A-Level - Aggregate Demand & Aggregate Supply

Why does the aggregate demand curve slope down from left to right?

• A. A fall in the price level increases the purchasing power of spending.

• B. A fall in the price level increases the rate of interest.

• C. A rise in the price level encourages foreigners to buy more exports.

• D. A rise in the price level encourages firms to sell more goods and services.

The diagram shows a change in a country’s aggregate demand.

What would cause the shift of the AD curve from AD to AD1?

• A. a decrease in government spending

• B. a decrease in imports

• C. an increase in investment

• D. an increase in wages

What is likely to cause a shift of the AS curve to the left?

• A. a decrease in aggregate demand

• B. a decrease in the skills of workers

• C. an increase in investment

• D. an increase in the size of the labour force

The diagram shows that an economy is initially in equilibrium at point X.

There is then an increase in consumer expenditure and a rise in the price of raw materials.

What is the new equilibrium point?

• A

• B

• C

• D

What would cause a shift in an economy’s LRAS curve?

• A. a decrease in net exports

• B. an increase in consumer expenditure

• C. an increase in the price level

• D. advances in technology