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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 75

Assuming all other variables remain constant, which combination of macroeconomic changes is most likely to cause the largest increase in planned private sector capital investment, thereby shifting the aggregate demand (ADADAD) curve to the right?

A

An increase in real interest rates, a decrease in business confidence, and a decrease in corporation tax rates

B

A decrease in real interest rates, an increase in business confidence, and a decrease in corporation tax rates

C

A decrease in real interest rates, a decrease in business confidence, and an increase in corporation tax rates

D

An increase in real interest rates, an increase in business confidence, and an increase in corporation tax rates

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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