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Aggregate supply

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Question 3

According to the neo-classical model of aggregate supply, what is the long-run effect of a contractionary demand-side policy on real GDP and the price level?

A

Real GDP will fall, and the price level will remain constant.

B

Real GDP will remain unchanged, and the price level will decrease.

C

Real GDP will increase, and the price level will decrease.

D

Real GDP will fall, and the price level will decrease.

Markscheme

Aggregate supply Questions

  1. A Level
  2. /Economics
  3. /Aggregate supply

7 exam-style questions on OCR A Level Economics Aggregate supply. Each one has a worked solution and a mark scheme showing where the marks go.

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