In Country Z, the long-run underlying trend rate of economic growth is estimated to be 2.2%. The table below shows the actual annual growth rate of real GDP over four consecutive years:
| Year | Actual annual growth in real GDP |
|---|---|
| 1 | 3.1% |
| 2 | 4.5% |
| 3 | 3.8% |
| 4 | 2.9% |
Between Year 1 and Year 4, it is most likely that:
the volume of spare capacity in the economy increased.
the economy's negative output gap widened.
the level of cyclical unemployment rose.
demand-pull inflationary pressures intensified.
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.