The economy of Country A is currently in a recession. The government increases its budget deficit whilst, at the same time, the exchange rate of its currency falls. These events are most likely to lead to a rise in
the foreign currency price of Country A's exports and a rise in inflation.
the rate of growth of real GDP and a fall in unemployment.
the domestic price of imported goods and a rise in unemployment.
labor productivity and the size of the economy's negative output gap.
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.