Economics (AS & A Level) · May / June 2023 · Paper 11 · Question 19
9708Aggregate Demand and Aggregate Supply analysis
The diagram shows the aggregate demand (AD) and aggregate supply (AS) for an economy. Which changes in subsidies and indirect taxes would have caused the change from AS1 to AS2?
- Ahigher subsidies and higher indirect taxes
- Bhigher subsidies and lower indirect taxes
- Clower subsidies and higher indirect taxes
- Dlower subsidies and lower indirect taxes
As printed in the paper
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Correct answer: C. lower subsidies and higher indirect taxes
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