AS ECONOMICS Paper 2 The National Economy in a Global Context. PREDICTOR QUESTIONS

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An economy experiences a positive supply-side shock. Other things remaining equal, the impact on the economy is most likely to be A higher inflation and faster economic growth. B higher output and ... lower inflation. C lower employment and slower economic growth. D lower unemployment and a larger budget deficit. [1 mark] 0 2 The quantity of food imported by an economy increases by 12% in one year. The most likely cause is a fall in A domestic farm prices. B income tax. C the exchange rate. D welfare benefits. [1 mark]3 *03* Turn over ► IB/M/Jun20/7135/2 Do not write outside the 0 3 Figure 1 shows aggregate demand (AD) curves for an economy. box Figure 1 Which one of the following is most likely to cause the aggregate demand curve to shift from AD1 to AD2? A A fall in imports B A fall in the price level C A reduction in the budget deficit D A rise in the exchange rate [1 mark] 0 4 Which one of the following statements about the consumer price index (CPI) is correct? A A fall in the CPI means that the real value of money is falling B An increase in the CPI means that the rate of inflation is rising C The CPI measures changes in the prices of goods and services bought by households D The weights used in the CPI reflect changes in the quality of goods and services [1 mark [Show More]

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