition; single idea restated; evaluation added

Level breakdown:

Score	What it looks like
0/2	Example given instead of definition; completely incorrect
1/2	One correct component; second is either absent or repeats the first
2/2	Two genuinely distinct definitional components, both accurate

Model (GDP): "GDP is the total monetary value of all final goods and services produced within a country's borders [1], over a given time period, typically one year [2]."

Common 1/2 response: "GDP is the total output of a country and measures how much the country produces." → Both halves say "total output" — only 1 mark.

#CALCULATE (2 or 4 marks)

AOs: AO2 (2-mark) / AO1+AO2 (4-mark) What earns marks: Formula stated → correct figures selected → working shown → correct answer with units

Score	What it looks like
0	Blank, or completely wrong formula
1/4	Formula stated but wrong figures or arithmetic error
2/4	Correct formula and figures; error in working
3/4	Correct method throughout; minor arithmetic slip in final step
4/4	All correct: formula, figures, working, answer with units

Model (Multiplier): Multiplier = 1/(1−MPC) = 1/(1−0.75) = 1/0.25 = 4 "A £10bn increase in government spending will increase national income by £10bn × 4 = £40bn."

#DRAW (4 marks)

AOs: AO1+AO2 What earns marks: Correct axes (1) + correct curves labelled (1) + shift direction (1) + both equilibria with dotted lines (1) What scores zero: Blank diagram; wrong diagram type; axes unlabelled

Score	What it looks like
0/4	Blank or wrong diagram
1/4	Axes only, or one axis
2/4	Axes + curves labelled but no equilibria; or shift missing
3/4	Mostly correct but one missing element (e.g. no dotted lines to axes)
4/4	All 5 elements: axes, curves, shift with arrow, original equilibrium P₁Y₁, new equilibrium P₂Y₂

#EXPLAIN (4 marks)

AOs: AO1+AO2+AO3 What earns marks: K (knowledge) → A (application to extract) → An₁ → An₂ (two-stage chain)

Level	Marks	What it looks like
Level 1	1	Knowledge only. No chain. No application. "Interest rates affect spending."
Level 2	2–3	Knowledge + 1-stage chain OR knowledge + application but no chain.
Full marks	4	Knowledge + specific extract application + 2-stage analytical chain reaching consequence. No evaluation.

Model: "A rise in the base rate increases the cost of borrowing for households. [K] In Country X, where the rate rose from 1.5% to 3.0%, [A] the cost of variable-rate mortgages doubles — reducing households' disposable income [An₁] and therefore consumer expenditure, shifting AD leftward. [An₂]"

#ANALYSE (6 marks)

AOs: AO1+AO2+AO3 — NO EVALUATION What earns marks: 2 × complete K+A+An chains Fatal trap: Writing evaluation earns zero AO4 marks AND wastes 2–3 minutes

AO	Marks	What earns it
AO1	2	Two accurate knowledge/mechanism statements with correct terminology
AO2	2	Two applications using specific extract data — used not quoted
AO3	2	Two analytical chains reaching macroeconomic significance

Level breakdown:

Score	What it looks like
1–2	Generic. No extract data. No developed chain.
3–4	Extract data used in one chain. Analysis partly developed.
5	Both chains present; one complete, one truncated before significance.
6	Two complete chains with extract data and macro significance. Zero evaluation.

#EXAMINE (8 marks)

AOs: AO1+AO2+AO3+AO4 (AO4 = 2 marks ONLY) What earns marks: Same as Analyse for 6 marks PLUS 2-sentence evaluation (mechanism + condition) Fatal trap: Writing full evaluation (bilateral, conclusion) earns only 2 AO4 marks regardless of length

Component	Marks	Standard
KAA Chain 1	3	K+A+An, same as Analyse
KAA Chain 2	3	K+A+An
Evaluation (2 sentences)	2	Specific limitation + condition "only if..."

Level breakdown:

Score	What it looks like
1–3	Weak chains. Generic. No extract data.
4–5	One good chain. One weak. No evaluation OR generic evaluation.
6	Two solid chains. Evaluation present but no condition stated.
7	Two solid chains. Evaluation with mechanism. No explicit condition.
8	Two solid chains with extract data and macro significance. Evaluation: specific mechanism + explicit condition.

#DISCUSS (14 marks) — KAA 8 + Evaluation 6

AOs: Full levels-based marking across both bands

KAA Level	Marks	Descriptor
L1	1–2	Isolated facts. No chains.
L2	3–5	2-stage chains. Country named, no figure.
L3	6–7	3–4 stage chains. Extract data embedded. Macro significance.
L4	8	Both chains at L3 standard. Multiple data points. Both reach significance.

Eval Level	Marks	Descriptor
L1	1–2	Generic "it depends." No mechanism.
L2	3–4	Challenge present with partial chain. Conclusion UNCONDITIONAL.
L3	5–6	Complete chain + context reference + CONDITIONAL JUDGEMENT with "only if."

What separates 12 from 14: The conditional judgement is present (L3 eval secured), and both KAA chains reach L4 standard simultaneously. A strong first chain with a weak second = L3 KAA top, not L4.

#EVALUATE / TO WHAT EXTENT (20 marks) — KAA 12 + Evaluation 8

AOs: Full levels-based, two independent scales

KAA Level	Marks	What moves you there
L1	1–3	Facts. Pure description.
L2	4–6	2-stage chains. Country without data.
L3	7–9	3–4 stage chains. Specific extract data. Both mechanisms present.
L4	10–12	4–5 stage chains. Own-country data (specific figure, year). Both chains at this standard.

Eval Level	Marks	The governing rule
L1	1–3	Generic. No mechanism. Lists.
L2	4–6	Genuine challenge. Partial chain. Unconditional conclusion.
L3	7–8	Complete eval chains. Conditional judgement. Extract data in conclusion. Counter-condition named.

What separates 18 from 20: At 18: both chains strong, conditional judgement present but one chain slightly thinner or counter-condition not explicitly named. At 20: both chains at full L4 standard, two distinct evaluation moves each with mechanism and condition, conditional judgement with all 5 elements (weigh + condition + context data + decisive recommendation + counter-condition).

VERIDIAN V6 Economics | WEC12 Vocabulary Precision List + Command Word Decoder | Pearson Edexcel IAL Unit 2

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