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2.3 Economic performance

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Question 48

The table below shows selected macroeconomic indicators for an economy over a three-year period.

Macroeconomic IndicatorYear 1Year 2Year 3Real GDP Growth Rate (%)+1.2−0.8−2.1Unemployment Rate (%)6.27.58.9Inflation Rate (CPI, %)1.50.80.2Business Investment Growth Rate (%)+1.0−4.5−8.0 \begin{array}{|l|c|c|c|} \hline \textbf{Macroeconomic Indicator} & \textbf{Year 1} & \textbf{Year 2} & \textbf{Year 3} \\ \hline \text{Real GDP Growth Rate (\%)} & +1.2 & -0.8 & -2.1 \\ \text{Unemployment Rate (\%)} & 6.2 & 7.5 & 8.9 \\ \text{Inflation Rate (CPI, \%)} & 1.5 & 0.8 & 0.2 \\ \text{Business Investment Growth Rate (\%)} & +1.0 & -4.5 & -8.0 \\ \hline \end{array} Macroeconomic IndicatorReal GDP Growth Rate (%)Unemployment Rate (%)Inflation Rate (CPI, %)Business Investment Growth Rate (%)​Year 1+1.26.21.5+1.0​Year 2−0.87.50.8−4.5​Year 3−2.18.90.2−8.0​​

Based on these data, during Year 3 the economy is most likely to experience

A

a narrowing of the negative output gap.

B

an increase in spare capacity.

C

an increase in capacity utilisation.

D

a demand-pull inflationary spiral.

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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