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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 14

All other things being equal, if an open economy simultaneously experiences a severe economic recession among its primary trading partners and a widespread domestic adoption of automation technology that significantly reduces unit labour costs, this is most likely to cause

A

its aggregate demand (ADADAD) curve to shift to the right and its short-run aggregate supply (SRASSRASSRAS) curve to shift to the left.

B

its aggregate demand (ADADAD) curve to shift to the left and its short-run aggregate supply (SRASSRASSRAS) curve to shift to the right.

C

both its aggregate demand (ADADAD) curve and its short-run aggregate supply (SRASSRASSRAS) curve to shift to the left.

D

both its aggregate demand (ADADAD) curve and its short-run aggregate supply (SRASSRASSRAS) curve to shift to the right.

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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