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2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

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Question 72

An economy experiences a period of surging global energy and raw material prices while simultaneously witnessing a significant increase in domestic consumer confidence and a reduction in the standard rate of income tax.

All other things being equal, which combination is most likely to result from these changes?

CombinationThe rate of inflationThe balance of trade deficit on current account
ADecreasesDecreases
BIncreasesDecreases
CDecreasesIncreases
DIncreasesIncreases
A

Combination A

B

Combination B

C

Combination C

D

Combination D

Markscheme

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts Questions

  1. A Level
  2. /Economics
  3. /2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

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.

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