A-LevelEconomicsThe macroeconomy9708/12 · May/June 2023 · Q191 Mark

Why might aggregate demand increase when a country's price level falls?

ADomestic interest rates will tend to fall.

BImports become more price competitive.

CReal incomes fall.

DThe purchasing power of savings falls.

✓ Correct answer

A: Domestic interest rates will tend to fall.

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2023 Paper 1 Variant 2, question 19.

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