Which row in the table, A, B, C or D, correctly distinguishes between a factor causing a movement along the aggregate demand (ADADAD) curve and a factor causing a shift of the AD AD\,AD curve?
| Movement along the AD AD\,AD curve | Shift of the AD AD\,AD curve | |
|---|---|---|
| A | A rise in the general price level reducing the purchasing power of household wealth | An increase in corporate tax rates that reduces expected post-tax investment yields |
| B | A depreciation of the domestic currency that increases the value of net exports | A general fall in the domestic price level increasing real money balances |
| C | A decrease in the rate of income tax that raises consumer disposable income | A rise in the general price level leading to higher domestic interest rates |
| D | A rise in business confidence regarding future consumer sales and profitability | A rise in the general price level making domestic exports less price-competitive |
Row A
Row B
Row C
Row D
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.