A-LevelEconomicsThe macroeconomy9708/12 · May/June 2022 · Q271 Mark

The diagram shows a shift in a country's short-run aggregate supply curve from SRAS₁ to SRAS₂. The country imports oil. Why might an increase in the world price of oil have caused this shift?

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

Arise in inflation is expected.

BConsumers face a fall in their disposable income.

CDomestic firms' costs have increased.

DThe government reduces tax on oil and petroleum products.

✓ Correct answer

C: Domestic firms' costs have increased.

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2022 Paper 1 Variant 2, question 27.

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