Which of the following economic changes is most likely to lead to an increase in Aggregate Demand (ADADAD) specifically through a rise in its investment (III) component?
An increase in corporate tax rates paired with a rise in spare capacity across the manufacturing sector.
A fall in real interest rates combined with an increase in business confidence ("animal spirits").
A depreciation of the domestic currency paired with a tightening of credit conditions by commercial banks.
An increase in the household savings ratio accompanied by a fall in equity prices.
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.