Essay questions on aggregate demand
Evaluate the view that very high global oil prices will always harm a country's macroeconomy.
Evaluate the view that falling global oil prices will always benefit a country's macroeconomy.
Evaluate the impact of reflationary demand-side policies on an economy of your choice.
Data response questions on aggregate demand
Case study: The UK economy
With reference to Figure 1, explain the likely impact of higher real incomes on subjective happiness.
Case study: The Australian economy
With reference to the second paragraph of Extract A, analyse two factors that caused household consumption to increase in quarter 3, 2020.
Case study: East African* economies
With reference to Extract A, explain the term 'foreign direct investment'.
Case study: The Canadian economy
Define the term 'Consumption' (Extract A, line 9).
Case study: The economy of Argentina
Using the information in Extracts A and B, discuss policies that the Argentinian Government could use to increase consumption.
Short answer questions on aggregate demand
Draw a Keynesian AS/AD diagram to illustrate a negative output gap.
Draw a SRAS and AD diagram to show the effect of this increase in the price of coal on the price level and real output for Japan.
With reference to Kuwait, explain one likely impact of lower real incomes on subjective happiness.
Calculate the value of consumption for this economy in 2023. Show your workings.
Draw an AD and LRAS diagram to show the effect of this increase in the base rate of interest on consumption, the price level and real output.
Draw an AD and SRAS diagram to show the likely impact of this increase in consumer confidence in the eurozone.
Based on this information, calculate the marginal propensity to consume (MPC) in this economy. Show your workings.
With reference to the data, explain what is meant by the 'wealth effect'.
Ceteris paribus, calculate the value of aggregate demand for this economy in 2022. Show your workings.
With reference to Guinea, explain one likely impact of higher real incomes on subjective happiness.
Based on this information, calculate the marginal propensity to consume (MPC) in this economy. Show your workings.
Draw an AS and AD diagram to show the negative output gap.
Based on this information, draw an AD and LRAS diagram to show the likely impact of this fall in house prices on the price level and real output in the Philippines.
With reference to the table, explain what is meant by 'gross investment'.
Draw a LRAS and AD diagram to show the effect of this net migration on the price level and real output for New Zealand.
Draw a SRAS and AD diagram to show the effect of the decrease in the price of natural gas on the price level and real output for Japan.
Draw a LRAS and AD diagram to show the possible impact of this change in consumer confidence on the average price level and real output level in Australia.
Based on this information, calculate the marginal propensity to consume (MPC) in Malaysia. Show your workings.
Explain one likely economic effect of this investment tax relief.
Explain one possible impact of this change in house prices on the level of consumption.
Draw a diagram showing the change in AD for Saudi Arabia's economy following the increase in the price of oil. Show the effect on the price level and real output.
Ceteris paribus, calculate the aggregate demand for the USA in 2018.
Draw a LRAS and AD diagram to show the possible impact of this change in productivity on the average price level and real output level in Brazil.
Explain one possible effect of this increase in real incomes on subjective happiness.
Explain one possible impact of this increase in the availability of credit on the level of investment on the economy of Serbia.
Draw an AD and SRAS diagram to show the possible impact of the fall in oil prices on the price level and real output on the German economy.
Draw a LRAS and AD diagram to show the possible long-run impact of this significant increase in the base interest rate on AD, the price level and real output for Turkey.
Calculate the final increase in GDP resulting from this €18 billion investment. Show your workings.
Draw a SRAS and AD diagram to show the possible impact of this increase in consumption on the price level and real output.
Draw a short-run AS and AD diagram to show the effect of the increase in the price of oil on the price level and real output for France.
Ceteris paribus, calculate the final increase in the national income resulting from the LE11.9 billion investment.
Multiple choice questions
- AS Unit 2, January 2025, Q5
Which one of the following is most likely to have caused this increase in investment?
- AS Unit 2, October 2024, Q1
1 Which one of the following represents net investment?
- AS Unit 2, October 2024, Q6
With reference to the above table, which one of the following is most likely to result from this change in consumer confidence between April 2021 and April 2023? Price level Real output
- AS Unit 2, June 2024, Q1
Which one of the following is most likely to occur when an economy is in a recession?
- AS Unit 2, June 2024, Q6
Which one of the following can be deduced from the table?
- AS Unit 2, October 2023, Q2
Which one of the following is a free market supply-side policy?
- AS Unit 2, October 2023, Q3
Ceteris paribus, which one of the following would cause an increase in the value of a country's multiplier?
- AS Unit 2, June 2023, Q4
Which one of the following is the most likely impact of the change in average house prices on existing homeowners between January 2018 and December 2021?
- AS Unit 2, January 2023, Q1
Which one of the following is a likely cause of a decrease in the value of a country's multiplier?
- AS Unit 2, January 2022, Q3
3 Which one of the following is likely to cause a decrease in the value of a country's multiplier?
- AS Unit 2, October 2019, Q5
Which one of the following was the most likely cause of the change from AD to AD1?
- AS Unit 2, June 2019, Q1
1 In 2017 Turkey's deficit on the current account of the balance of payments increased to $4.2 billion. This increase in the deficit on the current account is most likely to have resulted from
