A-LevelEconomicsGovernment Macroeconomic InterventionFeb/Mar 2025Paper 1 Q181 Mark
The diagram shows aggregate demand (AD) and long-run aggregate supply (LRAS) with X as the initial equilibrium. [Figure showing LRAS, LRAS1, AD, AD1, AD2 curves, with points F, G, X, H, J, and labels for price level and real GDP] Which combination of policy and new final equilibrium point is correct? policy new final equilibrium point
Aincreased direct taxation F
Bincreased government spending on infrastructure G
Cappreciation of the exchange rates H
Ddecreased interest rates J
✓ Correct Answer
The correct answer is B: increased government spending on infrastructure G
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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