A-LevelEconomicsThe macroeconomy9708/12 · May/June 2019 · Q201 Mark

How can a change in consumption that increases unemployment be illustrated on an aggregate demand and aggregate supply diagram?

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Aeffect on the aggregate demand curve: movement down the demand curve, effect on the aggregate supply curve: shift outwards

Beffect on the aggregate demand curve: movement up the demand curve, effect on the aggregate supply curve: shift inwards

Ceffect on the aggregate demand curve: shift inwards, effect on the aggregate supply curve: movement down the supply curve

Deffect on the aggregate demand curve: shift inwards, effect on the aggregate supply curve: movement up the supply curve

✓ Correct answer

C: effect on the aggregate demand curve: shift inwards, effect on the aggregate supply curve: movement down the supply curve

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2019 Paper 1 Variant 2, question 20.

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