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AS level Economics section b

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    • Thread Starter

    Hi guys,

    I am struggling to understand how to answer section b, where one is required to draw a graph on a specified problem given.

    Kindly reply to me if you know how to,
    (Paper 2 Economics AS level 9708/21)

    If you're talking about 3A, then I think I know what you have to do. Real output is output adjusted for inflation. Demand pull inflation occurs when there is an increase in the demand of an economy, which means there is a shift to the right of the aggregate demand curve. This may happen if one or more of the components that make up the AD (AD= Government expenditure+capital investment+consumer expenditure+ net exports [X-M]) rises. With a shift in the aggregate demand comes an increase in price and an increase in output (or real GDP). With cost-push inflation, however, the aggregate supply curve shifts to the left as cost-push inflation occurs for instance when costs of production, such as wages or raw materials, increase (this may also happen due to imported inflation when there's a depreciation of the currency so imports become more expensive). With increased costs of production, an economy will essentially produce less and thus the prices rises.Name:  Screen Shot 2016-05-05 at 2.55.27 AM.png
Views: 41
Size:  18.6 KBThis is what I got for ya. P2 and Q2 represent the changes when there's cost push inflation, and P1 and Q1 represent the changes when there's demand pull inflation.
    • Thread Starter

    thank you so much. that helped a lot!

    Hi! I moved this into the Economics forum for you - other students might find this helpful

    Tips to score in paper 1:
    1. Complete past year papers at least back to 5 years from now. Repeated questions are highly possible.
    2. Understand the way examiner sets questions. Questions that are being set are highly similar. They will change the question but they still want to test on the same concepts.
    3. For Micro, students are required to fully understand PPC, scarcity, how demand and supply curve shift, PED, YED, XED, consumer and producer surplus, function of money.
    4. For Macro, students are required to fully understand inflation, unemployment, BOP, max and min price, social benefits and social costs, how fixed and floating exchange rate work, AD and AS.
    I hope these tips can help you. All the best to all the students.I am selling A-level mark scheme EXPLANATION, which is much better than the mark scheme provided online. Do whatapps/sms me at 0149110523 to get a copy.
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