Economics (AS & A Level) · May / June 2022 · Paper 13 · Question 29

The diagram shows the AD / AS curves for an economy. Which government action is most likely to cause the equilibrium position to move from X to Y?

1. Aan increase in the exchange rate that makes locally produced goods less price-competitive, both at home and abroad
2. Ban increase in government spending on infrastructure that increases the production potential of the economy
3. Can increase in interest rates that increases the cost of borrowing
4. Dan increase in real wages of labour

As printed in the paper