Which one of the following combinations of unexpected macroeconomic changes is most likely to move an economy from a negative output gap to a positive output gap?
An unexpected increase in
the household savings ratio combined with a rise in central bank interest rates.
the exchange rate of the domestic currency combined with a larger-than-expected government budget surplus.
household wealth from rising asset prices combined with a rapid expansion in foreign demand for exports.
the rate of corporation tax combined with a decline in general business confidence.
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.