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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 93

Following a sudden collapse in domestic housing wealth, an economy experiences a major negative demand-side shock, causing real GDP to grow well below its trend rate. All other things being equal, which one of the following combinations is now most likely to occur in this economy?

A

Falling rate of unemployment, rising rate of inflation

B

Falling rate of unemployment, falling rate of inflation

C

Rising rate of unemployment, falling rate of inflation

D

Rising rate of unemployment, rising rate of inflation

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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