Economics 9708 · AS & A Level · Economic growth

Economic growth — practice question

The diagram illustrates aggregate demand (AD) together with aggregate supply in the short run (SRAS) and the long run (LRAS). Which row is correct in explaining the cause of a shift in short-run aggregate supply from SRAS to SRAS1 and in long-run aggregate supply from LRAS to LRAS1?

  • Achange in AD from W to Y; increase in population
  • Bdecrease in raw material costs; improvements in the education of workers
  • Cdecrease in wage rates; decrease in immigration
  • Dincrease in availability of labour; increase in labour productivity

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