A-LevelEconomicsThe macroeconomy9708/12 · Oct/Nov 2017 · Q191 Mark
In its recent budget a government reduced total expenditure while increasing the amount spent on training to increase the productivity of the workforce. The initial equilibrium point is shown by X on the aggregate demand (AD) and aggregate supply (AS) diagram. [Figure showing aggregate supply curves AS3, AS1, AS2 and aggregate demand curves AD3, AD1, AD2, with points X, B, C, D, A] What would be the equilibrium point after these changes?
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.
AA
BB
CC
DD
✓ Correct answer
A: A
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