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Don't understand these questions about aggregate demand. Help would be appreciated. watch

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    Hello

    Recently started economics at A-level on Edexcel, and I'm struggling with some questions I've been assigned for homework. You can see them and the case study in the link provided. I am only doing questions 1 and 2.

    https://i.imgur.com/1jbVXOT.jpg

    Firstly, question 1 says to estimate the change in aggregate demand over the period 2010-13. Looking at the data, am I right in thinking that you would describe the changes in terms of GDP? As in by 2013, there's been a £65bn increase in GDP/AD; so in 2011, there's been a £26bn change; in 2012, a further £10bn; and so on until 2013. If my thinking is wrong could someone shed some light on how to do it properly?

    And then question 2, the worst as far as I'm concerned. I'm not sure what they mean by demand-side and supply-side here -- are they referring to Keynesian and Reagonomic policies, or quite literally to factors that affect demand and supply? I am not so clear on how the equilibrium level of national output & price is reached, let alone how demand/supply factors play into it, and how to link this to the data provided... It seems like it's asking for something that isn't mentioned in the case study.

    I'm not doing Q3 for now, so do not require help with that. But if someone could offer some guidance on questions 1 and 2, that'd be great.

    Thanks.
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    (Original post by damp rag)
    Hello

    Recently started economics at A-level on Edexcel, and I'm struggling with some questions I've been assigned for homework. You can see them and the case study in the link provided. I am only doing questions 1 and 2.

    https://i.imgur.com/1jbVXOT.jpg

    Firstly, question 1 says to estimate the change in aggregate demand over the period 2010-13. Looking at the data, am I right in thinking that you would describe the changes in terms of GDP? As in by 2013, there's been a £65bn increase in GDP/AD; so in 2011, there's been a £26bn change; in 2012, a further £10bn; and so on until 2013. If my thinking is wrong could someone shed some light on how to do it properly?

    And then question 2, the worst as far as I'm concerned. I'm not sure what they mean by demand-side and supply-side here -- are they referring to Keynesian and Reagonomic policies, or quite literally to factors that affect demand and supply? I am not so clear on how the equilibrium level of national output & price is reached, let alone how demand/supply factors play into it, and how to link this to the data provided... It seems like it's asking for something that isn't mentioned in the case study.

    I'm not doing Q3 for now, so do not require help with that. But if someone could offer some guidance on questions 1 and 2, that'd be great.

    Thanks.
    1) Yup, that's the right way to consider Figure 15.

    2) The relevant information is in the case study whilst Figure 15 can be used to help you in certain areas such as discussing AD. What it wants you to do here is apply your knowledge of, as you say, the factors that affect demand and supply. You don't need to specify the equilibrium levels, just what effects the events described would have on AD/SRAS.
 
 
 
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