Extract C The government of Veridia has launched a major infrastructure modernization program, injecting substantial capital into the domestic construction and technology sectors to boost connectivity. However, at the same time, Veridia's manufacturing sector, which is highly integrated into global supply chains, is facing severe bottlenecks and escalating costs for imported semi-conductors and components.
With reference to Extract C, draw an AD/AS diagram to illustrate the likely impact of Veridia's infrastructure modernization program and the simultaneous imported component cost increases on the economic price level and real national output.
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.