A-LevelEconomicsThe macroeconomy9708/12 · May/June 2018 · Q191 Mark
The diagram shows short-run aggregate supply and demand in an economy, where the initial equilibrium is at S. [Figure showing multiple aggregate demand (AD1, AD2, AD3) and short-run aggregate supply (SRAS1, SRAS2, SRAS3) curves, with initial equilibrium S (AD1 and SRAS1) and new equilibrium T (AD2 and SRAS2).] What is most likely to cause a movement from S to T?
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.
Aan increase in consumer expenditure and an increase in productivity
Ban increase in consumer expenditure and a reduction in imports
Can increase in education and training and an increase in income tax
Dan increase in the exchange rate and a reduction in corporation tax
✓ Correct answer
B: an increase in consumer expenditure and a reduction in imports
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