Economics 9708 · AS & A Level · Aggregate demand and aggregate supply

Aggregate demand and aggregate supply — practice question

What is needed to stop the price level from rising as a result of an increase in aggregate demand?

  • AAdditional productive capacity must be created.
  • BGovernment investment must remain at a constant level to stabilise supply.
  • CGreater reliance must be placed on imported goods to overcome any domestic shortfalls.
  • DWage rates must change more frequently to maintain levels of employment and output.

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