A-LevelEconomicsThe MacroeconomyFeb/Mar 2020Paper 1 Q231 Mark
A central bank forecasts a rise in raw material costs. The government plans to increase spending on health and education. The initial equilibrium point is shown by X on the aggregate demand, AD, and aggregate supply, AS, diagram. What would be the new equilibrium point in the short run if the forecasts prove to be accurate and the government plans are implemented? [Figure 23.1]
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The correct answer is C. This question tests the candidate's understanding of the macroeconomy within the Economicssyllabus. The examiner's mark scheme requires...
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