2.3 Economic performance

EasyMediumHard
123456789101112131415161718192021222324252627282930313233
Question 15
Easy

The diagram below shows the economic cycle of an economy.

The economic cycle showing actual real GDP fluctuating around a trend rate of growth, with an arrow moving from peak X to trough Z.

All other things being equal, which of the following is the most likely consequence as the economy moves along the path from point X X\,X to point ZZZ?

A widening of the cyclical budget deficit due to the operation of automatic stabilizers.

A decrease in cyclical unemployment as firms utilize spare capacity.

An increase in planned business investment driven by the accelerator effect.

A rise in demand-pull inflation due to a growing positive output gap.

2.3 Economic performance Questions

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