Economics (AS & A Level) · May / June 2026 · Paper 31 · Question 21

To increase the level of employment in the upturn of the trade cycle, a government pursues an expansionary economic policy. What explains the resulting overheating of the economy?

1. Athe emergence of supply bottlenecks
2. Bthe Laffer curve principle
3. Cthe operation of automatic stabilisers
4. Dthe underemployment of labour

As printed in the paper