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Economics (AS & A Level) · May / June 2026 · Paper 32 · Question 24

9708Links between macroeconomic problems and their interrelatedness

In the diagram, the curve X1 shows an economy's initial trade-off between inflation and unemployment. What does the shift of the curve from X1 to X2 show?

  1. Aan increase in the natural rate of unemployment
  2. Ba decrease in the money supply
  3. Cthe expectation of a decrease in the inflation rate
  4. Dan increase in the rate of interest

As printed in the paper

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Correct answer: A. an increase in the natural rate of unemployment

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