Economics 9708 · AS & A Level · Market failure

Market failure — practice question

Within the diagram, curve X1 represents the economy’s starting trade-off between inflation and unemployment. What might lead the curve to move to X2?

  • Aa decrease in the money supply
  • Ba decrease in the natural rate of unemployment
  • Can increase in the rate of interest
  • Dthe expectation of an increase in the inflation rate

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI