An economy is currently operating at its full capacity level of output. Which of the following is most likely to cause an increase in real national output without generating demand-pull inflation?
An increase in consumer spending
An increase in business investment in automated machinery
A depreciation of the exchange rate
An increase in government spending on welfare benefits
222 exam-style questions on AQA A Level Economics 2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts, covering 2.2.1 The circular flow of income, 2.2.2 Aggregate demand and aggregate supply analysis, 2.2.3 The determinants of aggregate demand, 2.2.4 Aggregate demand and the level of economic activity, 2.2.5 Determinants of short-run aggregate supply, and 2.2.6 Determinants of long-run aggregate supply. Each one has a worked solution and a mark scheme showing where the marks go.