A-LevelEconomicsThe macroeconomy9708/12 · Feb/Mar 2020 · Q271 Mark
In a closed economy a rise in aggregate demand is needed to increase output in the country. What is necessary to achieve this increase in output in the economy?
Aenough capacity to produce the extra goods and services demanded
Bfree trade to allow imports to make up any shortages in supply
Cgovernment spending to be less than tax revenue
Dreduced credit to lower inflation
✓ Correct answer
A: enough capacity to produce the extra goods and services demanded
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