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2.3 Economic performance

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Question 40

Inflationary pressures are normally high when an economy has a positive output gap. The most likely explanation for this is that

A

there is substantial spare capacity and high cyclical unemployment.

B

labor shortages lead to rising wage demands and firms face capacity constraints.

C

the government is likely to cut spending on public services to increase demand.

D

export volumes are falling due to low economic growth abroad.

Markscheme

2.3 Economic performance Questions

  1. A Level
  2. /Economics
  3. /2.3 Economic performance

327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.

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