A-LevelEconomicsGovernment macroeconomic intervention9708/12 · May/June 2025 · Q251 Mark
The diagram shows aggregate demand (AD) and aggregate supply (AS) curves. The initial equilibrium is at X. A government decides to invest in an increase in infrastructure. What will be the short-term effect of this policy on the equilibrium? [Figure 25.1]
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AA
BB
CC
DD
✓ Correct answer
B: B
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