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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 19

An economy experiences a slowdown in its rate of growth of national income, although real GDP continues to rise. The accelerator theory predicts that

the level of planned investment will fall.

an increase in investment will restore the previous high rate of economic growth.

interest rates will increase, causing investment to fall.

a decrease in the level of investment will lead to a contraction in real GDP.

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