A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Feb/Mar 2017 · Q301 Mark
The diagram shows four possible aggregate supply curves and an equilibrium point X. A government employs deflationary fiscal policy in order to reduce the rate of inflation in its economy. This shifts aggregate demand to AD2. With which AS curve would this policy be least effective? [Diagram]
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AA
BB
CC
DD
✓ Correct answer
D: D
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