Economics Masterclass: The Top 5 Macro Diagrams You MUST Know for CIE 9708 Paper 4
Updated: Sep 2
If you're sitting the CIE 9708 Paper 4 exam, there is one universal truth: you cannot score above a C without accurate diagrams.
The examiners explicitly state in the mark scheme that diagram accuracy is worth up to 4 marks per essay. That's the difference between a B and an A*. Yet most students either skip the diagram entirely, or draw something so vague that it earns zero marks.
In this masterclass, we break down the 5 most important macro diagrams that appear in virtually every Paper 4 sitting, and explain exactly what the examiner wants to see on each one.
1. 📈 The AD/AS Model (Demand-Pull Inflation)
This is the single most important diagram in macroeconomics. It appears in questions about inflation, fiscal policy, monetary policy, supply-side policy, and economic growth.
What you must show:
A clearly labeled Price Level (PL) on the Y-axis and Real GDP (Y) on the X-axis.
A downward-sloping Aggregate Demand (AD) curve.
An upward-sloping Short-Run Aggregate Supply (SRAS) curve.
A vertical Long-Run Aggregate Supply (LRAS) curve at full employment output (Yf).
The shift: AD1 → AD2 (rightward), with arrows showing the movement from P1 to P2.
Common mistake: Drawing AD as a straight line. The examiner prefers a smooth curve that shows diminishing responsiveness at higher price levels.
2. 📉 The AD/AS Model (Cost-Push Inflation)
This is the mirror image of Diagram 1, but students consistently confuse the two.
What you must show:
SRAS shifting leftward (SRAS1 → SRAS2), NOT AD shifting.
The result: Price level rises (P1 → P2) AND output falls (Y1 → Y2).
This is the key difference: cost-push inflation causes stagflation (higher prices + lower output), while demand-pull inflation typically increases output.
Common mistake: Shifting AD instead of SRAS. This immediately tells the examiner you don't understand the difference.
3. 🔄 The Keynesian AS Curve
For questions about unemployment, the liquidity trap, or fiscal policy effectiveness, the Keynesian AS curve is essential.
What you must show:
A horizontal section (spare capacity / mass unemployment).
An upward-sloping section (approaching full employment).
A vertical section (full employment, the classical range).
AD shifting rightward in the horizontal section increases output with NO inflation. This is the Keynesian justification for fiscal stimulus.
4. 💱 The Exchange Rate Diagram
This appears in every single Paper 4 question about trade, the balance of payments, or monetary policy in an open economy.
What you must show:
Exchange Rate on the Y-axis, Quantity of Currency on the X-axis.
Downward-sloping Demand for currency curve.
Upward-sloping Supply of currency curve.
The shift (e.g., Supply shifting right → depreciation, or Demand shifting right → appreciation).
5. 📊 The Phillips Curve
This is the secret weapon for evaluation paragraphs. Almost no students use it, but the examiners love it.
What you must show:
Inflation Rate on the Y-axis, Unemployment Rate on the X-axis.
The short-run Phillips Curve showing the trade-off.
The long-run vertical Phillips Curve at the Natural Rate of Unemployment (NRU).
Explain why the trade-off breaks down in the long run (adaptive expectations).
🎯 Want the Full Diagrams + Model Answers?
These descriptions tell you what to draw, but can you draw them accurately under exam pressure?
Our Ultimate CIE 9708 Essay Bank contains every single one of these diagrams drawn with mathematical precision, embedded directly inside fully-graded model answers with Examiner Commentary.
These are on the portal for free, with each of these diagrams drawn on the topic page it belongs to, with the answer that uses it. There is no payment and no account. Open the free notes.
Keep studying in the free Economics Portal
Go from this guide into syllabus-mapped revision notes, targeted practice and worked explanations — free to start.