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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 38

Which one of the following statements regarding the determinants of aggregate demand (ADADAD) is correct?

A

A rise in the general price level causes a rightward shift of the aggregate demand curve due to the wealth effect.

B

An increase in business confidence typically leads to a rise in planned capital investment, which shifts the aggregate demand curve to the right.

C

A decrease in the savings ratio, with constant disposable incomes, reduces short-run consumer expenditure and shifts the aggregate demand curve to the left.

D

An appreciation of the domestic currency increases the price competitiveness of exports, causing net exports to rise and shifting the aggregate demand curve 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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