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

Aggregate demand and aggregate supply — practice question

(a)[8]

Using an aggregate demand and aggregate supply (AD/AS) diagram, explain why two parts of AD might rise and assess the extent to which a rise in AD will always cause inflation.

(b)[12]

Assess the view that a high rate of inflation is always more harmful for consumers than for firms.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Correctly labelled AD/AS diagram with price level and GDP on the axes, showing AD increasing and the price level increasing.” …

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